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TMI Blog2015 (10) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... be subject to such conditions or limitations, if any, and fulfilment of such procedure as may be specified in the notification. Under rule 18, therefore, a party is entitled to the rebate subject to such conditions or limitations as may be specified in the notification. In respect of grant of rebate, it is open to the Central Government to impose conditions or limitations including as to the period within which the rebate ought to be claimed. The rule is wide enough to authorise the Central Government to impose a condition or limitation stipulating the period within which the facility granted, namely, rebate is to be claimed. The language is wide enough in this regard. Petitioner's claim for refund would be governed by rule 18 of the Central Excise Rules, 2002 read with the notification issued thereunder. The said notification does not provide any period of limitation for a claim for rebate. The rejection of the petitioner's claim for rebate, therefore, is not well founded. - impugned order dated 26.05.2014 of the Commissioner of Central Excise (Appeals) is quashed and set aside - Decided in favour of assessee. - Civil Writ Petition No.16018 of 2014 (O&M) - - - Dated:- 4-8-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not pay the amount specified in the notice; .. . (3) Where the Central Excise Officer is of the opinion that the amount paid under clause (b) of sub section (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of one year shall be computed from the date of receipt of information under sub-section (2). (4) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by the reason of- (a) fraud; or (b) collusion; or (c) any wilful misstatement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by any person chargeable with the duty, the Central Excise Officer shall, within five years from the relevant date, serve notice on such person requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be deemed to be service of notice on such person under the aforesaid sub-section (1) or sub-section (3) or sub-section (4) or sub-section (5), subject to the condition that the grounds relied upon for the subsequent period are the same as are mentioned in the earlier notice or notices. (8) Where the service of notice is stayed by an order of a court or tribunal, the period of such stay shall be excluded in computing the period of one year referred to in clause (a) of sub-section (1) or five years referred to in sub-section (4) or sub-section (5), as the case may be. (9) Where any appellate authority or tribunal or court concludes that the notice issued under sub-section (4) is not sustainable for the reason that the charges of fraud or collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty has not been established against the person to whom the notice was issued, the Central Excise Officer shall determine the duty of excise payable by such person for the period of one year, deeming as if the notice were issued under clause (a) of sub-section (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return is required to be filed under this Act and the rules made thereunder; (ii) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid and the return has been filed on due date, the date on which such return has been filed; (iii) in any other case, the date on which duty of excise is required to be paid under this Act or the rules made thereunder; (iv) in a case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (v) in the case of excisable goods on which duty of excise has been erroneously refunded, the date of such refund; (c) specified records means records including computerised records maintained by the person chargeable with the duty in accordance with any law for the time being in force.'. Explanation 2. - For the removal of doubts, it is hereby declared that any non-levy, short-levy, non-payment, short-payment or erroneous refund before the date on which the Finance Bill, 2011 receives the assent of the President, shall continue to be governed by the provisions of Section 11-A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facturer, if he had not passed on the incidence of such duty to any other person; (e) the duty of excise borne by the buyer, if he had not passed on the incidence of such duty to any other person; (f) the duty of excise borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify: Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of duty has not been passed on by the persons concerned to any other person. (3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2). (4) Every notification under clause (f) of the first proviso to sub-section (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its reassembly, and the Central Government shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period but before the expiry of that period such rate is reduced, the date of such reduction; (e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person; (ea) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of Section 5-A, the date of issue of such order; (eb) in case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction; (f) in any other case, the date of payment of duty.' (Emphasis Supplied) 5. Rule 18 of the Central Excise Rules, 2002 reads as under:- Rule 18: Rebate of duty. - Where any goods are exported, the Central Government may, by Notification, grant rebate of duty paid on such excisable goods or duty paid on ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er submitted that the period of limitation prescribed in Section 11-A does not operate in respect of a claim for rebate made by an assessee in respect of a claim prescribed by a notification under rule 18. His reliance upon the judgment of the Supreme Court in Collector of Central Excise v. Raghuvar (India) Ltd. [2000] 5 SCC 299 is well founded. In that case, the respondents filed the declaration under Rule 57-G of the Central Excise Rules, 1944, for adoption of MODVAT Credit in respect of certain inputs used by them. The authorities, contending that the respondents had wrongly availed credit, debited the same. A notice was also served upon the respondents to show cause why a certain amount should not be recovered from them under Section 11-A of the Act, as the respondents were not entitled to take credit for a certain period. The respondents raised the plea of limitation contending that the notice had not been issued within the period of six months stipulated in Section 11-A. The plea of limitation was rejected. The Tribunal, however, held that the show cause notice was beyond the prescribed period of six months and that even the reversal of credit already taken was beyond the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision in the Act, even if the rules are silent on that aspect of the matter, it will have to be presumed that the provisions in the Act will govern the interpretation of the Rules and, therefore, the limitation in the Act will apply to cases of demand/recovery under Rule 57-J (sic 57-I), as it stood prior to amendment, particularly when there is nothing in Section 11-A which renders it inapplicable to cases provided under the MODVAT Scheme. This reasoning overlooks the position that the Rule in question was not enacted either under Section 11-A or to carry out the purposes of Section 11-A but actually in exercise of the rule- making power under Section 37, particularly sub-section (2)(xvia). A Division Bench of the Patna High Court, in the decision reported in TELCO case [(1999) 111 ELT 9 (Pat)] while following the view expressed by the Madras, Karnataka and Bombay High Courts disagreed with the view of the Gujarat High Court and held that when the limitation is provided for in the parent Act, it need not be provided for in the subordinate legislation, viz., the rules, and therefore the limitation prescribed in Section 11-A has to be read into Rule 57-I, unamended also. It was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y earned by or due to him. For this purpose, the irregularity and impropriety committed by the manufacturer in maintaining the accounts and the error in the calculation of the credit said to have been earned by him is pointed out, and the manufacturer is only directed to reverse the credit so wrongly and undeservedly made by readjustment and if need be, to recover the amount equivalent to such credit wrongly availed of and disallowed by the proper officer. The recovery of credit availed of and utilised in utter breach of the faith and mutual trust and confidence which is the raison d' tre for the proper and successful working of the MODVAT Scheme and that too in gross violation of the mandatory requirements necessarily to be fulfilled before ever claiming or availing of such benefits cannot be said to be the same as the demand for payment to be made under Section 11-A of the Act of any excise duty not levied or paid or which has been short-levied or short-paid. They fall into two distinct and different categories altogether with basic as well as substantial differences to distinguish them from each other. As a matter of fact, Rule 57-I envisages disallowance of the credit and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed above, we are of the view that the Gujarat view is more reasonable and quite in accord with the purpose, object, aim and successful implementation of the MODVAT Scheme and the fallacy in the line of reasoning adopted by the other decisions lie in their assumption that the period of limitation prescribed in Section 11-A of the Act has universal application to govern every act or course of action envisaged under the Act and the Rules, wherever there is no limitation stipulated to the contra. The restricted operation of the provisions contained in Section 11-A is found inherently inbuilt due to the specification of the various categories of cases enumerated in the provision itself to be dealt with. The Scheme of MODVAT, introduced for the first time in 1986, did not consider it necessary either to have its own period of limitation inbuilt in the Rules nor has the enforcement of the Scheme been made subject to Section 11-A of the Act. The fact that even when an amendment was made on 6-10-1988, it was prospective in nature and the amendment was not given any retrospective effect indicates the intention unmistakably that the subsequent amendment should have no impact on the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e specified in the notification. In respect of grant of rebate, it is open to the Central Government to impose conditions or limitations including as to the period within which the rebate ought to be claimed. The rule is wide enough to authorise the Central Government to impose a condition or limitation stipulating the period within which the facility granted, namely, rebate is to be claimed. The language is wide enough in this regard. 11. It is of vital importance to note that this is how the Central Government itself has already viewed the matter. Mr. Bansal, the learned counsel appearing on behalf of the petitioner, invited our attention to the fact that rule 12 of the Central Excise Rules, 1944, was similar to rule 18 of the Central Excise Rules, 2002. Rule 12(1) of the Central Excise Rules, 1944, reads as under:- 12. Rebate of duty. - (1) The Central Government may, from time to time, by notification in the Official Gazette, grant rebate of- (a) duty paid on the excisable goods; (b) duty paid on materials used in the manufacture of goods; If such goods are exported outside India or shipped as provision or stores for use on board a ship proceeding to a foreign p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, the amendment to rule 57-I had its own pattern of limitation and method of computation of limitation. The Supreme Court held that the same militated against the manner of construction adopted by the decisions of some of the High Courts which read into rule 57-I the limitation prescribed in Section 11-A. These observations clearly support Mr. Bansal's submission on a parity of reasoning. 14. A Division Bench of the Madras High Court in Dy. CCE v. Dorcas Market Makers (P.) Ltd 2015 (321) E.L.T. 45 (Mad.) dealt specifically with Section 11-B. In that case also the respondent had filed a claim for rebate under rule 18 of the Central Excise Rules, 2002, for refund of the duty paid for the exported goods. The claim was made beyond the period of one year. The department, contending that the rebate claimed was not within the period of one year prescribed in Section 11-B of the Act, rejected the claim. It was held following the above judgment of the Supreme Court that the period of limitation prescribed in Section 11-B cannot be imported into a scheme/notification under section 18. We are in respectful agreement with this observation. 15. It is held, therefore, that the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will have no application or operation to cases covered under Rule 57-I. The Supreme Court ruled that the situation on hand and the one which is to be dealt with under Rule 57-I as it stood prior to amendment, did not fall under any of those contingencies provided in Section 11A. 8. In contrast, in so far as Section 11B is concerned, the provision categorically comprehends a rebate of excise duty on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India. Since the statutory provision for refund in Section 11B brings within its purview, a rebate of excise duty on goods exported out of India or materials used in the manufacture of such goods, Rule 18 cannot be read independent of the requirement of limitation prescribed in Section 11B. The Judgment of the Supreme Court in Raghuvar dealt with a situation where Section 11A did not bring within its purview an action for the recovery of MODVAT credit wrongly availed of which formed the subject matter of Rule 57-I. It was in this view of the matter that the Supreme Court held that the period of limitation prescribed under Section 11A would not apply to an action f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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