By TIOL News Service

MUMBAI, DEC 21, 2012: NOTFN. 102/2007-Cus dated 14th September, 2007 grants exemption from the additional duty of customs leviable thereon under sub-section (5) of section 3 of the said Customs Tariff Act by way of the "refund" procedure.

The exemption contained in this notification is/was being given effect by the jurisdictional Customs officer by way of sanctioning the refund on satisfying himself that the conditions referred to in paragraph 2 of the notification are fulfilled.

The conditions mentioned therein were as under -

"(a) the importer of the said goods shall pay all duties, including the said additional duty of customs leviable thereon, as applicable, at the time of importation of the goods;

(b) the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible;

(c) 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 ;

(d) the importer shall pay on sale of the said goods, appropriate sales tax or value added tax, as the case may be;

(e) the importer shall, inter alia, provide copies of the following documents alongwith the refund claim:

(i) document evidencing payment of the said additional duty;

(ii) invoices of sale of the imported goods in respect of which refund of the said additional duty is claimed;

(iii) documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods."

It will be interesting to note that there was no time limit prescribed within which the refund should be claimed by the importer.

So, the Board did the unthinkable. It issued a Circular 6/2008 dated 28.04.2008 and informed one and all the following -

"4. Time - Limit:

4.1. In the Notification No.102/2007-Customs dated 14.9.2007, no specific time limit has been prescribed for filing a refund application. Under the circumstances, a doubt has been expressed that whether the normal time-limit of six months prescribed in section 27 of the Customs Act, would apply. In the absence of specific provision of section 27 being made applicable in the said notification, the time limit prescribed in this section would not be automatically applicable to refunds under the notification. Further, it was also represented that the goods imported may have to be despatched for sale to different parts of the country and that the importer may find it difficult to dispose of the imported goods and complete the requisite documentation within the normal period of six months. Taking into account various factors, it has been decided to permit importers to file claims under the above exemption upto a period of one year from the date of payment of duty. Necessary change in the notification is being made so as to incorporate a specific provision prescribing maximum time limit of one year from the date of payment of duty, within which the refund could be filed by any person."

Strange it is to issue a Circular and say that the time limit is one year for claiming the refund and fiction it is to announce that ‘necessary change in the notification is being made... ". Please also see DDT 854.

It took the Board three more months to issue the notification to incorporate the above - as if there were no imports and no refund claims filed under this notification in the intervening period.

Be that as it may, by an amending notification 93/2008-Cus dated 01.08.2008, in paragraph 2, for sub-paragraph (c), the following was substituted -

"(c) 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 payment of the said additional duty of customs;".

But naturally, such belated measures can have their repercussions as happened in the instant case.

A refund claim filed by the appellant was dismissed by the lower authorities on the ground that the same is filed beyond the prescribed period of one year from the date of payment of duty. It was held by the lower authorities that as the duty was paid on 28.11.2007 and refund claim was filed on 1.12.2008 i.e. after one year from the date of payment of duty, the same is time barred in view of the Board Circular No. 6/2008 dated 28.4.2008.

The appellant is before the CESTAT.

The Bench held -

"4. …, I find that at the time of payment of duty, Notification No. 102/2007 dated 14.9.2007 was in force and in the said notification, for filing the refund claim no time limit was prescribed. The time limit, for filing the refund claim was prescribed by Notification No. 93/2008 dated 1.8.2008 and the said notification has not been implemented retrospectively. Therefore, the Notification No. 93/2008 is not applicable in the case of refund claim filed against the duty paid prior to 1.8.2008. Hence, the rejection of the refund claim on the ground of time bar is not sustainable at all. Accordingly, the impugned order is set aside and the appeal is allowed with consequential relief."

(See 2012-TIOL-1903-CESTAT-MUM)