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TMI Blog2007 (11) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... eal. For the sake of convenience, the parties to this appeal are referred to in the manner they were referred in the writ petition. 2. The material facts of the case proceed as follows : The writ petitioner, a company incorporated under the Companies Act, 1956 and holder of Central Excise Registration Certificate for the manufacture of Linear Alkyl Benzene (In short, referred to LAB hereinafter) falling under Chapter Heading No.3817.00 of the Central Excise Tariff Act, 1985. Kerosene from which paraffin was extracted, the main raw material for the manufacture of LAB was drawn from the adjacent Madras Refineries Ltd. (In short, hereinafter referred to as MRL) by pipe line transfer basis. The petitioner extracted paraffin from the kerosene supplied by MRL which in turn was used for the manufacture of LAB. The kerosene so received by the petitioner after being subjected to the process of hydro-generation for extraction of paraffin was returned to MRL through another pipe line. The kerosene received back by MRL was supplied to the Indian Oil Corporation under bond without payment of duty. IOC sold the kerosene so received on payment of duty at the price applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire quantity of kerosene received. In addition to the representation, the petitioner also filed a claim for refund to the Assistant Commissioner claiming refund of the amount of the excise duty paid by MRL the incidence of which has been passed on to the petitioner on the quantity of kerosene returned back to MRL. Having regard to the circumstances stated above and in particular the fact that the returned quantity of kerosene has ultimately been cleared on payment of appropriate duty by IOC, the Central Government got satisfied that the burden of excise duty on the returned quantity of kerosene has fallen on the petitioner which was much more than excise duty payable on the quantity of kerosene actually consumed by them. 5. Accordingly, having regard to the circumstances of the exceptional nature and in exercise of the power conferred by sub section (2) of section 5A of the Central Excise and Salt Act, 1944, the Central Government being satisfied that it was necessary in the public interest so to do, by an order, exempted the quantity of kerosene falling under the heading No.27.10 of the Schedule to the Central Excise and Tariff Act, 1985 supplied by MRL to the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant date under section 11B of the Act. On further appeal, the Commissioner of Central Excise by order dated 22.11.1995 confirmed the order of the Assistant Commissioner on the premise that the relevant date could only be the date of payment of duty in terms of sub-clause (f) of Explanation B to Section 11-B of the Act, which order was confirmed by the CEGAT by order dated 23.12.1997. 8. The petitioner not satisfied with the order of CEGAT made an application for reference of question of law to this Court in Reference Application No.46/1998 which has been dismissed on 03.06.1999. The petitioner filed writ petition No.5049 of 2000 challenging the order of the Assistant Commissioner confirmed by the appellate authority including that of the CEGAT non suiting the petitioner for refund for the month of March 1994 and writ petition No.5050 of 2000 against the rejection of the reference application by the CEGAT. 9. The learned single Judge by his order dated 20.11.2001 allowed the writ petition No.5049 of 2000 on the ground that only on 10.11.1994 the Government passed exemption order for the period from 01.03.1994 to 23.06.1994. Unless such exemption was granted the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unjust enrichment has no merit consideration. In the absence of any definition or clarification in respect of the term "relevant date" with reference to the special order issued under Section 5A(2) of the Act, the date of such order alone could be taken as relevant date. He further contended that clause (ea) in Explanation B to section 11B (5) is an affirmation of certain earlier Tribunal decisions which had held that the statutory limitation under Excise or Customs Act is not applicable to the special orders issued under section 25(2) of the Customs Act or Rule 8(2) or 5A(2) of the Central Excise Act. The amendment so incorporated is declaratory and explanatory and consequently retrospective and remedial. The insertion of clause (ea) to Explanation B of Section 11B(5) indicates the same and as such the same has to be regarded as curing of the obvious omission in the statute. Hence the petitioner could not be denied refund of duty for the month of March, 1994. Alternatively it was contended that the second proviso excludes the limitation of six months where any duty is paid under protest. After rescinding of the notification No.29/89 dated 01.03.1999, the petitioner address ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stomers. For the sake of convenience, the relevant portion is extracted below : "We enclose herewith the cost of production of LAB for your reference which shows that the incidence of duty has not been passed on to the customers." Thereupon, after consideration of all the details furnished by the petitioner, the Assistant Commissioner of Central Excise by his order dated 20.01.1995 has refused to grant the refund for the month of March 1994 on the ground that the claim for the said month was barred by limitation under section 11B of the Central Excise Act. On appeal, the Commissioner has set aside the order and remitted the matter back to the Assistant Commissioner on the premise that in the order, the Assistant Commissioner did not state as to how he considered the claim as time barred and what was the date which was taken as relevant date and whether the duty has been paid under protest or not. 15. The subsequent order of the Assistant Commissioner dated 5.9.1995 confirming his earlier order, the appellate order of the Commissioner dated 22.11.1995 and Tribunal order dated 23.12.1997 were all only concentrated on the point of limitation. Even before the learned singl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graph 3 of the order which reads thus: "Representations were received against the withdrawal of exemption. It was represented that in the absence of exemption contained in notification No.29/89-CE, Excise duty became leviable on the full quantity of kerosene supplied by MRL to TPL. On examining these representations and having regard to the difficulties faced by the concerned consumers the Government decided to restore the exemption. ...." Paragraph 4 of the adhoc exemption order proceed as follows: "It has, however, been represented to the Government that TPL became liable to bear the full incidence of excise duty on kerosene received during the interim period, namely, during the period from 01.03.1994 to 23.06.1994. It has also been represented that the returned kerosene in any case was cleared on payment of appropriate duty by Indian Oil Corporation. In the circumstances, the quantity of the returned kerosene became subjected to excise duty twice - once while received from MRL by the petitioner and again when cleared by the Indian Oil Corporation under Public Distribution System. " Paragraph 5 reads thus: "TPL has represented that they consumed only about 15% of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the question of limitation does not arise for refund of the duty." 20. The issue as to whether the non observance of the procedure as contemplated under Rule 233B can negate the claim of the petitioner for refund, has also been considered by a Division Bench of this Court in the case of CCE v. ITC Ltd. , 2005 (185) ELT 114 (Mad). The Division Bench, after taking into consideration paragraphs 93 and 94 of the decision of the Constitution Bench in the case of Mafatlal Industries Ltd. v. Union of India , 1997 (89) ELT 247 (SC) opined that those paragraphs did not help the department. The observation in that paragraph -"any person paying the duty under protest has to follow the procedure prescribed by the rule did not mean that Rule 233B could be construed in a narrow, pedantic or hyper technical manner. The Division Bench further opined that Rule 233B, as interpreted by the decision of the Supreme Court, referred to above, would only mean that substantially there has to be protest in writing. After extracting Rule 233B of the Central Excise Rules in paragraph 14 of the judgment the Division Bench has held that in the opinion of the Division Bench Rule 233-B could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said letter would give the impression that the Divisional Engineer was only lodging his protest against obtaining a licence. But, in our opinion, the said letter has to be read as a whole in the context in which the requirement for obtaining licence was being insisted, namely, that the goods manufactured at the Central Workshop were leviable to excise duty under Tariff Item 68, which liability was disputed by the Divisional Engineer. The letter of the Divisional Engineer dated 30-11-1976 must therefore be construed to mean that protest was lodged in the said letter both against obtaining the licence as well as against liability to payment of excise duty. In these circumstances we are unable to agree with the Tribunal that payment of duty was not made under protest. On that view of the matter the impugned judgment of the Tribunal cannot be upheld and has to be set aside." 22. If we apply the ratio of the above cases to the facts of the present case, particularly, the statements extracted supra from the exemption order, we are of the considered view that the payments were made only under protest. Borrowing the words of the Supreme Court, if these letters could not be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, it is only desirable that a litigant should not be shut out from raising such plea which goes to the root of the lis involved. The aforesaid view has been taken by the Supreme Court in a number of decisions, a few of which are A. St. Arunachalam Pillai v. Southern Roadways Ltd., AIR 1960 SC 1191; Cantonment Board, Ambala v. Pyarelal , AIR 1966 SC 108 and Rattan Lal Sharma v. Managing Committee, Dr Hari Ram (Co-Education) Higher Secondary School , AIR 1993 SC 2155 = (1993) 4 SCC 10. In a latest decision of the Supreme Court on this point it was held that a plea abandoned before a single Judge in a High Court could be raised before a Division Bench. Such plea is not barred by estoppel because the writ appeal is in continuation of the original order passed by the single Judge in writ jurisdiction., vide Bongaigaon Refinery P.C. Ltd. v. Girish Chandra Sarmah , (2007) 7 SCC 206 = 2007 AIR SCW 5185. Therefore, we are of the considered view that the payment of duty made by the petitioner in respect of the disputed period was made only under protest and as such the second proviso to Section 11B would definitely get attracted and on that score, the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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