By TIOL News Service

NEW DELHI, APR 21, 2014: THE issue involved in this appeal is for the refund claims filed under Notification No 102/2007 Cus,whether limitation of one year from the date of importation of the goods is applicable for the imports made prior to the insertion of condition of limitation vide Notification No 93/2008 Cus .

The Notification in its original form did not have any condition of limitation. For filing refund claims, the goods should be sold on payment of VAT and in all cases, the importer may not be able to sell his goods within one year from the date of import. But, for some strange reason, the limitation clause has been inserted by amending the Notification No 102/2007 Cus vide Notification No 93/2008.

The appellant imported some items in between 1.12.2007 and 5.12.2007 under 9 Bills of Entry, paid the applicable customs duties by demand drafts dated. 4.12.2007 and 6.12.2007 and received stamped TR-6 challans on 14.12.2007, 18.12.2007 and 19.12.2007. Notification 93/2008-Cus dated 1.08.2008 was then issued amending Notification no. 102/2007 to prescribe a time period of 1 year from date of payment for the filing of refund claims by an importer under the Notification. On 11.12.2008, the appellant filed a refund claim amounting to Rs. 66,67,480/- before the Assistant Commissioner of Customs for the refund of SAD on the imports in December 2007 under the Notification no. 102/2007. After hearing the appellant, the respondent passed an order dated 12.10.2009 allowing the claim of Rs. 33,49,015/-, on the ground that the refund in respect of 4 Bills of Entry had been filed beyond the period of 1 year stipulated in the amending notification. The rejection was upheld by the Commissioner (Appeals) as well as by the CESTAT. The appellant are before the High Court against the said rejection.

After hearing both sides, the High Court held:

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 01.08.2008 (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.

The High Court held that the amending notification must be read down to the extent that it imposes a limitation period.

(See 2014-TIOL-532-HC-DEL-CUS)