Whether period of limitation of one year for filing SAD refund would be from date of finalization of assessment or from the date of payment of duty?

PJ/Case Laws/2012-13/1552

Case:- M/s Singla Trading Co. Vs Commissioner of Customs, New Delhi

Citation:- 2013-TIOL-522-CESTAT-DEL

Brief Facts:- The facts of this case is that refund of SAD paid by the appellant at the time of import of the goods. The said refund claim stands rejected on the ground on limitation by observing that the period of one year as provided in the Notification No.93/08 prescribes the limitation of one year for filing of the SAD refund claim. On the other hand, appellant's contention is that their assessment was provisional and the date of finalization of assessment was taken as the relevant date for computing the period of limitation of one year. The refund claim was filed within a period of one year from the date of finalization of the assessment.

Appellant’s contention:- Ld. Advocate appearing for the appellant submits that earlier they had filed the SAD refund with a period of one year from the date of payment of duty which were returned to them by observing that the same cannot be processed as the bill of entry in question is provisionally assessed. They were directed to file the refund claim subsequently after the finalization of bill of entry. However, he fairly agrees that such filling of refund claim was in respect of other bills of entries and not the bills of entry involved in the present appeal. His contention is that in as much as some earlier refund claims were returned to them on the above ground, the present one was filed after the final assessment of bill of entry.

Reasoning of judgment:- The Tribunal heard both the parties and considered that there is no disputes on the facts. The refund claims are admittedly not filed within the period of one year as prescribed in Notification No.93/08 and the same admittedly stands filed within a period of one year from the date of final assessment of bills of entry. Tribunal has seen a letter of Supdt. (Refund), ICD, Tkd, New Delhi, addressed to the appellant mentioning that the refund claim cannot be processed as the bills of entry in question is provisionally assessed and in the absence of other original documents, request was made to the appellant to submit a copy of the final assessment of bills of entry.

Tribunal also finds that in these circumstances if the appellant has followed the directions of the Supdt. and have filed the subsequent refund claim only after the finalization of assessment, he cannot be blamed that. At this juncture, Tribunal also takes of the Board's Circular No.23/01-Cus, dtd.29.07.10 observing as under:-

"2. References have been received by the Board pointing out that divergent practices are being followed as regards sanction of 4% CVD refund claims in the cases where assessments are provisional. It has been reported that in some Custom Houses, date of payment of duty is being considered as date for determining the prescribed period of one year in terms of the Notification No.93/2008-Cus, dtd. 01.08.08 whereas in other Customs Houses, the relevant date is the date of finalization of provisional assessment and accordingly the importers in those Customs Houses are filing refund claim within one year of finalization of assessment. It was requested that a suitable clarification be issued by the Board in order to ensure uniformity in procedure.

3. The matter has been examined in the Board. As per the Board Circular No.6/2008-Cus, dtd. 28.04.08, the limitation of time under Section 27 of the Customs Act, 1962 is not applicable in cases relating refund claims of 4 CVD. The refund of 4% CVD is admissible in terms of Notification No.102/2007-Cus dtd. 14.09.07 read with Notification No.93/2008-Cus, dtd. 01.08.08 issued under Section 25(1) of the Customs Act, 1962 subject to fulfillment of certain conditions as envisaged in the said notification. 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. Hence, in cases where the assessment is provisional for the purpose of sanction of refund of 4% CVD, the 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 finalization of provisional assessment. The importer therefore, would be eligible to get the refund, if the claim is filed within on year of the date of actual payment of 4% CVD, i.e., the date of payment of duty at the time of clearance of imported goods."

The Tribunal finds that as is seen from above, the Revenue itself was taking a view that wherever the assessments are provisional, refund claims have to be filed within a period of one year of the finalization of the same. It is only with the Board's Circular that the issue was settled by observing that in as much as the refund is not under Section 27 of the Customs Act, 1962, the fact of finalization of bill of entry assessment cannot be taken as the relevant date. However, prior to the said Circular, it can be safely concluded that the Revenue itself was under the impression that the refund being in terms of Section 27, period of limitation would start running from the date of finalisation. As such without going into the validity and correctness of the Circular issued by the Board, i.e., without deciding the legal issue as to whether it is provision of Section 27 which will apply of not, Tribunal hold that in the peculiar facts and circumstances of the present case, refund claim cannot be rejected on the point of time bar. Accordingly, the Tribunal set aside the impugned order remand the matter to the adjudicating authority for processing the refund claim after verification of the documents etc. Appeal is allowed in above terms.

Decision:- Appeal is allowed

Comment:- The analogy drawn from this case is that as per clarification issued by the Board, except refund claims under section 27 of the Customs Act, 1962, the period of limitation one year would start from the date of payment of duty and not from date of finalization of provisional assessment. But in the facts of the present case, it was observed that the assessee had acted according to the instructions and guidelines of the departmental officers and the departmental officers themselves believed that the limitation starts from the date of finalisation of assessment and so the appeal was accordingly allowed.

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PJ/Case Laws/2012-13/1552

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