TMI Blog2020 (5) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... for any reason, such adjustment is not possible, the manufacturer or the provider of output service would be entitled to seek refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification. To put it differently, in terms of Rule 5 of CENVAT Credit Rules, 2004 when a manufacturer is exporting the final product continuously without payment of duty, the CENVAT Credit on inputs-input services would be accumulating to his CENVAT Credit records. Such manufacturer would be entitled to utilize the CENVAT Credit either for payment of excise duty on final products cleared for home consumption or for export on payment of duty or for payment of service tax on output service. If these contingencies are not forthcoming for any reason, then manufacturer/output service provider can seek refund as provided under Rule 5 read with relevant or extant notifications so issued. The effect of the amendment of Section 11-B on 12-5-2000 is that all claims for rebate pending on this date would be governed by a period of one year from the date of shipment and not six months. This, however, is subject to the rider that the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JUSTICE E.S. INDIRESH JJ APPELLANT (BY SRI M.S. NAGARAJA, ADV A/W SMT.SHRUTI MATHEW, ADV) RESPONDENT (BY SRI JEEVAN J NEERALGI, ADVOCATE) JUDGMENT ARAVIND KUMAR J, CEA No.31/2017 came to be admitted on 08.08.2018. However, CEA Nos.32/2017 and 33/2017 were ordered to be posted along with CEA No.31/2017 since substantial questions of law had not been formulated. 2. We have heard the learned Advocates appearing for parties and formulated following substantial questions of law on 26.02.2020, which reads: (i) Whether under Rule 5 of CENVAT Credit Rules, 2004 prior to and from 01.04.2012 appellant would be entitled to seek refund without reference to the limitation? Or (ii) Whether the time prescribed under Section 11B of the Central Excise Act, 1944 would be applicable for claiming refund of CENVAT Credit? CEA No.35/2018 came to be admitted on 23.07.2019 to consider the substantial questions of law indicated thereunder. (i) Whether, the Tribunal is justified and correct in upholding rejection of the claims for refund of untilized Cenvat credit filed quarterly by the Appellant on 1.10.2013 for the period from July 2012 to Septem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is a 100% Export Oriented Unit holding Private Bonded Warehousing Licence. Appellant is availing CENVAT credit facility under CENVAT Credit Rules (CCR), 2004 (hereinafter referred to as CENVAT Rules ). Appellant filed three (3) refund claims under Rule 5 of CENVAT Rules for ₹ 92,478/-, ₹ 12,24,538/- and ₹ 5,18,920/- for the period April 2007 to June 2007; July 2007 to September 2007 and October 2007 to December 2007. The original authority by order dated 28.03.2013 rejected the claim on the ground it was time barred. Commissioner (Appeals) set aside the said order on the ground that limitation prescribed under Section 11B of the Central Excise Act, 1944 (for short Act ) does not apply for a accumulated Cenvat Credit. Revenue filed appeals before CESTAT and tribunal after considering the rival contentions by order dated 02.12.2016 has allowed the appeal of Revenue by setting aside the order of the appellate authority and restored the order of the original authority by opining that refund claim has to undergo the scrutiny of limitation provided under the Act and as such accepted the plea of the revenue. RE: CEA NO.35/2018: 4. Appellant having regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by arriving at a conclusion that relevant date should be the date on which the export of goods was made. Further appeal to the CESTAT was also rejected on the ground that time limit of one year from the date of export is applicable and the refund application filed was time barred namely, filed after one year. Hence, these appeals have been filed by the respective appellants. 6. We have heard the arguments of Sri.M.S.Nagaraj and Sri Dakshina Murthy, learned counsel appearing for the appellants in all these cases and Sri.Jeevan J Neeralgi, learned counsel appearing for the revenue. 7. It is the contention of Sri.M.S.Nagaraj, learned Advocate appearing for appellants that Rule 5 of the CENVAT Credit Rules do not prescribe any time limit for claiming refund and as such, Section 11B of the Central Excise Act, which prescribes a time limit of one year cannot be read into the said notification only on account of there being reference to it. He would also contend that appellants are entitled to seek refund without reference to limitation and undisputedly, appellants had unutilized CENVAT Credit and for various reasons same could not be utilized and appellants were entitled or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notification No.27/2012 dated 18.06.2012 which came to be issued whereunder the provisions of Section 11B of the Act has been made applicable mutatis mutandis insofar as refund claims are concerned and as such, it cannot be gainsaid by the appellants that refund claims filed beyond the period of limitation would be entitled for refund. RE: SUBSTANTIAL QUESTIONS OF LAW (i) Nos.(1) (2) in CEA Nos.31/2017, 32/2017 33/2017; (ii) Nos.(1), (3) (4) in CEA No.35/2018 (iii) No.(1) in CEA 25/2018 9. In all these appeals, the pivotal issue which arises for consideration would relate to refund claims made by the respective appellants under the CENVAT Credit Rules, 2004, post 31.03.2012 and for the earlier period also. Hence, Rule 5 of the CENVAT Credit Rules, 2004 which was in force up to 31.03.2012 and the Rules made from 01.04.2012 are extracted herein below: Rule 5 of the Cenvat Credit rules, 2004 from 1.4.2012 RULE 5. Refund of CENVAT credit. - Where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the interme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and input services by the manufacturer or the output service provider reduced by the amount reversed in terms of subrule (5C) of rule 3, during the relevant period; (C) Export turnover of goods means the value of final products and intermediate products cleared during the relevant period and exported without payment of Central Excise duty under bond or letter of undertaking; (D) Export turnover of services means the value of the export service calculated in the following manner, namely:- Export turnover of services = payments received during the relevant period for export services + export services whose provision has been completed for which payment had been received in advance in any period prior to the relevant period advances received for export services for which the provision of service has not been completed during the relevant period; (E) Total turnover means sum total of the value of (a) all excisable goods cleared during the relevant period including exempted goods, dutiable goods and excisable goods exported; (b) export turnover of services determined in terms of clause (D) of sub-rule (1) above and the value of all other servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt on payment of duty or for payment of service tax on output service. If these contingencies are not forthcoming for any reason, then manufacturer/output service provider can seek refund as provided under Rule 5 read with relevant or extant notifications so issued. 11. The Central Government in exercise of the power conferred by Rule 5 of Cenvat Credit Rules, has from time to time issued several notifications and it would suffice the notifications which would be relevant for the purposes of the present appeals only being noted. They are: (i) Notification No.5/2006 CE (NT) dated 14.3.2006; (ii) Notification No. 27/2012 CE (NT) dated 18.06.2012; and (iii) Notification No.14/2016 CE (NT) dated 1.3.2016. The above referred three notifications would clearly indicate that same has been issued by the Central Government in exercise of the powers conferred under Rule 5 of CENVAT Credit Rules, 2004. Refund of unutilized cenvat credit under Rule 5 is subject to the above notification and clause (6) of the notification dated 14.03.2006 which has bearing is extracted herein below: The application in Form A, along with the prescribed enclosures and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of limitation comes into force. A number of judgments of this Court have recognised the aforesaid proposition: 10.1. Thus, in S.S. Gadgil v. Lal and Co. [AIR 1965 SC 171] , this Court stated: (AIR p. 177, para 13) 13. As we have already pointed out, the right to commence a proceeding for assessment against the assessee as an agent of a non-resident party under the Income Tax Act before it was amended, ended on 31-3-1956. It is true that under the amending Act by Section 18 of the Finance Act, 1956, authority was conferred upon the Income Tax Officer to assess a person as an agent of a foreign party under Section 43 within two years from the end of the year of assessment. But authority of the Income Tax Officer under the Act before it was amended by the Finance Act of 1956 having already come to an end, the amending provision will not assist him to commence a proceeding even though at the date when he issued the notice it is within the period provided by that amending Act. This will be so, notwithstanding the fact that there has been no determinable point of time between the expiry of the time provided under the old Act and the commencement of the amending Act. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cause of action may have arisen before the new provisions came into force. However, it must be noted that there is an important exception to this rule also. Where the right of suit is barred under the law of limitation in force before the new provision came into operation and a vested right has accrued to another, the new provision cannot revive the barred right or take away the accrued vested right. 10.5. For the latest exposition of the same rule see Thirumalai Chemicals Ltd. v. Union of India [(2011) 6 SCC 739 : (2011) 3 SCC (Civ) 458] , SCC at para 29. 11. The effect of the amendment of Section 11-B on 12-5-2000 is that all claims for rebate pending on this date would be governed by a period of one year from the date of shipment and not six months. This, however, is subject to the rider that the claim for rebate should not be made beyond the original period of six months. On the facts of the present case, since the claims for rebate were made beyond the original period of six months, the respondents cannot avail of the extended period of one year on the subsequent amendment to Section 11-B. 12. The effect of Section 11-B, and in particular, applications for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duties imposed thereunder. Section 11- B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal-which is not a departmental organ-but to this Court, which is a civil court. (emphasis in original) From the law laid down by this decision it is clear that all claims for rebate/refund have to be made only under Section 11-B with one exception-where a statute is struck down as unconstitutional. Further, the limitation period of six months has to be strictly applied. Thus, the irresistible conclusion which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the taxable input services, received by it remained unutilized. Hence, appellant sought for refund of this unutilized input credit under Rule 5 of CENVAT Credit Rules, 2004 by submitting 16 refund claims. Said applications came to be rejected as not having been filed within the limitation prescribed under Section 11-B of the Central Excise Act. While answering substantial questions of law (1), (3) (4) herein above, we have already held that provisions of Section 11-B of Central Excise Act would be applicable though Section 11-B of the Act does not cover refund of Cenvat credit, notification No.5/2006 makes it explicitly clear that for the purpose of relevant date for computing one year prescribed under Section 11-B, it has to be determined by applying Rule 5 of Cenvat Credit Rules, 2004, necessarily the refund claims ought to have been filed within one year from the relevant date as specified in Section 11-B. In other words, time limit has to be computed from the last date of the last month of the quarter which would be the relevant date for the purposes of examining if the claim is filed within the limitation prescribed under Section 11-B or otherwise. The details of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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