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TMI Blog2021 (4) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... orm. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India, denying the petitioner the rebate claim on the ground of limitation. 2. The facts shorn of the details are as follows: 2.1. The petitioner is engaged in manufacture and export of polyester chips and polyester yarn. An export order was received by the petitioner from M/s. Flex Middle-Easter FZE, Dubai for export of 160480 kgs of polyester chips Textile Grade-160 MTS (hereinafter to be referred to as the goods ) The petitioner manufactured the said goods from the factory located at village: Jolwa; Taluka Palsana, District: Surat and cleared the same with payment of Central Excise Duty. The petitioner cleared the said goods under the prescribed FORM ARE-1 along with all requisite documents and filed the shipping bills bearing No.8696246 dated 27.07.2010 by declaring the value of the said goods of ₹ 81,09,800/- from the port of Nav Sheva, JNPT at Raigadh. 2.2. The rebate of central excise duty paid on excisable goods is provided under Rule 18 of the Central Excise Rules, 2002. The Central Government, by notification, grants rebate paid on excisable goods, if any goods are exported, the same shall be subject to such conditions or limitations and fulfilment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent due to short shipment of the goods and, therefore, there was a delay in filing the rebate claim. 2.9. Vide order No.1750/11-12/Deputy Commissioner (Rebate)/Raigadh dated 11.01.2012, respondent no.2 rejected the rebate claim, essentially, on the point of limitation. He referred to the decisions of the Supreme Court and the High Court, to hold that unless the rebate claim is filed within one year from the date of export of goods, it is not entertainable. 2.10. Paragraphs No.2.4 of paragraph No.2 of Chapter IX of CBEC Manual 2010-11 provides that in case of non-availability of any document, due to any reason, for which the Central Excise and Customs Department would solely be accountable, the refund claim should be admitted, as the claimant cannot be in a disadvantageous position on account of limitation period, if the fault was not his. It is further the say of the respondent that there is no power conferred upon the Central Excise Officer to condone the delay. Aggrieved petitioner challenged it before the Commissioner (Appeals), where again emphasis was that there was no delay on the part of the petitioner to file a rebate claim, but due to non-availability of export promo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim along with interest; c) pending the hearing and final disposal of the Petition, this Hon'ble Court be pleased to direct the Respondents, by themselves, their servants and agents/officers/subordinates to sanction rebate claim with such surety and security as deemed fit by this Hon'ble Court. d) for ad-interim relief in terms of prayer (c) above; e) for costs of the Petition and orders thereon; and f) for such further and other reliefs, as this Hon'ble Court may deem fit and proper in the nature and circumstances of the case. 3. This Court has heard learned advocate Mr. Hardik Modh for the petitioner, who has urged that one of the two documents, which would be essential before the person who exported the goods to claim rebate from the respondent authority, are (1) the Export Promotion Copy or (2) the Shipment certificate. In the instant case, the event of export of the goods occurred on 02.08.2010 vide shipping bill no.8696246(dated 27.07.2010). He applied for the shipment certificate in less than a month. The Revenue issued the said certificate on 20.08.2011 and the rebate claim was filed by the petitioner on 11.10.2011. He has taken us t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of polyester chips etc Textile Grade-160 meters, which had been manufactured from the factory located at village: Jolwa; Taluka Palsana, District: Surat and the same had been cleared with the payment of Central Excise duty. Value of the said goods had been of ₹ 81,09,800/- which had been sent from the port of Nava Sheva, JNPT at Raigadh vide Shipping Bill bearing No.8696246 dated 27.07.2010. 8. For claiming any rebate of Central Excise duty paid in excisable goods, Rule 18 of the Central Excise Rules, 2002 is providing the grant of rebate of duty paid on excisable goods, subject to certain conditions or limitations and fulfillment of proceduralities. Rule under the head of rebate of duty deserves reproduction at this stage: 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 materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification. Explanation .- Export includes goods shipped as provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.19 of 2004: Central Excise (NT), particularly, 3(b)(i) shall be read as thus: 3(b) Presentation of claim for rebate to Central Excise:- (i) Claim of the rebate of duty paid on all excisable goods shll be lodged before the expiry of the period specified in Section 11B of the Central Excise Act, 1944 along with the original copy of the application to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, the Maritime Commissioner; 11. Thus, the Central Government has specifically provided by way of the amendment in the year 2016 from 01.03.2016 that the claim of rebate of duty paid on all excisable goods shall be lodged before the expiry of the period specified under section 11B of the Central Excise Act and the same shall be done along with the original copy of application to the Assistant Commissioner, Central Excise, having jurisdiction over the factory of manufacture or warehouse or before the Maritime Commissioner as the case may be. 11.1. It is also to be noted that for filing the rebate claim, there are certain documents, which are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jection has come on the ground that the claim under section 11B has become time barred as the same has been filed after the stipulated period of one year of the date of shipment. It also provides that quantity of 164000 kgs of goods mentioned in ARE-1 does not tally with the quantity of 4000 kgs mentioned in the Shipping Bill No.8712231 dated 30.07.2010 and assessable value of ₹ 8,10,980/- is more than FOB value of ₹ 1,96,420/- mentioned in the shipping bill. He further says that the proof of duty payment was not produced with the claim and the bank realization certificate is also not adduced. Hence, written reply was directed to be sent in 10 days' time from the date of receipt of this deficiency-cum-show cause notice call for personal hearing. The personal hearing was scheduled on 3rd, 4th 5th January, 2012 before the office of the Maritime Commissioner. 14.1. In answer to the same, on 29.12.2011, the petitioner made a mention of short shipment of four bags and reiterated that the Customs Department could not generate the export promotion copy. However, the release of Shipment Certificate was on 20.08.2011 to the CHA. Therefore, the request was made to condon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut from seller's place or warehouse. The Tribunal referred to Chapter XI of CBEC Manual 2001-02, which deals with refund, in case of non-availability of any document due to any reason, which the Central Excise or the Customs Department is solely accountable, the claim may be admitted so that the claimant is not in a disadvantageous position with respect to limitation period. It has been interpreted that the exporter should have filed rebate claim, as per the provisions of the CBEC Manual 2001-02 and in similar situation, the case of Exclusive Steel Pvt. Ltd. reported in 2011 (267) ELT 586 is referred to, where the Court has stated that even if the relevant documents are not available with the petitioner company, it could have filed the application without relevant documents, which the department was bound to receive so that the refund is not hit by limitation period. As the rebate claim is not filed within the period of one year along with available documents, which were already in his possession, relying on also the the decision of CESTAT in the case of Precision Controls vs. CCE Chennai, 2004(176) ELT 147(Tri-Chennai), it held that there is no discretion or equitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 of the Central Excise Rules, 2002 does not prescribe the period of limitation of one year and section 11B of the Central Excise Act, is not relevant for the rebate of duty is not a legally tenable proposition, since for the refund and rebates of duty, section 11B of the Central Excise Act is the statutory provision directly dealing with the issue. According to the Revisional Authority, in addition to the time limit set out under section 11B, there are other substantive and permanent provisions, which the authority has to deal with while considering the issue of refund or rebate claim. The principle of undue enrichment and method of payment of rebate of duty are also prescribed under section 11B only. It further held that Rule 18 is a piece of subordinate legislation made by the Central Government in exercise of powers given under the Central Excise Act. It further prescribes conditions and limitations for granting rebate of duty by issuing notification which by all means a subordinate legislation. The basic feature and condition already stipulated in section 11B in relation to the rebate of duty need not be repeated in the said rule and the areas, over and above already covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d others passed by this Court in Special Civil Application No. 10435 of 2018, which was a case of refund of predeposits with interest. The petitioner Ajni Interiors was a proprietorship concerned, which changed to Private Limited Company and functioned in the name and style of M/s.Ajni Interiors then, M/s.Ajni Clean Rooms Pvt. Ltd. (now known as, M/s.Ajni Industries Pvt. Ltd.).. On an intelligence received by the Head Quarter officer of the Preventive Section of the Excise Department that the petitioner was indulging in evasion of the Central Excise duty, the team of Central Excise Officers visited the premises and during the course of investigation, the petitioner deposited 15 lakhs. This difference in duty was on deposit and not on duty confirmed during the investigation. Thereafter, the show cause notice was issued for the recovery of the Central Excise duty with demand of interest and imposition of penalty. The Superintendent Central Excise and Customs (Range-III) directed the petitioner to pay further pre-deposit amount of ₹ 3,32,076/-, the same had been deposited and, accordingly, the total amount deposited was ₹ 18.32 lakhs (rounded off). 20.1. After the show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 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. The payments have been made in the nature of Central Excise duty. They were not considered akin to or in the nature of pre-deposit, as contemplated under section 35F of the Act, nor was there anything to indicate that the payment was made under protest and hence, the submission that second proviso of sub-section(1) of section 11B of the Act, which provides that limitation of one year was not applied, where duty and interest, if any, paid on such duty has been made under protest, the Court further held that the payments made by the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r claim for rebate and export under claim for refund respectively. Notification No.41 of 1994 is issued by the Central Government in exercise of powers conferred by Clause A of Sub-Rule 1 of Rule 12 of the Central Excise Rules 1994, which directs the rebate of duty paid on the excisable goods, as specified in table annexed and the same can be claimed on exportation of goods out of India and in any country, except Nepal and Bhutan to the exception specified in Column No.3. Proviso gives details as to when; (1) excisable goods shall be exported after payment of duty directly from a factory or warehouse and (2) when they are exported by the exporter in accordance with the procedure set out in Chapter IX of the Central Excise Rules, 1944, (3) they are to be exported within six months from the date on which they were cleared for export from the factory of manufacturer or warehouse or within such extended period, as the Collector of Central Excise may, in a particular case, allow; (4) the claim or the supplementary claim for rebate of duty is lodged with maritime Collector of Central Excise or Collector of Central Excise having jurisdiction of either the factory of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cifies that the term refund in section 11B of the Central Excise Act, includes rebate of duty of excise on excisable goods exported out of India or on excisable goods used in the manufacture of goods, which are exported out of India. Thus, the procedure prescribed and specified in the said rules and notification are made subject to section 11B of the Act. 29. It is needed to be noted that the procedure prescribes presentation of the refund claim, which states that any person, who deems himself entitled to refund of any duty or excise or other duties or he has been informed by the Department that the refund is due to him, shall present the claim in proper format along with all relevant documents supporting his claim and also the copies of documents supporting his declaration that he has not passed on duty in incidence. 30. Paragraph No.2.4 provides clearly and particularly that it may not be possible to scrutinize the claim without accompanying documents and decide about its admissibility. If the claim is filed without requisite document, it may lead to delay in sanctioning of the refund. Moreover, the claimant of refund becomes entitled for interest in case refund is not gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other than exporter]. 33. Thus, what makes it clear on reading the requirement of these paragraphs of CBEC Manual that they insist on specified documents, one of which is a shipping bill for the sanction of the claim for rebate. On overall reading of all these necessary conditions reveal that the incomplete claim would not be tenable as there is a specific emphasized for sanction of claim for rebate by the Central Excise Department. 34. It also provides for acceptance of application for rebate when requisite document is unavailable due to non-action or non-doing on the part of the department so that the interest may not need to be paid and the period of limitation does not affect adversely the party. Thus, self-attested copy of the shipping bill was unavailable, as there was a shortshipment to the extent of four begs in relation to the Shipping Bill No.8696246 dated 27.07.2010 and, therefore, the Customs authorities on a request had issued a shipment certificate on 20.08.2011. 35. Rule 18 speaks of rebate of duties for any goods exported by Notification of the Central Government for the duty paid on excisable goods or duty paid on material used in the manufacture for pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich includes rebate of duty) but such a claim has to be made before the expiry of one year from the relevant date. The application has to be in the form and manner as prescribed and the application shall be accompanied by such documentary or other evidence which will enable the applicant to establish that the amount of duty of excise in relation to which such refund/rebate is claimed was collected from, or paid by, the claimant and the incidence of such duty had not been passed on to any other person. In so far as the incidence of duty being passed over it is clear that the same is not required to be considered, as in relation to a claim for rebate, under the Proviso below sub-section (2) of section 11B of the Act vide clause (a) of the Proviso rebate of duty of excise on excisable goods exported out of India or inputs which have borne duty of excise having been used in manufacture of goods which are exported out of India the assessee becomes entitled, provided the application is in accordance with the prescription, viz. in form and manner and is accompanied by relevant documents. 10. In this context one has to keep in mind as to why the provision prescribes attachment of doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion with respect to limitation period. 13. It is the last sentence of the aforesaid sub-paragraph which has generated the present controversy. The case of the petitioner is that the said sentence viz. commencing with the words in case of nonavailability of any document and ending with the words with respect to limitation period indicates that the normal rule that a claim application should be accompanied by requisite documents within the period of limitation has been modified so as to ensure that an assessee is not put to disadvantage only because of lapse or laxity on part of the Officers of Central Excise Department or the Customs Department. On the other hand the principal thrust of respondent authority, based on interpretation of the very sentence, is that the said sentence stipulates an exception to the effect that where, in a case, the claim is not accompanied by documents, and such deficiency is on account of non supply of the requisite documents by the Officers of the Department a deficient claim has to be made within the period of limitation prescribed and such a claim shall be considered as and when the deficiency is removed by supplying relevant documents at a subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f requisite documents and such lapse is on account of nonavailability of such documents due to the department being solely accountable. In such circumstances, an assessee cannot be put to disadvantage by asking the assessee to tender a deficient claim within the period of limitation and simultaneously treat the claim as not having been filed till the point of time all relevant documents are available. 16. Aforesaid interpretation derives support from the earlier part of the same sub-paragraph wherein it is provided that if a claim is not processed and refund is not granted within a period of three months a claimant may become entitled to interest on the refund and hence, such incomplete claim will not be in the interest of the department. In fact, as noticed hereinbefore, submission of refund claim without supporting documents is prohibited. 17. There is one more aspect of the matter. Chapter 8 of the CBEC Manual is EXPORT UNDER CLAIM FOR REBATE. Paragraph No.8 of the said Chapter pertains to Sanction of claim for rebate by Central Excise. Sub-paragraph No.8.4 reads as under : S8.4. After satisfying himself that the goods cleared for export under the relevant A.R.E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to the object and purpose of the scheme. It cannot be held that the petitioner was at fault in making the claim belatedly, because in fact the period of limitation has to be considered in light of availability of the requisite documents i.e. from the said point of time. 21. The view adopted by the Revisional Authority that a departmental authority is bound by the prescribed period of limitation and cannot condone any delay also does not merit acceptance in light of what is stated hereinbefore. The Adjudicating Authority and the Revisional Authority have read the period of limitation divorced from sub-paragraph No.2.4 of the CBEC Manual which has provided for a circumstance to mitigate the unwarranted hardship resulting from reading the provision of limitation in absolute terms. In other words, howsoever limited, an exception has been carved out in cases where the delay has occurred due to circumstances beyond control of the claimant assessee. In other words, in a case where the so called delay is on account of the lapse on part of the Central Excise Department or the Customs Department. 22. It is necessary to state and clarify here that mitigating circumstance as flow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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