2019 (8) TMI 206 - HC - Central Excise

Refund of duty - time limitation - Section 11B of the Central Excise Act 1944 - period 1984-1985 to 1986-1987 - HELD THAT - A reading of section 11B shows that according to the first proviso wherein application for refund were made before the commencement of the Central Excise Customs Laws (Amendment Act 1991), then those applications shall be deemed to have been made under Section 11B of the Act as amended by the said Act and they shall be deal with in accordance with the provisions of sub-section (2) substituted by that Act. Under the second proviso, it had been provided that the period of limitation was not applied only when the duty had been paid in protest. In the instant case, the claims had been preferred on 02.02.1988 with respect to the years 1984-1985 to 1985-1986 - They were clearly beyond the prescribed period of limitation of one year. They had also not been paid under protest to enable extension of period of limitation. However the contention of the learned counsel that the period of limitation would commence only when the certificates were actually issued by the Directorate of Sugars cannot be countenanced since they were only enabling certificates and even according to him, the Notification No. 130/1983 relating to the incentive certificate had been issued on 27.04.1983 itself. The amended provisions of the Act came into force on 20.09.1991. The application for refund duty filed on 02.02.1988 was pending before the Original Authority. In that case, the amended provisions of the Act would still be operative and this would prevent the refund since the provisions are retrospectively applicable as stated under Sub-Section (3) of Section 11B of the Act, which had been extracted in the relevant portion referred above in the order of the Hon'ble Supreme Court - the refund claim for the period 1983-1984 and 1984-1985 are clearly barred by limitation under Section 11-B of the Central Excise Act 1944 Appeal dismissed.

Summary

Issues:
1. Refund claim for the years 1984-1985 and 1985-1986 rejected on the ground of limitation under Section 11B of the Central Excise Act, 1944.
2. Claim for refund for the period 19.02.1987 to 30.05.1987 granted as within the period of limitation.
3. Interpretation of Section 11B regarding the commencement of the period of limitation for refund claims.

Analysis:
1. The appellant, engaged in sugar manufacturing, filed refund claims totaling ?9,61,704 for the years 1984-1985 to 1986-1987. The claims for 1984-1985 and 1985-1986 were rejected due to being outside the one-year limitation period under Section 11B. However, the claim for 19.02.1987 to 30.05.1987 was granted as within the limitation period, upheld by the Tribunal.

2. The appellant argued that the refund claims were based on government incentives for sugar factories, allowing higher free sale quotas. The excise duty on this additional quota was to be retained by the factories as an incentive. The certificates required for these incentives were issued in 1987 and 1988, after which the refund claims were made. The appellant contended that the limitation period should start from when these certificates were issued, not from the date of the claims.

3. The respondent supported the rejection of the claims, citing Section 11B which does not allow an extension of the limitation period. The court analyzed Section 11B, noting that the claims were filed in 1988 for the years 1984-1985 and 1985-1986, clearly beyond the limitation period. The court rejected the appellant's argument that the limitation should start from the certificate issuance date, as the certificates were enabling and not mandatory for payment under protest.

4. Referring to a previous judgment, the court emphasized that amended provisions of the Act were applicable when the claims were pending before the Original Authority. The court concluded that the refund claims for the years 1984-1985 and 1985-1986 were time-barred under Section 11B and upheld the decisions of the lower authorities and the Tribunal, dismissing the appeal.