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TMI Blog2009 (2) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... AM : MS. JYOTI BALASUNDARAM, VICE PRESIDENT, MR. P. KARTHIKEYAN, MEMBER (TECHNICAL) Per P. Karthikeyan : These appeals relate to claims for refund of excise duty in terms of Notification No.32/05-CE as amended by Notification No.35/05. These notifications exempted cement and steel purchased for construction of houses for tsunami victims mainly by Non-Governmental Organizations (NGOs) from excise duty subject to evidence of payment. The Notifications are reproduced below:- Notification No.32/05-C.E. dated 17-Aug-2005 Cement and steel used in construction of houses in tsunami affected areas of Tamil Nadu, Andhra Pradesh, Kerala, Pondicherry and Andaman and Nicobar Islands - Exemption In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with section 91 and section 93 of the Finance (No.2) Act, 2004 (23 of 2004), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts cement falling under Chapter 25, and steel falling under Chapters 72 or 73 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as said goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the specified purposes, and on production of documentary evidence about the duty paid on the said goods, sanction the refund claim, at the rate of 6% of the cost of construction of such house or houses, as the case may be, subject to a maximum of Rs.9000 per house constructed in any case; and (e) The refund under clause (d) shall be given only to the concerned approved construction agency. 4. The amount of refund shall not exceed 6% of the cost of construction or Rs.9000 per house constructed, whichever is less, in any case. 5. The exemption contained in this notification shall only be in respect of said duties paid on the said goods, which have been used in such houses constructed on or after the 1st April, 2005 and on or before 31st July, 2006. Notification No.35/2005-C.E. dated 29-Nov-2005 Cement and steel used in construction of houses in Tsunami affected areas -Exemption - Amendment to Notification No. 32/2005-C.E. In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with section 91 and section 93 of the Finance (No.2) Act, 2004 (23 of 2004). the Central Government, being satisfied that it is ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /08 dt. 21.08.07 2005-06 37,85,289 *Filed by M/s. Church's Auxiliary Social Action. * Filed by Revenue. 2. Order-in-Appeal No.76/06 dt. 30.11.06 impugned in Appeal No.E/11/08 denied claims for refund of a total Rs.2,52,144/- filed by an NGO, M/s. Church's Auxiliary Social Action (CASA), Nagapattinam and of M/s. Tata Relief Committee, Nagapattinam. The claims filed by the appellants were rejected by the original authority and the said orders affirmed by the Commissioner (Appeals) vide the order impugned. The appeal filed by CASA is before us. The Commissioner (Appeals) found that the appellants had not filed the refund claims on quarterly basis within 60 days from the end of the relevant quarter, or the further period of another 60 days extendable by the jurisdictional excise officer. This was the time limit prescribed in the notification. Relying on the apex Court's judgment in M/s. Tata Iron Steel Co. Ltd. Vs. State of Jharkand reported in AIR 2005-SC-2871, the Commissioner (Appeals) sustained the order of the original authority and rejected the claims for refund. In the judgment cited, the apex Court had held that "Eligibility clause in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers Ltd. Vs DC 1991 (155) ELT 437 (SC) in support. "There is a fallacy in the emphasis of this argument. The consequence which Shri Narasimhamurthy suggests should flow from the non-compliance would, indeed, be the result if the condition was a substantive one and one fundamental to the policy underlying the exemption. Its stringency and mandatory nature must be justified by the purpose intended to be served. There mere fact that it is statutory does not matter one way or the other. There are conditions and conditions. Some may be substantive, mandatory and based on considerations of policy and some others may merely belong to be area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve" Several other case law were cited which had laid down than an exemption notification should not be construed in a manner that defeated the purpose of the notification. It was also claimed that though construction materials had been purchased in the name of M/s. Methodist Engineering Co. Pvt. Ltd., Cuddalore, they had been engaged by CASA to construct houses for tsunami victims and the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on certificate from the District Collector. He relied on CBEC's letter issued in F.No.101/01/2008-CX.3 dt. 30.1.07. The Circular had clarified that clause 3 (e) of the Notification provided that refund should be given only to the concerned approved construction agency; the notification did not state that duty paying documents should be in the name of the said construction agency; the crucial aspects were that the goods should have been used for the intended purpose and that duty had been paid. As regards unjust enrichment, vide para 3 of Circular No.682/73/2002-CX. dt. 19.12.02, the CBEC had clarified that the refund envisaged in the notifications (the notification No. 56/02-CE and 57/02-CE both dated 14.11.02 not mentioned in the impugned order) was not on account of any excess payment of excise duty by the manufacturer but was basically designed to give effect to the exemption. In other words, the mechanism had been adopted to operationalize the exemption envisaged in those two notifications. The provisions of Section 11B of the Act did not apply in the case of these notifications. These instructions were reiterated in Circular No.701/17/2003-CX. dt. 12.3.03. he held that Rule 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive of the purposes they were intended to serve." By enforcing the subject limitation to claim refund, the policy of the government will be defeated. Notification was introduced to effectuate the Government's policy. The authorities are expected to take implemental action which subserves the policy and object of the notification. In this view of the matter we observe that the appeals of Revenue find basis in an imagined lis. We hold that the limitation prescribed in the notification cannot be enforced so as to deny the benefit of the notification. Liability of the State to return the tax collected in terms of a notification cannot subsist for an indefinite period. The claims therefore have to be made within the limitation prescribed in the Act. We therefore direct that the refund claimed shall not be denied on the ground of limitation if they were filed within the time limit prescribed in Section 11B of the Act. 7.1 We note that the points in dispute are the admissibility to refund claimed beyond the time limit prescribed in the subject notification; applicability of the vice of unjust enrichment in grant of refunds to the claimants and if refund could be allowed in case the d ..... 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