The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed refund of additional customs duty and noted that Customs Notification on Special Additional Duty (SAD) refund must be read down when it places restriction of one year for filing refund claim.
The appellant in the matter is M/s Siya Paper Mart Pvt Ltd.
Revenue filed the appeals on the same issue in respect of the same respondent and hence they are being disposed of together. Goods which are imported into India are chargeable to basic customs duty, additional duty of customs and also Special Additional duty of Customs 1 levied under Section 3(5) of the Customs Tariff Act, 1975 on some goods.
SAD is levied @ 4% ad valorem in order to provide a level playing field to domestic industry because goods manufactured in India have to pay Value Added Tax (VAT) but imported goods do not have to pay it because sale in the course of international trade is not exigible to VAT by the State Governments.
Notification No. 102/2007-Cus dated 14.9.2007 has been issued to provide for refund of the SAD if the importer sells the imported goods and pays the VAT on them. The benefit of this notification is available subject to some conditions including condition in paragraph 2(c) of the notification that „the importer shall file a claim for refund of the said additional duty of customs paid on the imported goods with the jurisdictional customs officer before the expiry of one year from the date of the payment of the said additional duty of customs’.
The Commissioner (Appeals), by the impugned orders, allowed appeals of the respondent relying on the judgment of the jurisdictional Delhi High Court in M/s. Sony India Pvt. Ltd. vs Commissioner of Customs, New Delhi, in which the it was held that the notification must be read down insofar as it places the restriction of one year for filing the refund claim.
The Tribunal of PV Subba Rao, Technical Member and Binu Tamta, Judicial Member observed that “We are surprised as to how the Committee of two Commissioners has not only concluded that the Commissioner (Appeals) does not have to follow judicial discipline but have gone further to say that the Commissioner (Appeals) has erred in following the binding precedent of the jurisdictional High Court.”
Dismissing the appeals the Bench further noted that “The submissions of Revenue in this appeal that the Commissioner (Appeals) should have not followed the binding ruling of the jurisdictional High Court can only result in considerable harassment to the assessee-public through needless litigation without any benefit to the Revenue.”
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