2015 (10) TMI 1106 - HC - Central Excise

Denial of rebate claim - Bar of limitation - Export of goods - petitioner paid duty on inputs and to export the goods on payment of duty and thereafter claimed a rebate of the duty paid in respect of the exported goods - held that - In exercise of powers under rule 18, the Central Government issued a notification being Notification No. 19/2004 dated 06.09.2004 granting a rebate of the whole of the duty on excisable goods specified therein subject to the conditions, limitations and procedures specified hereinafter . This notification does not prescribe any period of limitation in respect of a claim for rebate. Clause 2 of the notification specifies the Conditions and Limitations . Sub-clauses (a) to (g) specify various conditions and limitations but do not prescribe any limitation as to the period within which a claim for rebate is to be made. Rule 18 of the Central Excise Rules, 2002, expressly provides that where any goods are exported the Central Government may by notification grant a rebate of the duty paid and that rebate shall be subject to such conditions or limitations, if any, and fulfilment of such procedure as may be specified in the notification. Under rule 18, therefore, a party is entitled to the rebate subject to such conditions or limitations as may be specified in the notification. In respect of grant of rebate, it is open to the Central Government to impose conditions or limitations including as to the period within which the rebate ought to be claimed. The rule is wide enough to authorise the Central Government to impose a condition or limitation stipulating the period within which the facility granted, namely, rebate is to be claimed. The language is wide enough in this regard. Petitioner s claim for refund would be governed by rule 18 of the Central Excise Rules, 2002 read with the notification issued thereunder. The said notification does not provide any period of limitation for a claim for rebate. The rejection of the petitioner s claim for rebate, therefore, is not well founded. - impugned order dated 26.05.2014 of the Commissioner of Central Excise (Appeals) is quashed and set aside - Decided in favour of assessee.

Issues Involved:
1. Whether the petitioner's claim for rebate is barred by limitation under Section 11-B of the Central Excise Act, 1944.
2. Applicability of Section 11-A and 11-B of the Central Excise Act, 1944, to the petitioner's claim for rebate.
3. Interpretation of Rule 18 of the Central Excise Rules, 2002, and the notification issued thereunder regarding the period of limitation for rebate claims.
4. Relevance of the Supreme Court judgment in Collector of Central Excise v. Raghuvar (India) Ltd. to the present case.
5. Validity of the appellate authority's order dismissing the petitioner's claim for rebate.

Detailed Analysis:

1. Limitation under Section 11-B of the Central Excise Act, 1944:
The petitioner challenged an order dismissing its appeal on the ground that its claim for rebate was barred by limitation. The petitioner exported goods in September 2011 and filed the ARE-I Forms within 48 hours but submitted other documents more than a year later. The adjudicating authority and appellate authority both rejected the rebate claim due to the limitation period prescribed under Section 11-B of the Central Excise Act, 1944.

2. Applicability of Section 11-A and 11-B:
Section 11-A deals with the recovery of duties not levied, short-paid, or erroneously refunded, while Section 11-B pertains to claims for the refund of duty. The court referenced a Supreme Court judgment where Section 11-A was found not applicable to MODVAT credit cases, indicating that Section 11-A is not an omnibus provision for all actions under the Act but is limited to specific situations of duty recovery.

3. Interpretation of Rule 18 and Notification:
Rule 18 of the Central Excise Rules, 2002, allows the Central Government to grant a rebate on duty paid for exported goods, subject to conditions specified in a notification. The relevant notification did not prescribe any period of limitation for rebate claims. The court emphasized that if the Central Government intended to impose a time limit, it would have explicitly done so in the notification, as was done under the previous rule 12 of the Central Excise Rules, 1944.

4. Relevance of Supreme Court Judgment in Raghuvar (India) Ltd.:
The Supreme Court in Raghuvar (India) Ltd. held that Section 11-A did not apply to MODVAT credit cases, which are governed by a special scheme with its own enforcement provisions. The court in the present case found this reasoning applicable, indicating that the special provisions under Rule 18 and the notification issued thereunder should govern rebate claims, not the general limitation period under Section 11-B.

5. Validity of Appellate Authority's Order:
The court disagreed with the appellate authority's reliance on Section 11-B for dismissing the rebate claim. It referenced a Division Bench judgment of the Madras High Court, which held that the limitation period in Section 11-B could not be imported into a scheme/notification under Rule 18. The court found the appellate authority's rejection of the rebate claim to be unfounded, as the notification under Rule 18 did not impose any limitation period for such claims.

Conclusion:
The court quashed the impugned order of the Commissioner of Central Excise (Appeals) and directed that the petitioner's application for rebate be processed without considering it barred by the limitation period prescribed in Section 11-B of the Central Excise Act, 1944. The court held that the rebate claim should be governed by Rule 18 of the Central Excise Rules, 2002, and the relevant notification, which did not specify any limitation period.

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