2000 (4) TMI 56 - AT - Central Excise

Summary

Issues Involved:
1. Whether the refund claim filed by the purchaser after six months from the date of purchase is barred by limitation under Section 11B(1) of the Central Excise Act.
2. Whether the benefit of the second proviso to Section 11B, which states that the limitation of six months does not apply where any duty has been paid under protest, can be availed by the purchaser.

Issue-wise Detailed Analysis:

1. Limitation Period for Refund Claim:

The core issue is whether the refund claim filed by the purchaser after six months from the date of purchase is barred by the limitation period under Section 11B(1) of the Central Excise Act. The Tribunal examined the provisions of Section 11B, as amended in 1991, which stipulates that any person claiming a refund of excise duty must make an application to the Assistant Commissioner of Central Excise before the expiry of six months from the relevant date. The relevant date for a purchaser is defined in sub-clause (e) of clause (B) of the Explanation to Section 11B as "the date of purchase of the goods by such person."

The Tribunal noted that the plain reading of sub-clause (e) in conjunction with Section 11B indicates that the purchaser must file the refund claim within six months from the date of purchase. This interpretation was upheld despite the divergent views in previous cases, where one bench held that the limitation period applies to the purchaser, while another bench opined that the limitation does not apply if the duty was paid under protest by the manufacturer.

2. Applicability of the Second Proviso to Section 11B:

The second proviso to Section 11B states that the limitation of six months shall not apply where any duty has been paid under protest. The Tribunal examined whether this proviso could be extended to the purchaser. The learned Counsel for the assessee argued that the purchaser should be entitled to the benefit of this proviso, as they step into the shoes of the manufacturer after purchasing the goods. However, the Tribunal found that the purchaser must independently substantiate their claim for a refund and cannot rely on the protest lodged by the manufacturer.

The Tribunal emphasized that the procedure for paying duty under protest, as outlined in Rule 233B of the Central Excise Rules, is intended for the manufacturer. The purchaser, having bought the goods from the manufacturer, cannot claim that they paid the duty under protest. Thus, the purchaser is bound by the six-month limitation period from the date of purchase, as specified in sub-clause (e) of clause (B) of the Explanation to Section 11B.

Separate Judgments:

Majority View:

The majority held that the statement of law in Super Cassettes Industries Ltd. & Ors., which suggested that the refund claim filed by the purchaser after six months from the date of purchase is not barred by limitation if the duty was paid under protest by the manufacturer, is incorrect. Instead, the law laid down in M/s. National Winders' case, which supports the six-month limitation period for the purchaser, was endorsed as correct.

Dissenting Opinion:

One member, A.C.C. Unni, disagreed with the majority view. He argued that the second proviso to Section 11B, which exempts the six-month limitation period where duty has been paid under protest, should apply to the purchaser as well. He reasoned that the purchaser steps into the shoes of the manufacturer and should benefit from the protest lodged by the manufacturer. He also emphasized that the purchaser should not be deprived of the right to claim a refund due to the six-month limitation period if the duty was initially paid under protest by the manufacturer.

Conclusion:

By majority, it was held that the refund claim filed by the purchaser after six months from the date of purchase is barred by limitation under Section 11B(1) of the Central Excise Act, even if the duty was paid under protest by the manufacturer. The purchaser must file the refund claim within six months from the date of purchase and cannot benefit from the second proviso to Section 11B regarding the protest lodged by the manufacturer.