The Hyderabad bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) in Surya Telecom Pvt Ltd v. CC, Hyderabad, held that the Tribunal is bound to follow the notifications issued by the Government until it is modified by the Government or the Superior Courts.
In the instant case, the respondent-assessee imported lithium-ion battery pack on which they paid applicable customs duties including the special Additional Duty (SAD) @ 4% Ad valorem as applicable. As per Notification No.102/2007-CUS dated 14.09.2007 as amended by Notification No.93/2008-CUS dated 01.08.2008, importers who sell the goods after paying appropriate VAT are eligible to claim the refund of this SAD paid at the time of import subject to the conditions mentioned in the notification. This is subject to a condition that the refund claim must be filed within one year of payment of duty. The assessee, however, filed refund application after one year.
On appeal, the first appellate authority held that 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. This was on the basis of the judgment of the Delhi High Court in Sony India Pvt Ltd.
The Tribunal noticed that the Supreme Court had clearly dismissed the Special Leave Petition on the grounds of time bar, leaving the question of law open. It was also noted that the Delhi High Court had also mentioned that the notification needs to be run down to the extent that imposes the limitation of time to file the refund claim.
“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,” the bench said.
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