HC rejects revenue’s attempt to invoke period of limitation and allows refund of SAD with Interest

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M/s Dish TV India Limited had imported Set Top boxes (STB) from its foreign supplier and claimed exemption from SAD in terms of Notification No. 102/2007-Customs. However, the refund claim was rejected by Adjudicating Authority. The assessee appealed before the CESTAT, which allowed its claim. In these circumstances, when the assessee sought refund in light of CESTAT order, it also sought interest on the principal amount to the extent of delay of almost 7 years.

Further the assessee relied on HC’s ruling in Principal Commissioner of Customs vs. RISO India Pvt. Ltd. [TS-561-HC2015(DEL)-CUST] in this regard wherein it was concluded that the period of limitation prescribed in the Notification could not be made applicable in cases where SAD was levied. Assessee referred to the ruling in Micromax Informatics Limited vs. Union of India [TS-31-HC-2018(DEL)- CUST] where the Court declared that Para 4.3 of Circular No. 6/2008-Customs, could not be given effect to. In that Circular, the CBEC had clarified that there was no specific provision for payment of interest in Notification No. 102/2007-Customs under which the importer was granted refund of SAD.

HC held that the reasoning given in Micromax Informatics Ltd as well as in RISO India Pvt. Ltd. squarely applied to the case. The period of limitation sought to be imposed upon refunds claimed and a restriction on claim of interest, especially brought in by way of CBEC clarification, could not override the law. Further HC allowed the writ petition and directed processing of amount claimed towards interest for the concerned period, i.e. three months from the date of refund claimed till actual date of payment of such refund.

Citation: TS-400-HC-2018(DEL)-CUST