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2020 (8) TMI 138 - HC - Central ExciseEffect of amendment in the notification - Scope of the term Substitute - Refund of Cenvat credit - time limitation - relevant date for filing refund claim - one year from the relevant date and the relevant date would be the date of receipt of payment in convertible foreign exchange with regard to the export - whether the reckoning of the relevant period brought about through the notification No.14/16 dated 01.03.2016 by substitution would be prospective or retrospective in nature? HELD THAT - Originally, Notification No.27/12 dated 18.06.2012 prescribed the procedure for filing the refund claims, by which, the claimant was required to file the application before the expiry of period specified in Section 11B of the Central Excise Act. Clause 3(b) of the Notification No.27/12 dated 18.06.2012 came to be substituted , whereby the relevant date would be one year from the date of receipt of payment in convertible foreign exchange, where provision of service has been completed prior to payment. The Notification No.14/2016 is a substitution to the original paragraph 3(b) of Notification No.27/2012. The term Substitution literally means as a thing acting or used in place of another - to substitute certain words or phrases or sentences in the original notification, would mean that the subsequent substitution would replace those words, phrases or sentences. In effect, what originally stood in the notification is replaced with the subsequent notification brought through substitution. While that being so, it cannot be construed as a new amendment for giving effect to certain procedures prospectively, but rather requires to be interpreted as having replaced the original procedure and thereby, the replacement would come into effect for the same time as the original procedure was provided for. If this interpretation is applied to the facts of the case involved, the reasoning of the respondent adduced in the impugned order that the relevant date would be the date of receipt of payment in convertible foreign exchange and thereby, the findings that the application was time barred, cannot be found fault with. Petition dismissed.
Issues Involved:
1. Whether the reckoning of the relevant period brought about through Notification No.14/16 dated 01.03.2016 by substitution would be prospective or retrospective in nature. Issue-wise Detailed Analysis: 1. Whether the reckoning of the relevant period brought about through Notification No.14/16 dated 01.03.2016 by substitution would be prospective or retrospective in nature: The petitioner, an Export Oriented Unit, filed refund claims for Input Service Tax Credit under Rule 5 of the CENVAT Credit Rules 2004 r/w Notification No.27/2012-CE (NT) dated 18.06.2012. The respondent rejected the claims on the grounds that they were time-barred, stating that the relevant date for filing the refund claim is the date of receipt of payment in convertible foreign exchange. The petitioner argued that the amendment introduced by Notification No.14/2016 dated 01.03.2016 should apply prospectively and not to earlier quarters. The respondent countered that the amendment was a substitution and thus applied retrospectively. The court examined Section 11(B) of the Central Excise Act 1944 and the relevant notifications. It noted that the original Notification No.27/12 dated 18.06.2012 required the claimant to file the application before the expiry of the period specified in Section 11B. Notification No.14/2016 substituted Clause 3(b) of Notification No.27/12, specifying that the relevant date would be one year from the date of receipt of payment in convertible foreign exchange. The court clarified that the term "substitution" means replacing the original words, phrases, or sentences with new ones, effectively making the new provision part of the original notification from its inception. Thus, the substitution in Notification No.14/2016 is retrospective, replacing the original procedure provided in Notification No.27/12. The court referenced several judgments to support this interpretation, including the Hon'ble Division Bench of the Karnataka High Court in Fosroc's case and the Constitution Bench of the Supreme Court in Shamarao V. Parulekar, which held that substitution implies the new provision replaces the old one from the date the original provision was enacted. The court concluded that the respondent's reasoning that the relevant date is the date of receipt of payment in convertible foreign exchange, and thus the applications were time-barred, was correct. The petitioner's reliance on the cases of TARAJYOT POLYMERS LTD and SODEXO FOOD SOLUTIONS was found inapplicable as they did not deal with the substitution of a provision. In conclusion, the court dismissed the writ petitions, upholding the respondent's decision that the refund claims were time-barred due to the retrospective application of the substituted provision in Notification No.14/2016.
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