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The Deputy Commissioner of Central Excise Versus M/s. Dorcas Market Makers Pvt. Ltd., The Commissioner of Central Excise (Appeals)

2015 (4) TMI 118 - MADRAS HIGH COURT

Denial of refund claim - rebate under Rule 18 of Central Excise Rules 2002 - Bar of limitation - Held that:- The rebate of duty under Rule 18 should be as per the notification issued by the Central Government. The Notification bearing No.19/2004 dated 6.9.2004 prescribes the conditions, limitations and procedures for considering the claim for refund. Under Clause 2(d) of the notification, the rebate claim may be allowed from such place of export and such date, as may be specified by the Board, b .....

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ision taken by the Central Government and hence, the view taken by the learned Judge is fair and reasonable.

Therefore, the understanding of the Ministry of Finance itself is quite different from what the appellant now contends. Moreover, the Department, many a times, invokes the theory of unjust enrichment. This is seen even from para 6 of the Circular of the Ministry dated 28.4.2004. In the case on hand, there is no dispute about the fact that the first respondent actually exported .....

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f 2012 - Dated:- 26-3-2015 - V. Ramasubramanian And P. R. Shivakumar,JJ. For the Appellant : Mr. P. Mahadevan, SCGSC For the Respondent : Mr. Joseph Prabakar JUDGMENT V.Ramasubramanian,J The Department of Central Excise has come up with the above writ appeal, challenging an order of the learned Judge allowing a claim for refund made by the first respondent herein. 2. We have heard Mr.P.Mahadevan, learned Senior Central Government Standing Counsel appearing for the appellant and Mr.Joseph Prabaka .....

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tending that the rebate claim was not within the period of one year as prescribed in Section 11B of the Central Excise Act, 1994, the Assistant Commissioner of the concerned jurisdiction issued a show cause notice dated 24.6.2008, proposing to reject the claim. The first respondent submitted a reply on 24.7.2008, contending interalia: (1) that the company faced severe labour unrest, leaving certain items of work unattended; (2) that the factum of exports as per ARE-1 is clearly borne out by reco .....

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m for condonation of delay. 6. Aggrieved by the said order, the first respondent filed a writ petition in W.P.No.26236 of 2010. It was allowed by a learned Judge by an order dated 23.12.2011, on the ground that Rule 18 is self contained and that therefore, the claim cannot be held to be barred by limitation. Aggrieved by the said order, the Department is on appeal. 7. The main plank of the argument of Mr.P.Mahadevan, learned Senior Central Government Standing Counsel is that as per sub-section ( .....

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ntral Government Standing Counsel also invited our attention to: (1) the decision of the Supreme Court in Collector of Central Excise, Jaipur vs. Raghuvar (India) Limited [2000 (5) SCC 299], (2) the decision of a Division Bench of the Gujarat High Court in Ashwin Fasteners of Ashwin Panchal vs. Union of India [2010 (258) E.L.T. 174 (Guj.)], (3) the decision of the Division Bench of the Bombay High Court in Everest Flavours Limited vs. The Union of India [2012 TIOL-285-HC(MUM), and (4) the decisi .....

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efund always incorporate separate provisions prescribing a period of limitation and that therefore, the Rules were construed to be self contained. The learned counsel drew our attention to Section 27(1) of the Customs Act, 1962 which stipulates a period of 6 months, in contrast to which, the notification prescribed a period of one year. He also invited our attention to the notification dated 14.9.2007 as it originally stood and the subsequent notification. 10. We have carefully considered the ri .....

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itlement of a person to seek refund, sub-section (2) outlines the power of the Assistant Commissioner to pass an order, determining the amount to be refunded and further directing that the amount so determined shall be credited to the Fund. Interestingly, sub-section (3) declares that 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 the Act or the Rules or any other law for the time .....

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e power of the Central Government to rescind or modify any notification. In the Explanation to sub-section (5) of Section 11B, the expression "refund" and "relevant date" are defined. It is by virtue of the definition of the expression "refund" appearing in Clause (A) of the Explanation under sub-section (5) that even a rebate of duty is included within the meaning of the expression "refund". Similarly, the starting point for the period of limitation as pr .....

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ly by Section 12 and the entitlement to rebate would arise only out of a notification under Section 12(1). The definition of the expression "relevant date" under sub-section (5) of Section 11B does not take care of this contingency. 14. There is yet another paradox. As we have pointed out earlier, sub-section (3) of Section 11B contains a non-obstante Clause which excludes any judgment, decree or order of any Court or Tribunal. But, the definition of the expression "relevant date& .....

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on 11B which stipulates the period of one year for filing a claim. 15. Therefore, we are of the considered opinion that the view taken by the learned Judge that Rule 18 is to be construed independently, cannot be said to be wrong. Rule 18 of the Central Excise Rules,2002, by itself does not stipulate a period of limitation. Rule 18 reads as follows:- "Rule 18. Rebate of duty:- Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisa .....

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should be as per the notification issued by the Central Government. The Notification bearing No.19/2004 dated 6.9.2004 prescribes the conditions, limitations and procedures for considering the claim for refund. Under Clause 2(d) of the notification, the rebate claim may be allowed from such place of export and such date, as may be specified by the Board, by filing electronic declaration. This Notification dated 6.9.2004 superseded the previous notification bearing No.41/1994 dated 12.9.1994. At .....

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e learned Senior Central Government Standing Counsel, it is seen that the decision of the Supreme Court in Collector of Central Excise vs. Raghuvar (India) Limited, arose out of the rules relating to MODVAT Credit. The Assessee, who was entitled to avail duty credit only from 10.03.1997, availed it even from 01.03.1997. Hence, a show cause notice under Section 11-A of the Act read with Rule 57-I of the Central Excise Rules, was issued. But it was issued beyond the period of six months. Therefore .....

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so stipulated, has the consequence of creation and destruction of rights and therefore, must be specifically enacted and prescribed therefor. 18. But, in the very same decision, the Supreme Court pointed out that even Section 11-A of the Act is not an omnibus provision and that the situation contemplated under Rule 57-I, as it stood unamended, did not fall under any of the contingencies provided for in Section 11-A of the Act. 19. As a matter of fact, the Supreme Court observed that there is a .....

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Division Bench of the Gujarat High Court in Ashwin Fasteners, the Division Bench proceeded primarily on the basis of the observations of the Supreme Court in Mafatlal Industries Limited vs. Union of India [1997 (5) SCC 536]. The Division Bench did not go deep into the scheme of Section 11-B and the notifications issued under Rule 18, both in 1994 and in 2004. Therefore, with great respect we are unable to agree with the decision of the Gujarat High Court. 21. In Everest Flavours Limited, the Di .....

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on for refund. That argument was rightly rejected by the Bombay High Court as far-fetched. But, the Bombay High Court did not take note of the differences between the notifications issued in 1994 and 2004 to see whether the Government intended the Rules to be self contained or not. Therefore, we are unable to agree with the conclusion reached by the Bombay High Court. 22. The decision of the Division Bench of the Karnataka High Court in MCI Leasing (P) Ltd., proceeds primarily on the basis of th .....

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) the enabling provision under sub-section (1) for filing an application for refund; (B) the power conferred under sub-section (2) upon the Assistant Commissioner to order refund; (C) the non-obstante Clause contained in sub-section (3) only with reference to sub-section (2); (D) the definition of the expression "refund" in Clause (A) of the Explanation under sub-section (5) that includes rebate within the meaning of the expression "refund"; and (E) the separate provision for .....

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er before the expiry of one year from the date of any import or before the expiry of six months in any other case. But, in Notification No.102/2007-Cus. dated 14.9.2007, issued by the Central Government in exercise of the powers conferred by Section 25(1), no period of limitation was fixed in para 2(c) for the importer to file a claim for refund of the additional duty paid on imported goods. However, the said notification was later amended by Notification No.93/2008-Cus. dated 1.8.2008, incorpor .....

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riods of limitation. Section 27(1) reads as follows:- "27. Claim for refund of duty (1) Any person claiming refund of any duty and interest, if any, paid on such duty:- (a) paid by him in pursuance of an order of assessment; or (b) borne by him, may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Customs or Deputy Commissioner of Customs:- (a) in the case of any import made by any individual for his personal use or by Gove .....

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the amount of duty and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person;" 28. In the Notification dated 14.9.2007, paragraph 2(c) reads as follows:- "2. The exemption contained in this notification shall be given effect if the following conditions are fulfilled: (a) ........... (b) ........... (c) th .....

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