SAD Refund application cannot be rejected as time barred if original refund application filed within time, though before wrong Authority

Singh International and Polyglass Acrylic Mfg Co. Pvt. Ltd. (the Appellants) filed refund claims of Special Additional Duty of Customs (SAD) paid under Section 3(5) of the Customs Tariff Act, 1975 at ICD, Dadri within a period of one year from the date of payment of SAD under Notification No. 102/ 2007-Customs dated September 14, 2007 (Notification No. 102).

However, the goods were imported at CFS, Mulund and SAD was paid there. But since, a bunch of claims was given to the consultant of the Appellants, both for Dadri and Mulund, by mistakes, their consultant filed the claims in question at Dadri. By the time the refund claims were forwarded by Customs Authorities at Dadri to the Authorities at Mulund, a period of over one year had lapsed from the time of payment of duty to the time of receipt of refund claims at CFS, Mulund.

Accordingly, the aforesaid refund claims were rejected on the ground of being time barred. Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Mumbai and relying upon the decision of the Hon’ble High Court of Gujarat in the case of Commissioner of Central Excise Vs. AIA Engineering Ltd. [Tax Appeal No. 2266 of 2009, decided on September 22, 2010] (AIA case) contended that since the original application for refund was filed within time, though before wrong authority, it cannot be said that the said application was barred by limitation.

On the other hand, the Revenue contended that benefit under Notification No. 102 shall be given effect only if the importer files a claim for refund of SAD with the jurisdictional Customs Officer.

The Hon’ble CESTAT, Mumbai also relied upon the AIA case and held that even though Notification No. 102 requires refund claim to be filed with the jurisdictional Customs Authorities, but when the original application for refund was filed within time, though before wrong authority, it cannot be said that the said application was barred by limitation.

Accordingly, the Hon’ble Tribunal decided the matter in favour of the Appellant.