2016 (8) TMI 1515 - HC - Central Excise

Rejection of refund claim/export rebate - rejection on the ground of time limitation - appeal initially filed before wrong forum - allegation that claim apparently made to the wrong Maritime Commissioner; instead of filing it before the appropriate jurisdictional Commissioner i.e. in Bhiwadi or in Delhi where the exports took place - HELD THAT - In this case what the petitioners were seeking was neither revisional nor appellate relief. Rather they were seeking a benefit which was admissible to them in terms of a Statute and the Notifications issued thereunder. That they were liable to pay customs duty for the imports made is not disputed; that for such imports upon export of the ultimate produce they were entitled to revision/rebate is also not in dispute; it is rather an entitlement. This rebate was premised upon sound public policy i.e. encouragement of export on foreign exchange earnings. Such being the case the considerations as well as the construction to be placed upon Section 11B which applies to all manner of refunds - whether it is in case of excess payment of duty amounts payable where no duty is leviable or in the case of refund unrelated to levy per se would vary. In a case where refund is claimed on account of the entitlement of an application under some scheme which is conceived in the larger public interest strict adherence to the principle that an application made within the period of time to the wrong authority but subsequently filed before the correct authority would still be considered time-barred in our opinion acts very unreasonably. In the case of M.P. Steel Corporation v. Commissioner of Central Excise 2015 (4) TMI 849 - SUPREME COURT has surveyed the law on the subject - including Parson Tools - and concluded that the period from the cause of action till institution of appellate or revisional proceedings from original proceedings - which proved to be abortive appeal should be excluded. The refund claims should have been adjudicated as if they had been originally filed before the authorities having jurisdiction. That rebate was premised on the basis of jurisdiction primarily applicable for assessment is a matter of convenience in the circumstances of the case - Petition allowed.

Summary

Issues:
Challenge to impugned order of Central Government on time-barred refund application under Section 11B of the Act.

Analysis:
In the present case, the petitioner exported bulk drugs eligible for export rebate under Rule 12 of the Central Excise Rules. The refund applications were filed within the prescribed time under Section 11B of the Act but were submitted to the wrong Maritime Commissioner. The revisional authority held the refund claim time-barred due to the fixed limitation period without any extension relief. The petitioner argued that the principle of Section 14(2) of the Limitation Act should be considered, citing relevant case law. The respondents contended that the petitioner was aware of the correct jurisdiction for refund claims, as clarified in Circular No. 81/81/94-CX. The judgment highlighted the importance of jurisdictional considerations and the discretion of the revisional authority in exceptional cases of hardship.

The judgment referred to the case law of The Commissioner of Sales Tax v. M/s. Parson Tools and Plants, Kanpur, and M.P. Steel Corporation v. Commissioner of Central Excise to discuss the applicability of the Limitation Act and the discretion of the revisional authority. It emphasized that the petitioners were not seeking revisional or appellate relief but a benefit entitled to them under the Statute and relevant Notifications. The court recognized the public policy behind export rebates and the need for a reasonable approach in cases of refund claims related to larger public interest schemes. The judgment concluded that the refund claims should have been adjudicated as if originally filed before the correct authorities, considering the entitlement to rebate based on jurisdiction and public policy.

As a result, the writ petition was allowed, directing the concerned Deputy Commissioner to consider the refund claims and issue appropriate orders within three months from the judgment date.