Commissioner of Customs Vs Suzuki Motorcycle India Pvt Ltd. (Delhi High Court)
Conclusion: Refund of Special Additional Duty (SAD) was allowable despite the claims being filed beyond the one-year limitation period prescribed under the amended notification as procedural delay could not nullify a legitimate claim when the substantive conditions for a refund, like payment of VAT/sales tax on resale, had been fulfilled.
Held: Assessee respondent had imported motorcycles and parts over various periods and paid SAD under Section 3(5) of the Customs Tariff Act, 1975. It subsequently filed refund claims under Notification No. 102/2007-Cus., which allowed SAD refunds when the imported goods were sold in India and VAT or sales tax was paid. Adjudicating authority and Commissioner (Appeals) rejected refund claims because the claims were filed beyond the one-year deadline introduced by Notification No. 93/2008-Customs, and some original supporting documents had not been furnished. On appeal, CESTAT allowed the refunds, relying on the Delhi High Court’s earlier ruling in Sony India Pvt. Ltd. v. Commissioner of Customs [2014 (304) ELT 660 (Del)], which allowed SAD refunds even when filed after the stipulated time. Revenue argued that the refund claims were time-barred and that Section 27 of the Customs Act should apply strictly. They further submitted that the Supreme Court had not conclusively resolved the divergence between the Delhi and Bombay High Court positions. On appeal. It was observed that several coordinate benches of the Delhi High Court had upheld SAD refunds in similar factual contexts, even post the one-year limitation amendment. The court ruled that the consistent jurisprudence of the Delhi High Court could not be overturned merely due to the Bombay High Court’s differing view in CMS Info Systems Ltd., especially when the objective of Notification No. 102/2007-Cus. was to prevent double taxation. The court held that procedural delay could not nullify a legitimate claim when the substantive conditions for a refund, like payment of VAT/sales tax on resale, had been fulfilled. The court dismissed the department’s appeals, upheld the refund orders passed by the CESTAT.
