Order date – 23 March 2023

Parties – Commissioner of Customs (Import) Vs M/s Siya Paper Mart Pvt. Ltd.

Facts –

• The Respondent, M/s Siya Paper Mart Pvt. Ltd., imported goods into India, and paid basic and additional custom duty are also charged with Special Additional duty of Customs levied under Section 3(5) of the Customs Tariff Act, 1975.
• 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. This benefit of this notification is subject to a limitation in paragraph 2(c) as ‘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 Respondent filed a claim for refund of Rs. 2,10,632/- of which the Assistant Commissioner rejected refund of Rs. 1,53,507/- because the claims were filed beyond one year from the date of payment of duty and hence were time-barred as per condition 2 (c) of the notification. Further the respondent in the second appeal filed a claim for refund of Rs. 22,631/- which the Assistant Commissioner again rejected on the same ground as above.
• 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 it was held that the notification must be read down insofar as it places the restriction of one year for filing the refund claim.
• Aggrieved, this appeal is filed by Revenue. 

Issue –

• Whether the refund claims of SAD that has been rightly rejected by the Assistant Commissioner being time-barred as per condition 2 (c) of the notification?

Order –

• The Tribunal relied on the judgement of the Hon’ble Supreme Court in the case of Union of India vs. Kamlakshi Finance Corporation Ltd. which mentioned that the principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.
• Further the court mentions that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assessee-public without any benefit to the Revenue.
• The Court dismissed both the appeals filed by the Revenue and uphold the impugned orders.