2022 (12) TMI 49 - SC - Central Excise

Rejection of rebate claim - Period of limitation when no reference is given in the relevant Rule or Notification - applicability of time/limitation prescribed u/s 11B - HELD THAT - It is required to be noted that Rule 18 of the 2002 Rules has been enacted in exercise of rule making powers under Section 37(xvi) of the Act. Section 37(xxiii) of the Act also provides that the Central Government may make the rules specifying the form and manner in which application for refund shall be made under section 11B of the Act. In exercise of the aforesaid powers, Rule 18 has been made and notification dated 6.9.2004 has been issued. At this stage, it is required to be noted that as per Section 11B of the Act, an application has to be made in such form and manner as may be prescribed. Therefore, the application for rebate of duty has to be made in such form and manner as prescribed in notification dated 6.9.2004. However, that does not mean that period of limitation prescribed under Section 11B of the Act shall not be applicable at all as contended on behalf of the appellant. Merely because there is no reference of Section 11B of the Act either in Rule 18 or in the notification dated 6.9.2004 on the applicability of Section 11B of the Act, it cannot be said that the parent statute Section 11B of the Act shall not be applicable at all, which otherwise as observed hereinabove shall be applicable with respect to rebate of duty claim. The issue involved in the present appeal is squarely covered by the decision of this Court in the cases of Mafatlal Industries Ltd. 1996 (12) TMI 50 - SUPREME COURT and Uttam Steel Limited 2015 (5) TMI 214 - SUPREME COURT . After taking into consideration Section 11B of the Act and the notification and procedure under Rule 12, it is specifically observed and held that rebate of duty of excise on excisable goods exported out of India would be covered under Section 11B of the Act. After referring to the decision of this Court in the case of Mafatlal Industries Ltd., it is further observed in the case of Uttam Steel Limited that such claims for rebate can only be made under Section 11B within the period of limitation stated therefor. It is observed and held that while making claim for rebate of duty under Rule 18 of the Central Excise Rules, 2002, the period of limitation prescribed under Section 11B of the Central Excise Act, 1944 shall have to be applied and applicable. In the present case, as the respective claims were beyond the period of limitation of one year from the relevant date, the same are rightly rejected by the appropriate authority and the same are rightly confirmed by the High Court. We see no reason to interfere with the impugned judgment and order passed by the High Court. Under the circumstances, the present appeal fails and deserves to be dismissed. Appeal dismissed.

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. Distinction between rebate claims and refund claims.
3. Interpretation of subordinate legislation in relation to the parent statute.

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 main issue was whether the period of limitation prescribed under Section 11B of the Central Excise Act, 1944 applies to rebate claims under Rule 18 of the Central Excise Rules, 2002. The appellant argued that Section 11B should not apply to rebate claims, citing the absence of a specific reference to Section 11B in Rule 18 or the notification dated 6.9.2004. However, the Court held that Section 11B, being a substantive provision in the parent statute, is applicable to rebate claims. The Court emphasized that subordinate legislation, such as Rule 18 and the notification, cannot override the parent statute. The Court concluded that the period of limitation prescribed under Section 11B must be adhered to for rebate claims.

2. Distinction between Rebate Claims and Refund Claims:

The appellant contended that rebate claims under Rule 18 are distinct from refund claims under Section 11B, arguing that rebate is an incentive for exporters and should not be subjected to the same limitations. The Court rejected this argument, stating that Section 11B explicitly includes rebate of duty within its scope as per Explanation (A). The Court referred to previous judgments, including Mafatlal Industries Ltd. and Uttam Steel Limited, which held that rebate claims are covered under Section 11B. The Court also noted that the relevant date for rebate claims is defined under Explanation (B) to Section 11B, making it clear that rebate claims must be made within one year from the relevant date.

3. Interpretation of Subordinate Legislation in Relation to the Parent Statute:

The appellant argued that since Rule 18 and the notification issued under it do not mention Section 11B, the limitation period under Section 11B should not apply. The Court held that subordinate legislation must be read in harmony with the parent statute and cannot make the parent statute otiose or redundant. The Court emphasized that the absence of a reference to Section 11B in Rule 18 or the notification does not imply that Section 11B is inapplicable. The Court reiterated that the form and manner of making an application for rebate are prescribed in the notification, but the period of limitation remains governed by Section 11B.

Conclusion:

The Court concluded that the period of limitation prescribed under Section 11B of the Central Excise Act, 1944 applies to rebate claims under Rule 18 of the Central Excise Rules, 2002. The appellant's claims were rightly rejected as they were made beyond the one-year limitation period. The Court dismissed the appeal, affirming the decisions of the lower authorities and the High Court.

The judgment highlights the importance of adhering to the statutory period of limitation and the necessity of interpreting subordinate legislation in a manner that supports the parent statute.