TMI Blog2003 (8) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 20th May, 1999 and 10th June, 1999 and filed refund claim along with supporting documents to substantiate their claim that subject goods were, in fact, manufactured in their factory. 4.The Deputy Commissioner of Central Excise (Refund), Mumbai issued show cause notice dated 7th March, 2001 to the petitioners calling upon them to show cause why the rebate claims in question should not be rejected as they were filed after expiry of the stipulated period of six months from the date of shipment resulting in contravention of provisions of Section 11B of the Act. The petitioners replied to the said show cause notice vide their letter dated 29th March, 2001 contending that since export of goods in question was not disputed nor there was any dispute regarding realisation of foreign exchange, the rebate being incentive to the exporters, their claim may not be denied on ground of delay which was not intentional. 5.The petitioners in support of their submission also relied upon subsequent amendment to Section 11B of the Act; whereby a period of limitation was extended from six months to one year from the date of shipment, to contend that their claims are well within the extended perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tried to rebut. The same can be categorised as under: Show cause notice was contrary to law and without jurisdiction. Provisions of Section 11B operates retrospectively or at any rate it has retroactive effect. Provisions of Section 6 of the General Clauses Act, 1897 has no application to the facts of the instant case. Show cause notice was contrary to law and without jurisdiction : 11. The petitioners submit that until the time that a show cause notice was issued by the Customs Department, there was no dispute between the petitioners and the said Department with regard to the petitioners' entitlement to rebate. The dispute arose only upon the issue of the show cause notice dated 7th March, 2001 and issue was, thereafter, joined with the petitioners putting in a reply on 27th March, 2001, contesting the show cause notice. It is thus submitted that the validity of the show cause notice ought to be judged by examining the law as it stood on the date of issue of the notice. On 7th March, 2001, Section 11B stood amended and rebate claim could be made within one year of the relevant date. According to the petitioners, undisputedly, the petitioners rebate claims filed on 28t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause of action for the petitioners had ceased with filing of the rebate claims. The subsequent amendment had nothing to do with the disposal of the rebate claims. In other words, any amendment subsequently made pending the disposal of application had no effect on pending applications. The contention of the Revenue thus is that a lis or dispute commenced the moment an application for rebate was filed, as such the provision of law holding field on the date of application would be relevant and not the date of issue of show cause notice. 14.In rejoinder, learned Counsel for the petitioners contended that lis or dispute commenced the moment rebate claim was filed is contrary to law. He pressed into service the Blacks Law Dictionary which defines the word "lis" mean "controversy or dispute; a suit or action at law". According to the petitioners, there was no "lis" when the application for rebate was filed inasmuch as at this stage the respondents had not asserted their position and had not adopted a stand hostile to the rebate application. As such the petitioners reiterated that the dispute arose only on 7th March, 2001 and, therefore, amended Section 11B of the Act would get attract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y much governed by the statutory provisions of limitations. Reliance in this behalf was placed on the judgment of the Apex Court in the case of Union of India v. Kirloskar Pneumatics Company Limited - 1996 (84) E.L.T. 401; wherein the Apex Court ruled that the authorities created under the Act are governed by the statutory provisions of limitations. 17.In the rejoinder, alternatively, the petitioners submit that even if newly inserted Section 11B providing for limitation of one year is to be treated as having prospective force, nevertheless, it has 'retroactive effect'. The provision does not affect in any way any substantive or vested right of the petitioners. The substantive right of the petitioners to claim rebate depends upon whether exports were effected, since there is no dispute regarding the petitioners entitlement on merits the petitioners are well within their right to contend that the substantive right to claim refund arose in their favour. The amendment without affecting the existing substantive right merely provides an expanded period for availing remedy. In other words, even if the amendment is held as not having retrospective effect, it is submitted that the amendm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (119) E.L.T. 257 (S.C.) = 2000 (2) SCC 536 and Shyam Sunder's case (supra) were pressed into service to support the petitioners submissions. In nutshell the submission is, the amended law expanded the window and procedure to obtain refund and, so long as the rebate application relating to shipments within one year from 12th May, 2000, such applications could not be rejected. 19.In reply to the above submissions, learned Counsel for the Revenue submitted that where any Central Act made after the commencement of the General Clauses Act repeals any enactment, then, unless different intention appears, the repeal shall not affect any right acquired under any enactment so repealed. He thus submits that so far as Revenue is concerned, the right to deny claim was accrued in favour of the Revenue and, therefore, the amended provision cannot be allowed to be pressed into service unless different intention appears. He submits that there is no intention in the amended Section so as to suggest any contrary intention. 20.The learned Counsel for the petitioners submitted that in the case of Mysore Rolling Mills Pvt. Ltd. (supra), the Apex Court considered an amendment to Rule 9 of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the petitioners while concluding his submissions contended that it is well-settled that the Court must avoid an interpretation that leads to, absurd consequences. Reliance is placed on Bhatia International v. Bulk Trading S.A. - 2002 (4) SCC 105. In his submission, the interpretation advanced by the respondents leads to absurdity. He submits that interpretation advanced by the petitioners is fair, certain and results in predictable consequences. He, further, submits that where two interpretations are possible, the interpretation in favour of the assessee should be preferred. He reiterates that assuming that two views on interpretation of amended Section 11B are possible, one favourable to the assessee should be preferred in the matter of taxation. He placed reliance on the judgment in the case of Sun Export Corporation v. Collector of Customs - 1997 (93) E.L.T. 641. Petitioners thus prayed for making rule absolute in terms of the prayer clauses of the petition. The issues 24. The basic issue raised in this petition is whether the right to claim rebate of duty under Rule 12 of the Excise Rules lapses if the application for rebate of duty is not made within the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Rules, 1944. Under Rule 11, the manufacturer who has paid excise duty in excess could claim refund of duty within the time prescribed therein. Under Rule 12, the manufacturer on export of excisable goods could claim rebate of duty subject to such conditions and limitations as may be prescribed in the notification issued under Rule 12. 29.With effect from 17th November, 1980, Sections 11A and 11B were inserted to the Act. Section 11A provides limitation for recovery of duties not collected or short collected by the Revenue. Section 11B deals with the limitation for claiming refund of duty and rebate of duty. 30.In this petition, we are concerned with the limitation for claiming rebate of duty. For the sake of convenience the relevant portions of Rule 12 and Section 11B (prior to amendment by Finance Act, 2000) are extracted herein-below :- "RULE 12. Rebate of duty. (1) The Central Government may, from time to time, by notification in the Official Gazette, grant rebate of - duty paid on the excisable(a). goods; duty paid on materials used in the(b) manufacture of goods; if such goods are exported outside India or shipped as provision or stores for use on board a shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive right to claim rebate of duty accrued under Rule 12. In other words, the limitation prescribed under Section 11B only deals with the procedural law and not the substantive law. 32.In present case, when the exports were made in the year 1999 the limitation for claiming rebate of duty under Section 11B was six months. Thus, for exports made on 20th May, 1999 and 10th June, 1999 the due date for application of rebate of duty was 20th November, 1999 and 10th December, 1999 respectively. However, both the applications were made belatedly on 28th December, 1999, as a result, the claims made by the petitioners were clearly time-barred. Section 11B was amended by Finance Act, 2000 with effect from 12th May, 2000, wherein the limitation for applying for refund of any duty was enlarged from 'six months' to 'one year'. Although the amendment came into force with effect from 12th May, 2000, the question is: whether that amendment will cover the past transactions so as to apply the extended period of limitation to the goods exported prior to 12th May, 2000? 33.We would now proceed to examine whether the provision of Section 11B is retrospective as urged by the learned Counsel for the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame subject the Court has to look, into the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. 34.In Maxwell on Interpretation of Statutes, 12th Edn, the statement of law in this regard is stated thus : "Perhaps no rule of construction is more firmly established than thus - 'that a retrospective operation is not to be given to a statute so as to impair an existing rights or obligation, otherwise than as regards matters of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. The rule has, in fact, two aspects, for it, involves another and subordinate rule, to the effect that a statute is not to be construed so as to have greater retrospective operation than its language renders necessary." 35The Apex. Court in the case of K. Eapen Chako v. The Provident Investment Company (P) Ltd. - AIR 1976 SC 2610 observed in Para 37 thus, - "A statute has to be looked into for the general scope and purview of the statute and at the remedy sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly - defined limits. Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature. Every litigant has a vested right in substantive law but no such right exists in procedural law. A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished. A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication." (Emphasis supplied) 38.In our view, in view of the settled legal position of law, the contention of the petitioners that the limitation for filing claim for rebate of duty prescribed under Section 11B is procedural and, therefore, the amendment t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esumption. It will operate prospectively because it will prescribe the manner in which something may or must be done in the future, even if what is to be done relates to, or is based upon, past events. A statute which prescribes the manner in which the trial of a past offence is to be conducted is one instance. But the difference between substantive law and procedure is often difficult to draw and statutes which are commonly classified as procedural - statutes of limitation, for example - may operate in such a way as to affect existing rights or obligations. When they operate in that way they are not merely procedural and they fall within the presumption against retrospective operation but when they deal only with procedure they are apt to be regarded as an exception to the rule and if their application is related to or based upon past events, they are said to be given a retrospective operation provided that they do not affect existing rights or obligations." (Emphasis supplied) 40.The Apex Court in the case of Kolhapur Canesugar Works Ltd. (supra) also noticed position of common law and observed as under : "At common law, the normal effect of repealing a statute or dealing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for rebate of duty is not made within the period of limitation. Thus the right to rebate of duty which flows from Rule 12 is not destroyed by failure to apply for rebate of duty within six months time prescribed under the statute. Thus Section 11B merely debars the remedy if the claim is not filed within the period of limitation set out therein. if there is alteration in the procedural law, there is no reason to presume that the amendment was not intended to apply retrospectively. In other words, where the amended statute alters the existing practice and procedure of enforcing the substantive rights, then the amended, procedure would apply for enforcement of the substantive rights existing on the date when the amended provisions came into force. Accordingly, we hold that the limitation of one year provided by amendment to Section 11B with effect from 12th May, 2000 would apply retrospectively and would cover exports made one year prior to 12th May, 2000. To put it differently the amended limitation of one year with effect from 12th May, 2000 would apply to all exports made after 12th May, 1999. In the present case, the exports were effected on 20th May, 1999 and 10th June, 1999 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) was concerned with amendment to Section 11A. Secondly, Section 11A deals with the right of the Revenue to initiate action for recovery of the excise duty nor levied or paid or short-levied or short-paid or erroneously refunded; whereas Section 11B deals with the claim for refund of duty. Thirdly, under Section 11A the right to recover duties not levied or not paid or short-levied or short-paid or erroneously refunded and the limitation to recover the same cannot be segregated; whereas the right to rebate of duty arises independently under Rule 12 of the Central Excise Rules and Section 11B prescribes only the limitation to claim rebate of duty. Therefore, we are of the opinion that the decision of the Apex Court in the case of Mysore Rolling Mills Pvt. Ltd. (supra) is distinguishable on facts. 44.At this stage, we think it would not be out of place to make reference to the judgment of the Apex Court in the case of Easland Combines (supra) on which heavy reliance was placed by the petitioners. It would not be out of place to mention that Section 11A deals with substantive right to recover short-levied or short-paid duty; whereas Section 11B deals with procedural law and any al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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