2019 (8) TMI 317 - HC - Central Excise

Rebate of duty - Rule 18 of the Central Excise Rules, 2002 - rebate on exports beyond one year from the date of shipment being dispatched - period February 2013 to October 2013 - HELD THAT - Upon consideration of the provisions of Section 11A of the Act as also Rule 57-I of the Rules, both prior to the amendment and after the amendment made on 05.10.1988, the Supreme Court held - the provisions of Section 11A of the Act were not an omnibus provision and that the situation arising before it had to be dealt with according to the unamended Rule 57-I of the Rules because section 11A was the law to provide for recoveries of excise duty not-levied or not-paid or short-levied or short-paid while Rule 57-I was the law for availment of MODVAT credit, a completely separate or different contingency, not covered under section 11A of the Act. Insofar as the Rule 57-I did not provide for any period of limitation and did not borrow the rule of limitation from Section 11A of the Act, by way of first reason, the Supreme Court rejected the defence set up by the manufacturer and held the recovery sought by the revenue to be within time. The scheme for rebate under Rule 18 of the Rules read with Notification No. 19 of 2004 dated 06.09.2004 is a special law granting rebate from excise duty to exporters. It is not a scheme for general rebate (under section Explanation A to 11B of the Act). The rebate is not a general rebate from excise duty (that may be otherwise available under the Act). The scheme to grant rebate from excise duty on goods exported by the petitioner was a special beneficial scheme provided under Section 37 of the Act read with Rule 18 of the Rules and notification No. 19 of 2004 dated 06.09.2004, to provide incentive to manufacturers to export their manufactured goods. It was a self contained scheme - None of the conditions and limitations provided under the aforesaid notification were such as may be read to contain a stipulation of limitation of one year from the relevant time or from the date of shipment etc. for the purpose of making a claim for rebate. There is no room to add to those conditions and limitations by reading the general provisions of section 11B of the Act into it. Petition allowed.

Issues Involved:
1. Applicability of Section 11B of the Central Excise Act, 1944 to rebate claims.
2. Distinction between rebate claims and refund claims.
3. Impact of the amendment made by Notification No. 18 of 2016 dated 01.03.2016 on the period of limitation for rebate claims.
4. Interpretation of the Supreme Court's decision in Raghuvar (India) Ltd. and its applicability to the present case.

Detailed Analysis:

1. Applicability of Section 11B of the Central Excise Act, 1944 to Rebate Claims:
The petitioner contended that Section 11B of the Central Excise Act, 1944, which prescribes a period of limitation for refund claims, does not apply to rebate claims. The petitioner argued that the rebate scheme under the Central Excise Rules, 2002, read with Notification No. 19/2004 dated 06.09.2004, is distinct from the scheme for levy of excise duty under the Act. The rebate claims were rejected as time-barred under Section 11B, but the petitioner maintained that Section 11B is only relevant for refund claims and not for rebate claims.

2. Distinction between Rebate Claims and Refund Claims:
The petitioner asserted that the rebate claims should not be equated with refund claims. Even if rebate claims are considered similar to refund claims, the petitioner argued that the rebate scheme is a special beneficial scheme that should not be subjected to the general limitation period under Section 11B. The petitioner referenced the Explanation (A) to Section 11B, which includes rebate of duty in the definition of refund, but maintained that this does not automatically subject rebate claims to the limitation period specified in Section 11B.

3. Impact of the Amendment Made by Notification No. 18 of 2016:
The petitioner highlighted that the Central Government introduced a specific rule of limitation for rebate claims through Notification No. 18 of 2016 dated 01.03.2016. This amendment explicitly incorporated the limitation period specified in Section 11B for rebate claims. The petitioner argued that this amendment is prospective and does not apply to claims made before its introduction. The claims in question arose prior to the amendment, and therefore, the petitioner contended that they should be governed by the pre-amendment law, which did not specify a limitation period for rebate claims.

4. Interpretation of the Supreme Court's Decision in Raghuvar (India) Ltd.:
The petitioner relied on the Supreme Court's decision in Raghuvar (India) Ltd., which distinguished between general provisions of the Act and special schemes like MODVAT. The petitioner argued that similar reasoning should apply to the rebate scheme under Notification No. 19/2004, which is a special scheme distinct from the general provisions of the Act. The petitioner also referenced decisions from the Madras and Punjab & Haryana High Courts, which supported the view that the rebate scheme should be governed by its own special provisions and not by the general limitation period under Section 11B.

Court's Analysis and Conclusion:
The court examined the arguments and the relevant legal provisions. It considered the Supreme Court's decision in Raghuvar (India) Ltd., which emphasized the distinction between general provisions and special schemes. The court noted that the rebate scheme under Notification No. 19/2004 is a special beneficial scheme with its own conditions and procedures. The court agreed with the petitioner that the pre-amendment notification did not incorporate the limitation period from Section 11B, and the amendment introduced by Notification No. 18 of 2016 is prospective.

The court found the reasoning of the Madras and Punjab & Haryana High Courts persuasive and distinguished the decision of the Bombay High Court in Everest Flavours Ltd. The court held that the special provisions of the rebate scheme should prevail over the general limitation period under Section 11B. Consequently, the court allowed the writ petition, remitting the matter to the original authority to pass necessary orders within three months.

Conclusion:
The court concluded that the rebate claims made by the petitioner are not subject to the limitation period specified in Section 11B of the Central Excise Act, 1944. The special provisions of the rebate scheme under Notification No. 19/2004 govern such claims, and the amendment made by Notification No. 18 of 2016 applies prospectively. The writ petition was allowed, and the matter was remitted to the original authority for further action.

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