2016 (4) TMI 839 - HC - Central Excise

Refund/rebate claim rejected - Computation of limitation - Held that - There is no quarrel with proposition that if Statute provided for limitation, it has to be adhered to. What however is being claimed by the petitioner is different. The question which arises in the present case is as to what should be the starting point for computation of this period of one year. We are persuaded to follow the view taken by the Gujarat High Court in Cosmonaut Chemicals 2008 (7) TMI 228 - HIGH COURT GUJARAT that any procedure prescribed by a subsidiary legislation has to be in aid of justice and procedural requirements cannot be read so as to defeat the cause of justice. The claimant cannot be asked to tender deficient claim within limitation period and claim cannot be simultaneously treated as not filed till documents furnished, if the manual of supplementary instruction indicating that refund or rebate claim deficient in any manner to be admitted when delay in providing document is attributable to the Department. Where the lapse as to non-availability of requisite document is on account of Central Excise Department or Customs Department, this would be mitigating circumstance flowing from the aforesaid legislative scheme. Limitation is to be considered in the light of availability of requisite documents and should be taken to begin when documents necessary for substantiating the claim of refund are furnished by the department, which, in our considered view, should be the starting point for computation of limitation. In view of the above, present writ petition succeeds and the same is allowed. The impugned judgment is set aside. The respondents are directed to allow the refund/rebate to the petitioner together with statutory rate of interest, applicable as per the Rules. - Decided in favour of assessee

Summary

Issues Involved:
1. Applicability of Section 11B of the Central Excise Act, 1944, to rebate claims under Rule 18 of the Central Excise Rules, 2002.
2. Determination of the starting point for the computation of the limitation period for filing rebate claims.
3. The impact of delays caused by Customs Authorities on the limitation period for rebate claims.

Issue-wise Detailed Analysis:

1. Applicability of Section 11B of the Central Excise Act, 1944, to rebate claims under Rule 18 of the Central Excise Rules, 2002:
The petitioner argued that Section 11B, which prescribes a one-year limitation period for claiming refunds of excise duty, should not apply to rebate claims under Rule 18 of the Central Excise Rules, 2002, as no such limitation is specified in Rule 18. The petitioner's counsel contended that the date of release of necessary documents by the Customs Department should be considered for computing the limitation period. The court examined the relevant provisions and noted that Section 11B stipulates that refund claims must be filed within one year from the relevant date unless the duty was paid under protest. Rule 18 allows the Central Government to grant rebates on exported goods, subject to conditions specified in the notification, which includes the submission of original documents.

2. Determination of the starting point for the computation of the limitation period for filing rebate claims:
The petitioner claimed that the delay in filing the rebate claim was due to the late receipt of shipping documents from the Customs Authorities. The court referred to the Gujarat High Court's judgment in Cosmonaut Chemicals, which held that the limitation period should be considered from the date the necessary documents are made available to the claimant. The court emphasized that procedural requirements should not defeat the cause of justice and that the limitation period should begin when the claimant receives the requisite documents from the department. The court found that the delay was beyond the petitioner's control and attributable to the Customs Department's delay in providing the necessary documents.

3. The impact of delays caused by Customs Authorities on the limitation period for rebate claims:
The petitioner argued that the delay in filing the rebate claim was due to the Customs Department's delay in providing the shipping documents, which were necessary for substantiating the claim. The court considered the judgments in Dorcas Market Makers Pvt. Ltd. and Exclusive Steels Pvt. Ltd., which supported the view that delays caused by the Customs Department should not penalize the claimant. The court held that the limitation period should be computed from the date the necessary documents are furnished by the department. The court concluded that the petitioner's claim was not time-barred as the delay was due to circumstances beyond the petitioner's control.

Conclusion:
The court allowed the writ petition, set aside the impugned judgment, and directed the respondents to allow the refund/rebate to the petitioner with statutory interest. The court emphasized that the limitation period should be computed from the date the necessary documents are provided by the department, ensuring that procedural requirements do not defeat the cause of justice. The respondents were instructed to comply within two months from the date of the order.