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2020 DIGILAW 412 (GUJ)

Variety Lumbers Pvt. Ltd. v. Union of India

2020-03-05

GITA GOPI, SONIA GOKANI

body2020
ORDER : SONIA GOKANI, J. 1. This petition is directed against the order-in-original dated 31.10.2019 passed by the Office of the Commissioner of Customs, Kandla, respondent No.3, whereby the refund claim of the petitioner of Rs.1,51,90,212/- ( Rupees one crore fifty one lacs ninety thousand two hundred and twelve only) pertaining to 38 Nos. of Bills of Entry came to be rejected under section 27 of the Customs Act, 1962 (hereinafter referred to as “the Act”) read with Notification No.102/2007-Cus. Dated 14.09.2007. 2. The petitioner is a company incorporated under the Companies Act, 1956 and is engaged in the business of import of Timber and is also running a Saw Mill. The petitioner had filed a refund claim of Rs.1,55,56,142/- before the respondent No.3 herein on the ground that it has paid 4% Special Additional Duties (SAD) at the time of importation of timber, which is exempted in view of the Notification No.102/2007-Cus. dated 14.09.2007. The said notification relates to goods falling under the Customs Tariff Act (hereinafter referred to as “the CTA”) and provides that goods imported into the country for subsequent sales are exempt from the payment of SAD levied under section 3(5) of the CTA on the conditions mentioned therein, including the condition that the importer shall pay on sale of the said goods, proper sales tax or VAT, as the case may be and produce documents evidencing such payment on sale of such imported goods. 3. It is the say of the petitioner that in several instances, the timber imported in log forms are very long and therefore, they are cut into pieces for the ease of handling and transportation. After cutting it, the timber is sold to other dealers on payment of VAT, as may be leviable under the Gujarat Value Added Tax Act, 2003. After making such payment of VAT on sale, the petitioner applied for refund of SAD under the Notification dated 14.09.2007. However, the respondent No.3 rejected the refund claim of the petitioner on the ground that the claim was filed beyond the period of one year from the date of payment of additional customs duty. Being aggrieved by the same, the petitioner has preferred the captioned petition. 4. However, the respondent No.3 rejected the refund claim of the petitioner on the ground that the claim was filed beyond the period of one year from the date of payment of additional customs duty. Being aggrieved by the same, the petitioner has preferred the captioned petition. 4. In the instant case, it appears that a show-cause notice was issued to the petitioner for denial of the refund claim on the premise that the identity of the goods had been changed on account of slicing of the timber into pieces. 4.1 The challenge made by the petitioner to the said show cause notice before the Commissioner of Customs (Appeals) was unsuccessful. 4.2 Being aggrieved by the order passed by the Commissioner of Customs (Appeals), the petitioner preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). Vide order dated 24.09.2019, the CESTAT allowed the appeal and directed the Department to allow the refund claim of the petitioner. 4.3 The respondents challenged the order passed by the CESTAT before this court by filing appeals being Tax Appeal No.86 of 2011 and allied matters. This court rejected the group of tax appeals vide judgment and order dated 07.07.2011. 4.4 Against the said order passed by this court, the Department preferred appeals before the Hon'ble Supreme Court. Vide order dated 24.04.2018, the Apex Court dismissed the appeals filed by the Department. 5. It was submitted by Mr. Hardik Modh, learned advocate for the petitioner, that since the entire issue was sub judice, the petitioner had not filed the refund claim for subsequent imports. However, in view of the order passed by the Hon'ble Supreme Court, the petitioner had filed refund claim on 17.01.2019 for the goods imported during the period between 29.12.2008 to 03.03.2011 in terms of the Notification dated 14.09.2007. However, the refund claim came to be rejected on the ground that it was filed belatedly, though the date has to be reckoned as 24.04.2018, which is the date of judgment of the Apex Court. 6. We notice that instead of challenging the impugned order passed by the Assistant Commissioner of Customs before the Commissioner of Customs (Appeals), the petitioner has straightway approached this court by filing the present petition. It is apprehended by the petitioner that the interpretation made by the authority concerned regarding the period of limitation would come in its way while adjudicating the refund claim. It is apprehended by the petitioner that the interpretation made by the authority concerned regarding the period of limitation would come in its way while adjudicating the refund claim. 6.1 Reliance is placed on section 27 of the Act, which relates to claim for refund of duty. 6.2 It would be profitable to reproduce the provision at this stage: “SECTION 27. Claim for refund of duty. – (1) Any person claiming refund of any duty or interest, (a) paid by him; or (b) borne by him, may make an application in such form and manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest : Provided that where an application for refund has been made before the date on which the Finance Bill, 2011 receives the assent of the President, such application shall be deemed to have been made under sub-section (1), as it stood before the date on which the Finance Bill, 2011 receives the assent of the President and the same shall be dealt with in accordance with the provisions of sub-section (2) : Provided further that the limitation of one year shall not apply where any duty or interest has been paid under protest. Provided also that where the amount of refund claimed is less than rupees one hundred, the same shall not be refunded. Explanation. For the purposes of this sub-section, "the date of payment of duty or interest"" in relation to a person, other than the importer, shall be construed as "the date of purchase of goods" by such person. (1A) The application under sub-section (1) shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty or interest, in relation to which such refund is claimed was collected from, or paid by him and the incidence of such duty or interest, has not been passed on by him to any other person. (1B) Save as otherwise provided in this section, the period of limitation of one year shall be computed in the following manner, namely : (a) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 25, the limitation of one year shall be computed from the date of issue of such order; (b) where the duty becomes refundable as a consequence of any judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year shall be computed from the date of such judgment, decree, order or direction; (c) where any duty is paid provisionally under section 18, the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof or in case of re-assessment, from the date of such re-assessment.] (2) to (5) ...” 6.3 Sub-clause (b) of clause (1B) thereof provides that where the duty becomes refundable as a consequence of judgment, decree, order or direction of any authority, the limitation of one year or six months, as the case may be, shall be computed from the date of such judgment, decree, order or direction. 7. It is apt to refer to the decision of the Apex Court in the case of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others, (1998) 8 SCC 1 and more particularly, on the observations made in para15, which reads thus: “15. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. The High Court, having regard to the facts and circumstances of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions, one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. The High Court, having regard to the facts and circumstances of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions, one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by the Hon'ble Supreme Court not to operate as a bar in atleast three contingencies viz., where the writ petition has been filed for the enforcement of the any of the fundamental rights or where there has been a violation of the principles of natural justice or where the order or proceedings are wholly without jurisdiction or the virus of an Act is challenged." 8. In our opinion, all questions raised before this court, including the aspect of limitation, can be raised before the departmental appellate authority. When the statute provides for an efficacious alternative remedy in a given case, then such remedy has to be exhausted first before taking recourse to any other remedy. This is not the case where alternative remedy shall not operate as a bar as none of the contingencies, namely (i) violation of the principles of natural justice (ii) enforcement of any of the fundamental rights or (iii) where the order or proceedings are wholly without jurisdiction or the vires of an act, has been challenged. Hence, it would be appropriate that the petitioner avails the alternate remedy of challenging the impugned order by filing appeal before the departmental appellate authority. 9. In view of the above, the petition stands disposed of with the following directions : The petitioner shall be at liberty to file an appeal against the impugned order-in-original dated 31.10.2019 passed by the Office of respondent No.3 before the concerned Commissioner of Customs (Appeals) within a period of Two Weeks from the date of receipt of writ of this order. 9.1 If any such appeal is preferred, the appellate authority shall consider the same on merits and in accordance with law and shall not reject the appeal of the petitioner on the ground of delay. 9.2 While computing the period of delay, the appellate authority shall take into consideration the period during which this matter was pending before this court. 9.1 If any such appeal is preferred, the appellate authority shall consider the same on merits and in accordance with law and shall not reject the appeal of the petitioner on the ground of delay. 9.2 While computing the period of delay, the appellate authority shall take into consideration the period during which this matter was pending before this court. 9.3 The petitioner shall be at liberty to raise all contentions before the authority, including the aspect of limitation. It is made clear that this court has not entered into the merits of the case and therefore, the appellate authority shall decide the appeal being uninfluenced by the observations made by this court in this order. 9.4 With the above observations, the petition stands disposed of.