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2015 (9) TMI 774 - MADRAS HIGH COURT

2015 (9) TMI 774 - MADRAS HIGH COURT - 2015 (324) E.L.T. 270 (Mad.) - Denial of refund claim - non-exercising of discretion by the commissioner - returned goods were subjected to a further process of reconditioning or remake - whether the period of one year stipulated under the proviso (i) is in conflict with the prescription contained in Section 11B or whether Rule 173L merely aids the implementation of the prescription under Section 11B with additional conditions - Held that:- Rule 173L(1) sta .....

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cement of the period of limitation, the rules cannot prescribe over a different period of limitation or a different date for commencement of the period of limitation. In this case, sub-section (1) of Section 11B stipulates a period of limitation of six months only from the relevant date. The expression relevant date is also defined in Explanation (B)(b) to mean the date of entry into the factory for the purpose of remake, refinement or reconditioning. Therefore, it is clear that Section 11B pres .....

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the Commissioner has the power and discretion under proviso (i) to Rule 173L to entertain an application within a total period of two years. This is a case where the Commissioner should have at least exercised the said discretion in favour of the assessee. - Decided in favour of assessee. - C. M. A. No. 290 of 2010 - Dated:- 7-9-2015 - V. Ramasubramanian And T. Mathivanan, JJ. For the Appellant : Mr. P. R. Renganath For the Respondents : Mr. A. P. Srinivas Senior Panel Counsel for R2 to R4 JUDGM .....

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idering the settled legal position that once duty had been paid for the same goods twice, the payment of duty for the second time will be available as refund, as there is no authority under the Central Excise Act, 1994 to collect duty twice for the same goods? (2) Whether or not the Tribunal failed to appreciate that Section 11 B of the Act would only prescribe one year from the date of payment of excess duty as the time limit for filing refund and in this view the procedure under rule 173L of C .....

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nd time for the same goods? 4. Before we take up the questions of law for consideration, it may be necessary to record certain bare essential facts. They are:- (a) The appellant which is engaged in the manufacture of fuel injection pumps falling under CSH 8413.80, cleared a particular quantity of manufactured goods on payment of duty on 30.6.97 under three different invoices. They were cleared for supply to a car manufacturing company by name Paul Peugeot Limited. (b) Unfortunately, out of 300 n .....

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ntimation on 16.4.99 with the jurisdictional Central Excise Officer. (d) Thereafter the appellant subjected the fuel injection pumps to a further process of manufacture and supplied them to another company by name M/s TELCO. The sale and supply were made under the invoice dated 11.10.99. After selling the returned goods to a different customer under the invoice dated 11.10.99, the appellant made a refund claim for ₹ 4,63,783/- on 14.10.99. (e) All the three authorities rejected the claim f .....

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prescribed. The expression relevant date is explained in Explanation (B). Explanation (B) reads as follows:- (B) relevant date means,- (a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods,- (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or (ii) if th .....

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umption but not so required when exported outside India, if returned to a factory after having been removed from such factory for export out of India, the date of entry into the factory; (d) in a case where a manufacturer is required to pay a sum, for a certain period, on the basis of the rate fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the duty leviable on his production of certain goods, if after the manufacturer has made the p .....

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der, the date of adjustment of duty after the final assessment thereof; (f) in any other case, the date of payment of duty. 6. However, Rule 173L(1) states under proviso (i) that the claim for refund on returned goods may be admitted only if such goods had been returned to the factory within one year of the date of payment of duty or within such further period not exceeding one year in the aggregate. Sub-rule (1) of Rule 173L together with provisos thereunder is reproduced as follows:- Rule 173L .....

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in the aggregate, as the Commissioner may, on sufficient cause being shown, permit in any particular case; (ii)the assessee gives information of the re-entry of each consignment of such excisable goods into the factory to the proper officer in writing in the proper form within twenty-four hours of such re-entry or within such further period not exceeding ten days, as the Commissioner may, on sufficient cause being shown, permit in any particular case, to enable the proper officer to verify the .....

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being remade, refined, reconditioned or subjected to any other similar process in the factory: Provided further that in relation to the declared excisable goods, for clause (ii) of the first proviso, the following clause shall be substituted, namely:- ''(ii) the assessee gives information of the re-entry of each consignment of such excisable goods into the factory to the proper officer in writing in the proper form within twenty-four hours of such re-entry or within such further period n .....

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g or remake and they were sold to a different customer. Therefore, the only question that arises is as to whether the period of one year stipulated under the proviso (i) is in conflict with the prescription contained in Section 11B or whether Rule 173L merely aids the implementation of the prescription under Section 11B with additional conditions. 8. For examining the question, it has to be taken note of that if a substantial provision of the statutory enactment contains both the period of limit .....

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, it is clear that Section 11B prescribes not only a period of limitation, but also prescribes the date of commencement of the period of limitation. Once the statutory enactment prescribes something of this nature, the rules being a subordinate legislation cannot prescribe anything different from what is prescribed in the Act. In other words, the rules can occupy a field that is left unoccupied by the statute. The rules cannot occupy a field that is already occupied by the statute. 9. But, unfor .....

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he rules cannot prescribe a different date for the purpose to come and argue that both dates can co-exist together. That is not the manner in which a subordinate legislation can be understood. 10. But we are of the considered view that in this case, we are not even going to such an extent as to hold that there is a conflict and that the Act will have to prevail. There is no dispute on fact that at least within two years, which happens to be the extended period as per proviso (i) of sub-rule (1) .....

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