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2021 (4) TMI 1135 - HC - Central ExciseRebate of central excise duty - time limitation - Rule 18 of the Central Excise Rules, 2002 - case of petitioner is that his is a case of return of pre-deposit and of the Central Excise duty paid by the petitioner on any excisable goods and for such return of pre-deposit the petitioner is not required to file any formal refund claim under section 11B of the Central Excise Act - HELD THAT - This Court, at length, considered section 11B of the Act to hold that the person claiming refund of excise duty and interest, has to make an application for refund of such duty and interest to the authority enumerated therein before the expiry of one year from the relevant date in such form and manner as may be prescribed - The relevant date is defined in Explanation (A) and Explanation (B). The date on which the Tribunal allowed the appeal preferred by the petitioner which in the case before the High Court was 07.08.2007 and hence, therefore, within one year from the date of allowing the appeal by the Tribunal, the petitioner needed to prefer the claim for refund of excise duty in a prescribed form. The Court held that the payment made by the petitioner was towards the excise duty without protest and that can never be considered as pre-deposit. If any payment is made as the pre-condition for exercise of the statutory right, it can be termed as pre-deposit. However, it cannot be equated with voluntary deposit of excise duty paid even during the course of investigation and prior to show cause notice or adjudication, to assert that it is pre-deposit of payment of duty, which was intended to prevent the incidence of interest and liability accruing from the non-payment of duty and, hence, it cannot be termed as deposit. The Court held that payment made by the petitioner towards excise duty can never partake the character of pre-deposit, as mentioned in section 35F of the Act. Therefore, contention that the amounts were paid involuntarily and, therefore, are deemed to be under protest and should be considered as deposits needed to be rejected. In the instant case, in view of the well settled position of law that the procedural requirement cannot defeat the substantial right of the party ,as in absence of shipping bill, insistence on the shipment certificate was inevitable. Therefore, obtaining of the shipment certificate was the very fundamental requirement on the part of the petitioner. Soon after getting the copy of the shipment certificate, it has chosen to file the rebate claim with all requisite documents and, therefore, the same ought not to have been rejected on the ground of limitation. The view adopted by the Revisional Authority of the department of being bound by the period of limitation, despite there being a specific provision of paragraph No.2.4 of the CBEC Manual, which is a circumstance as held by the Court in COSMONAUT CHEMICALS VERSUS UNION OF INDIA 2008 (7) TMI 228 - HIGH COURT GUJARAT to mitigate an warranted hardship resulting from reading the provision of limitation in absolute terms - Even while considering the provision of acceptance of claim by the Authority when sole responsibility of supply of document is of the department, the fact remains that overall requirement is of furnishing of particular documents and in absence thereof, to deny the entertainment of such rebate claim and, therefore, waiting for the shipping bill to be delivered by the department cannot in any manner be held against the petitioner. More so, when the amendment has come on 01.03.2016 by way of Notification No.18 of and the claim is of the year 2010 and, therefore also, this being a subsequent change applying the period of limitation of one year at a later date; the decision of Cosmonaut Chemicals and also of other High Court would need to be regarded. The order whereby the claim of the petitioner has been rejected on the ground of being barred by the law of limitation under section 11B of the Act is quashed and set aside - petition allowed - decided in favor of petitioner.
Issues Involved:
1. Whether the rebate claim filed by the petitioner is admissible or barred by the law of limitation. 2. Applicability of Section 11B of the Central Excise Act to rebate claims under Rule 18 of the Central Excise Rules, 2002. 3. The impact of procedural delays caused by the Customs Department on the limitation period for filing rebate claims. Detailed Analysis: 1. Admissibility of Rebate Claim and Law of Limitation: The petitioner, engaged in the manufacture and export of polyester chips and yarn, filed a rebate claim for central excise duty paid on exported goods. The claim was denied on the grounds of limitation under Section 11B of the Central Excise Act, which mandates that claims be filed within one year from the date of export. The petitioner argued that the delay was due to the Customs Department's failure to issue the necessary shipment certificate in a timely manner. The High Court noted that the rebate claim was filed on 11.10.2011, after receiving the shipment certificate on 20.08.2011, and emphasized that procedural delays by the Customs Department should not disadvantage the claimant. 2. Applicability of Section 11B to Rebate Claims under Rule 18: The Court examined Rule 18 of the Central Excise Rules, 2002, which allows the Central Government to grant rebates on excisable goods subject to conditions and limitations specified in notifications. Notification No.19/2004 and its amendments, particularly Notification No.18/2016, explicitly linked the rebate claims to the limitation period specified in Section 11B. The Court highlighted that the amendment came into effect on 01.03.2016, whereas the petitioner's transactions occurred in 2010. The Court concluded that the rebate claim should not be barred by the limitation period since the amendment was not applicable at the time of the petitioner's transactions. 3. Impact of Procedural Delays by Customs Department: The Court referred to Paragraph 2.4 of Chapter IX of the CBEC Manual, which provides that if a document is unavailable due to the Customs Department's fault, the rebate claim should be admitted to avoid disadvantaging the claimant. The Court cited the decision in Cosmonaut Chemicals vs. Union of India, which held that rebate claims should not be rejected on the ground of limitation when delays are caused by the Customs Department. The Court emphasized that procedural requirements should not defeat substantial rights and that the petitioner's rebate claim, filed promptly after receiving the shipment certificate, should not be rejected due to procedural delays. Conclusion: The High Court quashed the order rejecting the rebate claim on the grounds of limitation, directing the authorities to process and sanction the rebate claim within 12 weeks. The Court underscored the principle that procedural delays by the Customs Department should not disadvantage the claimant and that the amendment linking the rebate claims to Section 11B's limitation period was not applicable to the petitioner's case.
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