The Delhi Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that refund claims of Special Additional Duty (SAD) of Customs cannot be rejected merely on the ground of limitation.
The bench of Dr. Rachna Gupta (Judicial Member), set aside the lower authority’s order that had denied a refund of Rs. 1.91 lakh claimed under Notification No. 102/2007-Cus., dated September 14, 2007, citing that it was filed beyond the one-year time limit.
The Appellant/assessee, Arjun Enterprises had imported goods under Bill of Entry and paid Special Additional Duty. The company subsequently filed a refund claim, which the adjudicating authority rejected as time-barred under the amended notification prescribing a one-year limitation. This rejection was later upheld by the Commissioner (Appeals).
The appellant contended that the refund period should begin from the date of sale of the imported goods, not the date of duty payment, relying on precedents like Dow Chemical International Pvt. Ltd. vs. Commissioner of Customs, Kandla.
Dr. Gupta referred extensively to past judgments and clarified that the Delhi High Court’s landmark ruling in Sony India Pvt. Ltd. vs. Commissioner of Customs, New Delhi (2014 (304) ELT 660) governs this issue. The High Court had held that the right to claim refund of SAD arises only after the importer sells the goods and pays sales tax/VAT. Imposing a limitation period from the date of duty payment, even before the right to claim arises, is legally untenable. Section 27 of the Customs Act, 1962—which sets limitations for duty refunds—does not apply to SAD refunds under Notification No. 102/2007-Cus.
The Tribunal noted that while there had been conflicting views in earlier decisions, a Larger Bench in Ambey Sales vs. Commissioner of Customs, GRFL, Ludhiana (2024 (6) TMI 257 – CESTAT Chandigarh-LB) conclusively settled the issue, holding that the one-year limitation does not apply to SAD refunds.
CESTAT observed, “the time limit imposed upon an importer for filing a refund claim of additional duty of customs in terms of the notification dated 01.08.2008 would not be applicable in view of the judgment of the Delhi High Court in Sony India Pvt. Ltd..”
Relying on the judicial consistency established by the Delhi High Court and the Larger Bench decision, the Tribunal ruled that the rejection of Arjun Enterprises’ refund claim on limitation grounds was unsustainable in law. The order was accordingly set aside, and the appeal was allowed.
Case Details
Case Title: M/s Arjun Enterprises Pvt. Ltd. vs. Commissioner of Customs (Appeals), New Delhi.
Case No.: Customs Appeal No. 50095 of 2025
Date: 09/10/2025
Counsel For Petitioner: Jitin Singhal, Advocate
Counsel For Respondent: AR Rohit Issar
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