One-year limitation period in Notification 93/2008-Cus cannot restrict refund claims for Special Additional Duty.

The respondent-assessee imported goods and paid Special Additional Duty (SAD) under Section 3(5) of the Customs Tariff Act, 1975.

Under Notification No. 102/2007-Cus, importers are entitled to a refund of SAD upon the subsequent sale of goods and payment of appropriate VAT/Sales Tax.

However, the Revenue rejected the refund claims, asserting they were filed beyond the one-year limitation period from the date of duty payment, as prescribed by the amending Notification No. 93/2008-Cus.

The Adjudicating Authority and Commissioner (Appeals) upheld this rejection.

On appeal, the CESTAT Ahmedabad reversed the decision, allowing the assessee’s claims.

The Revenue subsequently appealed to the High Court of Gujarat.

1. Whether the CESTAT was justified in holding that the one-year limitation period for filing SAD refund claims, as prescribed by Notification No. 93/2008-Cus, is legally unsustainable.

2. Whether the limitation period prescribed for customs duty under Section 27 of the Customs Act, 1962, applies to refunds of Special Additional Duty (SAD).

Section 27 of the Customs Act, 1962, regarding the one-year limitation for refund of duty.

Section 3(5) and 3(8) of the Customs Tariff Act, 1975, and Notifications No. 102/2007-Cus and No. 93/2008-Cus.

Precedent set in Sony India Pvt. Ltd. v. Commissioner of Customs and Pioneer India Electronics Pvt. Ltd. v. Union of India, which established that SAD paid at the time of importation is not covered by the restrictive time limits of Section 27.

Principle that subordinate legislation (notifications) cannot amend or override substantive statutory rights by imposing a limitation period where the parent act does not provide for one.

The Court reasoned that Section 27 of the Customs Act provides a mechanism for refunding "duty," but this specific mechanism and its one-year limitation from the date of payment do not apply to SAD because the right to a SAD refund only crystallizes upon a subsequent sale, not at the time of import.

The court observed that Notification No. 93/2008-Cus attempted to introduce a one-year time limit from the date of payment for SAD refunds, which amounts to a "legislative policy" decision dealing with substantive rights.

Relying on the Delhi High Court's view, the Court held that such an imposition via notification, without a corresponding statutory amendment to the Act itself, is impermissible in law.

The court distinguished contrary views and followed the Larger Bench decision in Ambey Sales, concluding that the clock for limitation cannot feasibly start before the event (the sale) entitling the refund occurs.

The High Court dismissed the Revenue's appeals, holding that no substantial question of law arose.

The CESTAT's decision was upheld, confirming that the respondent-assessee’s refund claims were valid regardless of the one-year lapse from the date of initial payment.