1997 (7) TMI 186 - AT - Central Excise

Summary

Issues Involved:

1. Determination of the relevant date for refund claims under Section 11B of the Central Excise Act, 1944.
2. Interpretation of exemption Notifications based on total value/quantity of clearances during a financial year.
3. Application of limitation period for refund claims.

Summary:

Issue 1: Determination of the relevant date for refund claims u/s 11B of the Central Excise Act, 1944

The Larger Bench was tasked with deciding whether the relevant date for refund claims invoking Notifications granting exemption based on total value/quantity of clearances during a financial year should be the date of payment of duty or the close of that financial year. The Tribunal noted conflicting decisions from various High Courts and earlier Tribunal decisions. Ultimately, it was held that the relevant date for refund claims under such exemption Notifications would be the date of payment of duty, as per Explanation (f) to Section 11B of the Central Excise Act, 1944.

Issue 2: Interpretation of exemption Notifications based on total value/quantity of clearances during a financial year

The Tribunal reviewed several High Court decisions on whether the entitlement to exemption could be determined only at the end of the financial year. The Kerala High Court in T.T. Pylunny Royal Smiths case initially held that the period of limitation would commence from the end of the financial year. However, this was reversed by the Division Bench, which stated that the limitation period should start from the date of payment of duty. Similarly, the Andhra Pradesh High Court in Auric Engineering P. Ltd. case and the Bombay High Court in BTX Chemicals case took differing views on the matter. The Tribunal ultimately aligned with the view that the relevant date is the date of payment of duty, not the end of the financial year.

Issue 3: Application of limitation period for refund claims

The Tribunal emphasized that Section 11B does not provide for the limitation period to start from the accrual of the cause of action but rather from the date of payment of duty. The Tribunal cited the Supreme Court's decision in Siraj-ul-Haq Khan and others v. The Sunni Central Board of Waqf, which held that equitable considerations are immaterial in construing provisions of limitation. The Tribunal also referred to the Supreme Court's decision in J.K. Cotton Spinning and Weaving Mills v. Union of India, which reinforced that the limitation period must be strictly construed.

Conclusion:

The Tribunal concluded that the time limit for refund claims filed on the basis of Notifications granting exemption based on the value of clearances during a financial year will commence from the date of payment of duty. Consequently, the impugned orders of the lower appellate authority were set aside, and the appeals of the Revenue were allowed.