In a major relief for importers, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, has ruled that the one-year limitation period prescribed for filing refund claims of Special Additional Duty (SAD) under Notification No. 102/2007-Cus dated September 14, 2007, will not apply.
The bench of Dr. Rachna Gupta (Judicial Member), set aside the orders of both the adjudicating authority and the Commissioner (Appeals), New Delhi, which had earlier denied the refund of Rs. 1,91,363. The refund had been claimed for SAD paid on imported goods under a bill of entry dated July 2, 2016.
The appellant/assessee had paid the SAD on July 11, 2016, and filed a refund claim on July 26, 2018. Customs authorities rejected the claim citing the one-year limitation period under the said notification, which was upheld by the Commissioner (Appeals). The appellant challenged the rejection, arguing that the limitation period should begin from the date of sale of the goods, not the date of duty payment.
The CESTAT observed that the Delhi High Court in Sony India Pvt. Ltd. v. Commissioner of Customs, New Delhi [2014 (304) ELT 660 (Del.)] had categorically held that the limitation period of one year cannot be imposed for refund claims under Notification No. 102/2007-Cus. The High Court clarified that the right to claim a refund arises only after the sale of goods, as the importer must first produce documents evidencing payment of VAT or sales tax.
Quoting the Sony India judgment, the Tribunal reiterated that the limitation period cannot start before the right to refund accrues. It further noted that Section 27 of the Customs Act, 1962, which deals with refund claims, does not apply to refunds of SAD since the duty’s purpose is to counterbalance VAT/sales tax on subsequent sale.
Case Details
Case Title: M/s Arjun Enterprises Pvt. Ltd. Versus Commissioner of Customs
Case No.: Customs Appeal No. 50095 of 2025
Date: 09/10/2025
Counsel For Appellant: Jitin Singhal, Advocate
Counsel For Respondent: Rohit Issar, Authorized Representative
Read More: Madras High Court Bans Animal Sacrifice at Thiruparankundram Hill
