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TMI Blog2000 (4) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of six months as embodied in Section 11B(1) of the Central Excise Act, would be attracted if the claim is not filed by the purchaser within six months from the date of purchase and that the benefit of the second proviso to the said Section, which enacts that the period of limitation of six months will not be applicable where payment of any duty had been made under protest, is not applicable to his case. But the Double Member Bench of the Tribunal in Super Cassette Ltd. v. C.C.E., Meerut, 1999 (30) RLT 655 had taken the contrary view by holding that the refund claim filed by the purchaser after six months of the purchase of the goods, would not be hit by the bar of limitation under Section 11B(1) and the benefit of the second proviso to this section when the duty had been paid under protest, would be available to him. 2.The adjudication of the issue referred to the Larger Bench, depends on the interpretation of the provisions of Section 11B, as amended in 1991. Therefore, it would be convenient and beneficial to set out the same. The relevant provisions of this Section reads as under :- "SECTION 11B. Claim for refund of duty. - (1) Any person claiming refund of any duty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot apply where any duty has been paid under protest, and he is not under legal obligation to submit his claim for refund of the duty within six months, from the date of purchase. To substantiate his contention, the learned counsel has put forth three grounds. Firstly, after the purchase of the goods, the purchaser steps into the shoes of the manufacturer and is entitled to avail of the benefit of the limitation which was earlier available to the manufacturer before the sale of goods to him. Secondly, the refund claim of the purchaser, when filed within six months from the date of purchase would be thrown away summarily by the proper officer if by that time the protest lodged by the manufacturer while paying the duty remains undecided. Thirdly, the provisions of sub-clause (e) conferring right on the purchaser to claim refund of duty for having borne the burden of duty by virtue of purchase of the goods, would become redundant and the Government would be able to withhold the duty amount collected illegally if he is not allowed to take the benefit of the protest lodged by the manufacturer and bar of limitation of six months is invoked against him for rejecting his refund claim. 5.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -rule (5) or of the appeal or revision referred to in sub-rule (6) the assessee shall have no right to deposit the duty under protest. Provided that an assessee shall be allowed to deposit the duty under protest during the period available to him for filing an appeal or revision, as the case may be, and during the pendency of such appeal or revision, as the case may be. (8) If any of the provisions of this rule has not been observed, it shall be deemed that the assessee has paid the duty without protest. The procedure laid down in this rule is meant for the manufacturer which he is required to observe if he intends to pay duty at the time of clearing the goods from the factory, under protest. The dutyis never paid by the purchases under protest as he purchases the goods from the manufacturer on a price settled between the two and that price may be inclusive or exclusive of the duty paid by the manufacturer on the goods. Where the manufacturer makes payment of duty under protest being dissatisfied with the valution, classification made by the proper officer of his goods or for any other legitimate ground available to him under the Central Excise Act or the rules framed thereun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer if it reveals that he had passed on the incidence of the duty to the purchaser, then the purchaser's claim would be considered at that very time independently and he will be allowed the refund on his satisfying the condition before the competent autority that he had not passed on the burden of duty which he initially bore while purchasing the goods, to a third person. If he fails to prove this condition, his claim would also be hit by the doctrine of unjust enrichment. Therefore, filing of the refund claim by him for which the period has been specified has nothing to do with the final disposal of the protest claim of the manufacturer. If the purchaser was also intended to be given the benefit of the protest of the manufacturer, then the period for him for filing the claim would not have been stipulated from the date of purchase in sub-clause (e) referred above but from the date of the decision of the protest claim of the manufacturer. Having been not so provided bu the Legislature purposely it would not be legally justiciable for the Tribunal to so provide for the purchaser and to direct the proper officer to entertain his refund claim only after the decision of the prot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercised unjustly and enriching the person. The argument of the learned Counsel that if purchaser is denied the right to claim the refund after rejection of the protest of the manufacturer the Goverment would be enriched by retaining the money illegally collected and the object with which the sub-clause (e) in clause (B) of the Explanation under Section 11B, had been added for giving right to the purchaser to claim the refund of the duty in case the manufacturer was found to be not entitled, would stand defeated is also misconceived and cannot be accepted. In order to even prevent the Government from retaining the duty amount collected contrary to law, Sections 12C and 12D had been brought on the statute of the Excise Law. Section 12C clearly enacts that the Central Government shall establish a fund called the consumer welfare fund, while Section 12D lays down the manner of utilisation of that fund by the Government. Therefore, every care has been taken by the legislature for not allowing either party that is the Government or the assessee/manufacturer or purchaser, to have unwanted advantage over the other. 11.The purchaser simply by virtue of purchase of the goods does not acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim of the claimant after he succeeds in his litigation in the Courts if filed would be thrown out on the ground of having not been filed within six months from the date of payment of duty. This argument of the counsel was not accepted by the Apex Court and it was observed as under :- "We think that the entire edifice of this argument is erected upon an incomplete reading of Section 11B. The second proviso to Section 11B (as amended in 1991) expressly provides that the limitation of six months shall not apply where any duty has been paid under protest. Now where a person proposes to contest his liability by way of appeal, revision or in the higher courts, he would naturally pay the duty, whenever he does under protest. If one reads the seond proviso to sub-section (1) of Section 11B along with the definition of relevant date, there is no room for any apprehension of the kind expressed by the learned counsel". 13.The above referred observations of the Apex Court can be read with advantage only where the period of six months for the refund claim has to be reckoned from the date of payment under sub-clause (f) of clause (B) of the Explanation appended to sub-section (1) of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad paid duty under protest was entitled to the claim for refund of duty and whether the time limit of six months for filing the claim in terms of the definition of 'relevant date' in sub-clause (e) of clause (B) of Explanation to Section 11B of the Central Excise Act, 1944 applies to such cases. 17.For a proper understanding of the legal position, it would be necessary to examine the provisions of Section 11B. 18.The relevant portions of Section 11B are extracted below : 'SECTION 11B. Claim for refund of duty. - (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central Excise or Deputy Comissioner of Central Excise before the expiry of six months from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in Section 12A) as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from, or paid by him and the incidence of such duty had not been passed on by him to any other person : Provided that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the condition that he makes an application for refund of such duty to the proper officer before the expiry of six months from the relevant date in the manner prescribed and on an application accompanied by documents to show that the applicant has not passed on the incidence of such duty to another person. This is further circumscribed by the two provisos to sub-section (1). The second proviso which is the relevant proviso for the present discussion carves out an exception to the main opening portion of Section 11B(1), and says that the limitation of six months for claiming refund shall not apply where any duty has been paid under protest. In other words, the second proviso by saying that the limitation of six months will not apply "where any duty has been paid under protest" makes the condition of filing of application within six months as provided in the opening portion of Section 11B(1) inapplicable in cases where the duty has been paid under protest. The principle of non-applicability of the time limit when the payment of duty is made under protest is not reined in by any qualification. The only condition that is required to be shown is the existence of a protest. Since Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that the claim for refund by the purchaser is subjected to the further condition of his satisfying the proper officer that the incidence of such duty has not been passed on by him to any other person cannot stand in the way of the right per se of the purchaser to make an application for refund in a case where the manufacturer has paid the duty under protest and the grounds of protest are upheld by the adjudicating authority and a refund becomes due to the manufacturer. This does not of course absolve such purchaser from complying with the further condition of satisfying the proper authority that he has not passed on the incidence of duty to the ultimate consumer. It will be wrong to construe that the requirement of satisfying the provision relating to unjust enrichment would deprive the locus standi of the purchaser to claim refund. The fact that the actual grant of refund will be subject to the further satisfaction of the authority concerned about passing on of duty liability to the ultimate consumer is no ground for not entertaining a refund claim even after six months in a case where the duty had been made under protest. This is further made clear in Paragraph 83 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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