Reference to Larger Bench of Tribunal on refund claim of SAD if goods were not sold within one year

Ambey Sales Vs Commissioner of Customs, Ludhiana (CESTAT Chandigarh)

Conclusion: Whether the time limit prescribed for filing refund claim of SAD paid by the importer is one year in terms of Notification No. 93/2008(Cus) dated 01.08.2008 which has been issued in terms of section 25(1) of the Customs Act, 1962 without selling the imported goods by the importer within one year of payment of SAD shall be applicable or not needs to be referred to the Larger Bench of Tribunal.

Held:  Assessee was engaged in the business of importing and selling plastic materials such as PVC resins during 2015-16 and paid the SAD in terms of section 3 (5) of Customs Act, 1962. They filed refund claim under Notification No.102/2007-Cus dated 14.9.2007 of SAD. The said refund claims were rejected being time barred in terms of Notification No. 93/2008(Cus) dated 01.08.2008. Against the said order, assessee was in appeal. The sole issue involved in this case was whether Notification No.102/2007-Cus dated 14.9.2007 as amended by Notification No. 93/2008(Cus) dated 01.08.2008, the time limit prescribed for filing refund claim is one year from the date of payment of SAD or not. It was held that in case, the imported goods could not be sold by the importer within one year of the payment of SAD on payment of VAT/service tax, the importer was deprived to claim of the refund of SAD. The cause of action to claim refund of SAD did not arise as per Notification No.102/2007-Cus dated 14.9.2007 and Notification No. 93/2008(Cus) dated 01.08.2008 If the SAD and VAT/Sales tax paid on the imported goods, it would amount to double taxation on the said imported goods as condition 2(c) of the said notification bars the importer to file refund after clearance of goods after one year of the SAD. Once the intent of the Legislature is to refund the SAD on payment of VAT/Sales-Tax, the condition 2(c) of the Notification is against the intent of the Legislature. As it is not the intent of legislature to tax double on the imported goods, the importer shall not compete Indian market. For example, if importer imported goods in March, 2020, after lockdown due to the Pandemic Covid 19 in all over country, second wave of Pandemic and various parts of India is under locked down, if the importer failed to sell the imported goods, the importer shall be put on another burden of SAD which is otherwise entitled of refund on payment of VAT/Sales tax. Further, unless and until the goods are sold on payment of VAT/Sales tax, cause of action for refund of SAD does not arise, the said issue has not been addressed by the Division of this Tribunal in the case of Aggarwal Trading Company, the same has been addressed by the Single Member Bench of this Tribunal on various occasions. In that circumstance, as there are contrary views of this Tribunal, then it would be in the interest of justice, the matter needs to be referred to the Larger Bench of this Tribunal.

FULL TEXT OF THE CESTAT CHANDIGARH ORDER

The appellant has filed this appeal against the impugned order wherein the refund claim filed by the appellant of special additional duty under Notification No.102/2007-Cus dated 14.9.2007 as amended has rejected by the Commissioner (Appeals) as time barred.

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