Gujarat High Court
The Commisioner vs M/S Shirdi Steel Traders on 30 August, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/TAXAP/837/2024 ORDER DATED: 30/08/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 837 of 2024
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THE COMMISIONER
Versus
M/S SHIRDI STEEL TRADERS
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Appearance:
MR UTKARSH R SHARMA(6157) for the Appellant(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 30/08/2024
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr.Utkarsh R. Sharma for the appellant.
2. By this Appeal under Section 130 of the Customs Act, 1962 (for short 'the Act') the appellant-revenue has proposed the following substantial questions of law arising out of the impugned order passed by the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad (CESTAT) vide order Page 1 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined dated 23rd June, 2023 passed in Customs Appeal No.10506 of 2014:
"(i) Whether the time limit of one year from the date of payment of duty prescribed under Notification No. 102/2007-Custom dated 14.09.2007 read with Noti. No. 93/2008-Customs dated 01.08.2008 for the refund claim filed in terms of the said notification, can be considered from the date of finalisation of provisional assessment (in cases where the assessment is provisional) or otherwise?
(ii) Whether in the facts and circumstances of the case, the Ld. Tribunal was correct in the eyes of Law and on facts by holding that "the refund filed in the instant case is well within the time as prescribed under Notification No. 102/2007-Cus and refund is not time-barred."
3.1. The respondent filed an application Page 2 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined before the Assistant Commissioner, Customs Division, Bhavnagar for refund of an amount of Rs.2,46,902/- under Notification No.102/2007- Customs dated 14.09.2007 towards Special Additional Customs Duty (SAD) paid in respect of Bill of Entry No.SBY/89/2012-13 dated 21.06.2012.
3.2. The Assistant Commissioner, Customs Division, Bhavnagar vide Order-in-Original dated 11th September, 2013 rejected the refund claim holding that the refund claim is time barred since it has not been filed within one year from the date of payment of duty.
3.3. Feeling aggrieved, the respondent filed an appeal before Commissioner (Appeals), Customs, Jamnagar who by Order-in-Appeal dated 26.12.2013 upheld the Order-in-Original Page 3 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined rejecting the refund claim of the respondent.
3.4. Therefore, the respondent filed appeal before the CESTAT challenging both, the Order-
in-Original and order-in-Appeal. The CESTAT by impugned order dated 23rd June, 2023 allowed the appeal filed by the respondent by observing as under :
"4. Considered, this Court finds that the Board Circular as well as the Delhi High Court decision as reported in Pioneer India Electronics Pvt Ltd Vs. Union of India-2014 (301) ELT 59 (Delhi High Court) was duly considered by the Division Bench of Delhi this Tribunal in SUZUKI MOTORCYCLE INDIA P. LTD VS C.C. (IMPORT & GENERAL), NEW DELHI, cited Supra and it was decided in that matter in the similar circumstances, that refund cannot be rejected as time barred and Bench allowed the appeal by remanding the same to adjudicating Page 4 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined authority for deciding refund claim if otherwise admissible. This Court is inclined to follow the same decision and particularly emphasizes, there is no ambiguity as such in the notification as the statutory provision as that contained in Section 27(1B)(C) is very clear as to what is the date of payment to be reckoned when provisional assessment has been resorted to. The relevant notification has no clause providing otherwise, therefore, the same needs to be interpreted harmoniously with the statutory provision and it appears that the Board Circular was correctly ignored in the decision of SUZUKI MOTORCYCLE INDIA P. LTD, under the similar circumstances."
4.1. Learned advocate Mr.Utkarsh Sharma appearing for the appellant submitted that the Tribunal has committed an error by not applying the Notification No.102/2007 read with Notification No.93/2008 which provides Page 5 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined for one year time period for filing the refund application for SAD paid on the imported goods with the jurisdictional Customs Officer within one year from the date of payment of such duty. It was submitted that the Tribunal ought to have applied the conditions prescribed in the Notification No.93/2008 by which the Notification No.102/2007 was amended and the applicability of Explanation II appended to Section 27 of the Act cannot be said to be ignored as the time period is specifically mentioned in the impugned notification.
4.2. It was submitted that there is no specific provision under Section 27 of the Act which can be made applicable in the said Notification and therefore, the time limit would start from the date of payment of provisional duty paid by the respondent and Page 6 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined considering the same, the application of refund is admittedly beyond the period of one year as observed by the Appellate Authority in the Appellate Order.
4.3. It was further submitted that the Circular No.23/2010-Customs dated 29.07.2010 wherein clarification/instruction on the issue of relevant date for refund in terms of Notification No.102/2007 in case of similar facts where the assessment is provisional has been issued. Reliance was placed on the relevant paragraph No.3 of the said Circular to submit that the time limit prescribed for the purpose of 4% CVD refund claim is one year from the date of payment of duty as per the said Notification and hence, in the cases where assessment is provisional, for the purpose of sanction of refund of 4% CVD, the Page 7 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined date of payment of duty would be the date of payment of CVD at the time of import of goods and not the date of finalisation of the provisional assessment. It was therefore submitted that the same analogy would apply so far as the refund claim of SAD is concerned under the Notification No.93/2008 read with Notification No.102/2007.
4.4. Learned advocate Mr.Utkarsh Sharma in support of his submissions referred to and relied upon the decision of the Hon'ble Apex Court in case of Commissioner Versus Dilipkumar and Company reported in 2018 (361) E.L.T 577 (S.C.) wherein it is held that any exemption notification must be strictly interpreted and any benefit of doubt must go in favour of the Revenue and against the assessee. It was therefore submitted that when Page 8 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined the Notification No.93/2008 provides for the time limit of one year from the date of payment of duty, it would be immaterial whether such duty is provisional duty or final duty and the refund claim is required to be filed within the prescribed period of one year and admittedly, in the facts of the case, the said limit is crossed by the respondent in filing the refund claim.
4.5. It was therefore submitted that the order of the Tribunal requires interference and the Appeal may be entertained on the substantial questions of law proposed by the Revenue.
5. Having heard the learned advocate Mr.Utkarsh Sharma for the appellant-Revenue and considering the submissions made, it is Page 9 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined not in dispute that the respondent-assessee has made the payment of duty and therefore the limitation could not have been started from the date of such payment of duty as per the provision of Section 27(1B)(c) of the Act which provides as to how the period of one year would start for the purpose of making the refund claim. Section 27(1B)(c) of the Act reads as under :
"Section 27(1B)(c):where any duty is paid provisionally under section 18, the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof or in case of re-assessment, from the date of such re-assessment."
6. The CESTAT by considering the above provisions of Section 27(1B)(c) of the Act has rightly come to the conclusion that what is Page 10 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined the date of payment to be taken when the provisional assessment has been resorted to as prescribed in the aforesaid provisions and relevant Notification has no clause providing otherwise and the CESTAT has therefore rightly interpreted the same as harmoniously with the statutory provisions and came to the conclusion that the Board Circular has ignored this fact.
7. The Tribunal has also relied upon the decision of the Delhi High Court in case of Pioneer India Electronics Pvt Ltd Vs. Union of India reported in 2014 (301) ELT 59 which was followed by the Tribunal in case of SUZUKI MOTORCYCLE INDIA P. LTD VS C.C., NEW DELHI (IMPORT & GENERAL) reported in 2019 (369) E.L.T. 1196 (Delhi Tribunal). The Delhi High Court in case of Pioneer India (Supra) Page 11 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined has held as under :
"36. The problem in the present case has arisen largely due to failure of the respondents to pass final adjudication orders which were belatedly made. Bills of exchange between the period 20th December, 2008 to 6th March, 2009; bills of exchange between 27th March, 2009 to 12th August, 2009; and bills of exchange between 8th September, 2009 to 9th October, 2009 were finally adjudicated on 9th July, 2010. There is no explanation for this delay and the cause thereof.
37. Circular No. 23 of 2010/custom issued on 7th September, 2010 stipulates that the date of payment of provisional duty and not the date of final adjudication is determinative for computing the limitation period of refund under notification No. 93 of 2008 issued on 1st August, 2008, can be Page 12 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined faulted for many reasons. These are as under:
i. As per Section 25(1), Central Government is empowered to issue a notification granting exemption i.e. grant exemption generally or absolutely or subject to conditions from whole or any part of custom duty leviable on goods. A notification cannot restrict the benefit or impose more rigorous or severe terms than the one prescribed under the Act. Notification can liberalise and grant exemption. Indulgence and benevolence can be an objective of a notification and restricted or shorter period of refund is not postulated. Notification cannot impose more deleterious terms and reduce the period of limitation for refund of claim. (Sub - section 2A to Section 25 is not applicable) ii. Section 27 of the Act prescribes Page 13 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined period of limitation. The period of limitation under the said Section cannot be curtailed by way of a notification but a notification can extend and increase the period of limitation. Similarly, a circular cannot reduce the period of limitation for seeking refund stipulated in Section 27 of the Act.
iii. Section 27 applies to all refunds whether due and payable pursuant to appellate orders or court orders or otherwise in terms of exemption notification under Section 25(1) or special orders under Section 25(2) of the Act.
iv. The expression date of payment used in notification No. 93 of 2008 dated 1st August, 2008 can mean the date of final assessment. The said interpretation would be in accordance and as per explanation II to Section 27. Similar expression has been used in Section 27(1).
Page 14 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined Circular issued on 29th July, 2010 accepts that in some cases refunds under the notification dated 1st August, 2008 had been issued on a claim being made within one year from date of final assessment and beyond one year from the date of provisional assessment. The circular however, stipulates that the claim for refund would be entertained under the notification dated 1 st August, 2008, if it is made within one year from payment of duty and not final assessment. This, may result in reducing the period. Assuming that the issue of date of payment was debatable, the Board did not deem it appropriate to fix a period or time limit during which claims of refund should be entertained in cases where the Assessee bonafidely believed and were acting on the presumption that period of one year was to be computed from the date of final assessment. The said belief was not Page 15 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined ill founded but based on sound logic and reasoning. The Board while issuing the circular would have been fair and just and fixed a time limit during which past claim of refund could be entertained with a reference to the date of final assessment.
38. In view of the above discussion, we feel that it will be proper to harmoniously construe and interpret notification dated 1 August, 2008 and Section 27 read with Circular dated 29th July, 2010 by holding that an Assessee can make a claim for refund under notification No.93 of 2008 dated 1st August, 2008 either by filing an application for refund within the limitation period specified under Section 27 of the Customs Act, 1962 or within the extended limitation period of one year from the actual date of payment even, if the said payment made was pursuant to provisional assessment. The longer of the two periods i.e. the Page 16 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined period specified under Section 27 or the notification dated 1st August, 2008 read with Circular No. 23/2010-Custom dated 29th July, 2010 would be applicable.
39. To sum up:
a. where the imported goods are released on payment of CVD on regular assessment, the application seeking refund can be made within one year of the payment of the CVD in terms of the notification dated 1 st August, 2008 read with Circular No. 23/2010-Custom dated 29th July, 2010.
b. where the goods are released on provisional assessment followed by the final assessment, the application seeking refund can be made within the period of one year or six months, as the case may be, of the final assessment as stipulated by Explanation II to Page 17 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined section 27 of the Act or within the enlarged period of one year from the date of provisional release as stipulated by the notification dated 1 st August, 2008 read with Circular No. 23/2010-Custom dated 29th July, 2010.
40. The Circular No. 23/2010-Custom in so far as it stipulates that the provisions of section 27 of the Act do not apply to the Notification cannot be sustained to the extent indicated above.
41. In view of the construction given by us to the circular hereinabove, the Judgment relied upon by the counsel for the Petitioner of the High Court of Madras in the case of KSJ Metal Impex Private v. Under Secretary, Customs and Others in Writ Petition No. 959/2013 decided on 21.01.2013 need not be referred to. Even otherwise the said judgement is not applicable in the facts of the present case as the same Page 18 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined was dealing with the issue of interest on delayed refunds.
42. Since the petitioner has filed the claims within the period stipulated by section 27 of the Act, in view of the construction given by us, the same could not have been rejected on the ground of limitation."
8. We are in complete agreement with the aforesaid observations of the Delhi High Court which is followed by the Tribunal to the effect that the date of making the refund application would be required to be considered from the date of final assessment and not from the date of payment of provisional duty as per the provisions of Section 27(1B)(c) of the Act and the reliance placed by the Revenue on the interpretations of the impugned Notification No.93/2008 cannot be applied contrary to the Page 19 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024 NEUTRAL CITATION C/TAXAP/837/2024 ORDER DATED: 30/08/2024 undefined statutory provisions.
9. In view of the foregoing reasons, we are of the opinion that no questions of law, much less any substantial question of law arises from the impugned order of the Tribunal and the Appeal therefore, being devoid of any merit is accordingly dismissed.
(BHARGAV D. KARIA, J) (NIRAL R. MEHTA,J) PALAK Page 20 of 20 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 13 2024 Downloaded on : Fri Sep 13 21:52:12 IST 2024