Case Law Details
CC, Hyderabad- Customs Vs Surya Telecom Pvt Ltd (CESTAT Hyderabad)
As a creation of law, the Tribunal cannot go beyond the law itself. The validity of the Act, Rules, Regulations and Notifications cannot be questioned or modified by the Tribunal. Only the High Courts and Supreme Court which examine the constitutionality of the laws can do so. Unless the notification is amended or modified by a judicial pronouncement of the High Court having jurisdiction over this Bench or of the Supreme Court, the Tribunal is bound to follow the notification as it stands.
In this case not only is there no judgment of the jurisdictional High Court but there are two conflicting judgments of two different High Courts. Under these circumstances, the proper course of action for me is to follow the notification as it stands as was done by my brother in the Final Order No.30705/2017 in the case of Sree Krishna Enterprises on the same issue.
In conclusion, I find that the Learned Commissioner (Appeals) has erred in holding that period of limitation under Notification No.102/2007-CUS does not apply to SAD refunds, as the refund claims were filed subsequent to the amendment to this Notification vide 93/2008-CUS as opposed to the case of Sony India which was decided by the Hon’ble High Court of Delhi examining the retrospective applicability of the amending notification.
FULL TEXT OF THE CESTAT JUDGMENT
1. These two appeals by the department pertain to the same respondent on the same issue and hence are being disposed of together.
2. Heard both sides and perused the records.
3. The issue in brief after filtering out unnecessary details in this case is that the respondent herein had imported lithium ion battery pack on which they paid applicable customs duties including the special Additional Duty (SAD) @ 4% Ad valorem as applicable. In terms of Notification No.102/2007-CUS dated 14.09.2007 as amended by Notification 93/2008-CUS dated 01.08.2008, importers who sell the goods after paying appropriate VAT are eligible to claim refund of this SAD paid at the time of import subject to the conditions mentioned in the notification. One of the conditions in the notification is that refund claim must be filed within one year of payment of duty. In this case, the appellant filed the refund claims after the period of one year and hence their claims were rejected vide Orders-in-Original No. 117 & 118/2016-ACC(R) dated 12.08.2016 by the Assistant Commissioner of Customs, Air Cargo Complex, Hyderabad.
4. Aggrieved, the appellant filed an appeal before the Commissioner (Appeals), Hyderabad who, vide impugned Order-in-Appeal, has allowed the appeal setting aside the limitation of time indicated by the original authority. He further directed that the original authority should consider the claims on merits expeditiously and grant refund if eligible, otherwise, and that their request for interest may also be decided and granted, if eligible. The ground on which the Commissioner (Appeals) has sanctioned and allowed the appeal is that the Hon’ble High Court of Delhi in the case of Sony India Pvt Ltd [2014 (304) ELT (660) –DL] had held that the limitation of time should not apply in the case of SAD refund. He further observed that the Hon’ble Supreme Court vide its order reported in 2016 (337) ELT A.102 (SC) had dismissed the department’s appeal against this judgment of the Hon’ble High Court of Delhi. The Learned Commissioner (Appeals) therefore, observed that since the law has been settled, the original authority should have followed the same in view of the judicial discipline and should have sanctioned the refund without considering the limitation of time. The present appeal is by the Revenue against this Order of Commissioner (Appeals).
5. The Learned Departmental Representative argued that the judgment of Hon’ble High Court of Delhi was passed in a particular context. It is his submission that in that particular case, the Hon’ble High Court was seized of a case where the limitation of one year introduced in the Notification No. 102/2007-CUS through subsequent Notification No. 93/2008-CUS was sought to be applied retrospectively. The specific question of law formulated by the Hon’ble Delhi High Court as recorded in the aforesaid judgment was as follows:
“Can period of limitation for preferring refund claims specified in the amending Notification No. 93/2008-CUS be made applicable with retrospective effect, in absence of a limitation period in the original Notification No. 102/2007-CUS in respect of the goods imported prior to the issue of the amending notification?”
6. After examining this issue the Hon’ble High Court has answered the question in favour of the assessee and against the Revenue and allowed the It is his contention that since the present case involves import after the amending notification was issued and the ratio of the Sony India Pvt Ltd case does not apply. Therefore, the Learned Commissioner (Appeals) has erred in wrongly applying the ratio and holding that limitation of one year does not apply. It is his further submission that the Hon’ble Apex Court has not dismissed the department’s appeal against the judgment of the Hon’ble High Court of Delhi on merits but had dismissed it only on the question of delay in filing the appeal, leaving the question of law open. Therefore, it is wrong to say that the Hon’ble Apex Court has upheld the Order of the Hon’ble High Court of Delhi. The question of law is still open.
7. It is his further contention that the Hon’ble High Court of Bombay in the case of CMS Info Systems Ltd [2017 (349) ELT 236 (Bombay)] examined the same Notification No. 102/2007-CUS as amended by the Notification No. 93/2008-CUS and held that prescribing one year period for filing claim in the notification cannot be declared ultra vires because the assessee desires to brush it aside. It is further held that if this exemption notification had not been issued at all in exercise of the statutory powers no exemption could have been claimed by the assessee. Merely because a condition is imposed, to file refund claim is in nature of time bar or limitation, that cannot be held to be honoured excessive and therefore, ultra vires of Article 14 of the Constitution. While passing this Order, the Hon’ble High Court of Bombay had reckoned the judgment of the Hon’ble High Court of Delhi and had observed as follows:
“Once the statutory scheme is understood in the proper perspective and as a whole, then, merely because the view taken by the Delhi High Court has not been interfered by the Hon’ble Supreme Court will not enable us to follow it. There, the discussion, with great respect, is short of all the above provisions.”
8. Thus saying, the Hon’ble High Court of Bombay differed from the judgment of the Hon’ble High Court of Delhi.
9. At this stage, Learned Counsel for respondent submits that although the question formulated by the Hon’ble High Court of Delhi in Sony India Pvt Ltd case was only with respect to the retrospective application of the notification, yet in para 17 and 18 of the judgment, they observed as follows:
“17. Plainly, therefore Section 27 was understood as not applying to SAD cases, even though it was in the statute book for many years. Yet, with the introduction of the circular and then the notification (No. 93), the Customs authorities started insisting that such limitation period which was prescribed with effect from 1-8-2008 (by notification) became applicable. There is a body of law that essential legislative policy aspects (period of limitation being one such aspect) cannot be formulated or prescribed by subordinate legislation. Khemka and Co. (Agencies) Private Ltd. v. State of Maharashtra, (1975) 35 STC 571 and other decisions are authority on the question that in matters which deal with substantive rights, such as imposition of penalties and other provisions that adversely affect statutory rights, the parent enactment must clearly impose such obligations; subordinate legislation or rules cannot prevail or be made, in such cases. The imposition of a period of limitation for the first time, without statutory amendment, through a notification, therefore could not prevail.
18. For these reasons, this Court holds that the amending notification must be read down to the extent that it imposes a limitation period. The question of law framed is therefore, answered in favour of the assessee and against the Revenue. The appeal accordingly succeeds and is allowed without any order as to costs.”
10. Thus the Hon’ble High Court of Delhi had run down the amending notification to the extent it imposed a period of limitation for filing a refund claim.
11. On a specific query from the Bench, both Learned Departmental Representative and the Learned Counsel for the Respondent had said that there was no judgment on this issue from the jurisdictional High Court of Telangana & Andhra Pradesh, on this matter.
12. The Learned Departmental Representative sought to rely on the following case laws to buttress his case.
(1) MS Metals Vs Commissioner of Customs (Preventive), Patna [2017 (345) ELT 113 (Tri-Kolkata)]
(2) Commissioner of Customs Vs DSM Sinochem Pharmaceuticals Pvt Ltd. [2018 (359) ELT 509 (Bom.)]
(3) Alcoa India Pvt Ltd Vs Commissioner of Customs, Kolkata [2018 (359) ELT 244 (Tri-Kolkata)]
(4) CMS Info Systems Ltd Vs Union of India [2017 (349) ELT 236 (Bom.)]
(5) Final Order No.30705/2017 of this Bench in the case of Commissioner of Customs, Hyderabad Vs Sree Krishna Enterprises.
13. He strongly argued that the Order of the Learned Commissioner (Appeals) need to be set aside and the Order-in-Original must be upheld.
14. The Learned Counsel for the Respondent agreed that there is no dispute on the facts of the case. He relied upon the following case laws:
(1) Vainik Spining Mills Ltd. Vs Commissioner of Customs, Amritsar [2017 (6) TMI 33- CESTAT CHANDIGARH]
(2) Vivilon Textiles Industries Ltd Vs Commissioner of C. Ex., Raigad [2017 (49) STR 149 (Tri-Mumbai)]
(3) Santa Lal Gupta Vs Modern Co-operative Group Housing Society Ltd. [2010 (262) ELT 6 (SC)]
15. He argued that although there is a difference of opinion between the Hon’ble High Court of Delhi and Hon’ble High Court of Mumbai on the question of constitutional validity of limitation of time for seeking refund of SAD, many Courts and Benches of CESTAT have followed the judgment of the Hon’ble High Court of Delhi in the case of Sony India Pvt Ltd and this case may also be decided accordingly.
16. I have considered the arguments on both sides and perused the There is no dispute on the facts of the case that the refund claim was filed after one year from the date of payment of duty and as such was not eligible to be sanctioned in terms of Notification No. 102/2007 as applicable during the relevant period. The Learned Commissioner (Appeals) had relied on the judgment of the Hon’ble High Court of Delhi in the case of Sony India Pvt Ltd, wrongly holding that this judgment reached finality as the Hon’ble Apex Court has dismissed the appeal of the Revenue thereon. In fact the Hon’ble Apex Court had clearly dismissed the petition on the grounds of time bar, leaving the question of law open. More pertinently, the Hon’ble High Court of Delhi had delivered the judgment in a particular factual matrix and the question which they sought to answer is whether the limitation of time introduced by Notification No. 93/2008 amending the Notification No.102/2007 will have retrospective effect and they answered in negative. It is also true that in the same Order, the Hon’ble High Court of Delhi had also mentioned that the notification needs to be run down to the extent that imposes limitation of time to file the refund claim.
17. On the other hand, the Hon’ble High Court of Mumbai had taken a different view in the case of CMS Info Systems Ltd (supra) and it held very clearly that exemption Notification No.102/2007 is the only notification which entitles the importer to refund of SAD. But for the notification the importer is not entitled to refund of SAD. This notification is issued subject to many conditions including the condition that the refund application must be filed within one year from the date of payment of duty. The Hon’ble High Court held that unless all the conditions of the notification are fulfilled, SAD refund cannot be sanctioned and the condition imposing the time limit cannot be held to be unreasonable or ultra vires of the constitution. There is no order or judgment of the High Court of Telangana & Andhra Pradesh or of the Apex Court. Thus it cannot be said that the period of limitation prescribed in the Notification No.102/2007 is invalid.
18. As a creation of law, the Tribunal cannot go beyond the law itself. The validity of the Act, Rules, Regulations and Notifications cannot be questioned or modified by the Tribunal. Only the High Courts and Supreme Court which examine the constitutionality of the laws can do so. Unless the notification is amended or modified by a judicial pronouncement of the High Court having jurisdiction over this Bench or of the Supreme Court, the Tribunal is bound to follow the notification as it stands. In this case not only is there no judgment of the jurisdictional High Court but there are two conflicting judgments of two different High Courts. Under these circumstances, the proper course of action for me is to follow the notification as it stands as was done by my brother in the Final Order No.30705/2017 in the case of Sree Krishna Enterprises on the same issue. In conclusion, I find that the Learned Commissioner (Appeals) has erred in holding that period of limitation under Notification No.102/2007-CUS does not apply to SAD refunds, as the refund claims were filed subsequent to the amendment to this Notification vide 93/2008-CUS as opposed to the case of Sony India which was decided by the Hon’ble High Court of Delhi examining the retrospective applicability of the amending notification.
19. The appeals filed by the Revenue are allowed and the Orders-in-Appeal are set aside.
(Pronounced in the open Court on 02.07.2018)
