2007 (8) TMI 361 - HC - Central Excise

Whether the notification No. 4/97 C.E. dated 1st March, 1997 permits the Competent Authority to allow refund in a case, where a vehicle was registered more than three months after clearance but within the six months period within which an application for refund can be made in terms of Section 11B of the Central Excise Act? Held that - In the instant case, the Assistant Commissioner, Central Excise merely proceeded on the basis that the appellants had satisfied the conditions under the Notification and the refund claim was filed within six months. The issue whether on the facts he ought to have exercised discretion to extend the period of registration was not really addressed to by the Assistant Commissioner. Considering that, in our opinion, the ends of justice will be met if we set aside the orders dated 30-3-2005 passed by the CESTAT and order dated 14-7-2000 of the Commissioner (Appeals) and the order dated 16-11-1998 of the Assistant Commissioner to the extent of relief of the four vehicles mentioned earlier. The matter is remanded back to the Assistant Commissioner for reconsideration and disposal according to law in the light of what we have observed. The question of law is accordingly answered and the appeal is partly allowed

Summary

Issues:
Whether the CESTAT was right in denying refund under entry 195 to Notification No. 4/97 C.E. dated 1st March, 1997?

Analysis:
The case revolved around the interpretation of General Exemption No. 66 under Serial No. 195, specifically regarding the use of a vehicle as a taxi. The appellant sought a refund for 50 motor vehicles cleared, but the Assistant Commissioner only partially allowed the claim, leading to an appeal by the Revenue. The Commissioner of Central Excise (Appeals) held that the notification did not provide for condoning the three-month registration period for vehicles used as taxis, citing the lack of power for relaxation. The Commissioner distinguished a previous judgment but ultimately allowed the department's appeal.

Upon further appeal to CESTAT, it was held that the three-month registration period was fixed, and there was no provision for extending it in the notification. The High Court was tasked with determining whether the Competent Authority could allow a refund for a vehicle registered more than three months after clearance but within the six-month refund application window. The court examined Para 34(b) of the notification, emphasizing the requirement for a certificate from an authorized officer of the State Transport Authority confirming registration within the specified period.

The court clarified that while there was no time limit for producing the certificate, it must reflect registration within three months of clearance. The Assistant Commissioner could extend the registration period, not the certificate production deadline. The court emphasized that the power to extend registration was crucial due to vehicle registration complexities. The court criticized the lower authorities for not addressing the issue correctly, emphasizing the need to consider extending the registration period within the six-month refund application window. Consequently, the court set aside previous orders and remanded the matter for reconsideration by the Assistant Commissioner to ensure justice was served.

In conclusion, the court partially allowed the appeal, highlighting the importance of considering the Assistant Commissioner's discretion in extending the registration period for refund eligibility within the statutory timeframe. The judgment aimed to rectify the oversight in addressing the extension of the registration period and emphasized adherence to legal provisions for refund claims.