TMI Blog1997 (7) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... riff at the material time filed a refund claim for an amount of Rs. 26,250/- (received in the AC's office on 11-4-1979) paid on first clearances of the value not exceeding Rs. 5 lakhs effected during the year 1978-79 on the ground that they were entitled to exemption on the basis of Notification No. 71/78-C.E., dated 1-3-1978 as amended by Notification 91/78-C.E., dated 16-3-1978. Notification 71/78 provided exemption from payment of duty on the first clearances of the value not exceeding Rs. 5 lakhs effected during the financial year, provided that the value of the specified goods cleared from the Unit during the preceding financial year had not exceeded Rs. 15 lakhs. Notification 71/78 laid down that in the case of a manufacturer who had not cleared any specified goods in the preceding financial year or had cleared any such goods for the first time on or after the first day of August in the preceding financial year, the exemption shall be applicable to such manufacturer subject to his filing a declaration with the Assistant Collector that the aggregate value of such goods cleared during the financial year is not likely to exceed Rs. 15 lakhs. The respondents filed declarations to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption in terms of the Notification in the classification list filed by them and that the claim for the period prior to 5-3-1985 was barred by limitation according to the provisions of Section 11B of the Central Excise Act, 1944. The Collector (Appeals) held that the assessment during the financial year is to be deemed as provisional assessment, accepting the assessee's contention that it is only at the close of the financial year that they would come to know for certain whether they exceeded or not exceeded the ceiling on clearance value for the current financial year and he, therefore, held that the claim for refund should be taken as having been filed within time and ordered sanctioning the refund claim if otherwise found to be due and admissible. The Revenue filed the above appeal in the Tribunal which noted the conflicting decisions of the various High Courts and of the Tribunal and referred the matter for constitution of a Larger Bench. 4. In both the appeals, we have heard Shri A.K. Agarwal, learned SDR and perused the records; no one appeared for the respondents in spite of notice. Shri V. Sridharan, learned Counsel ably assisted the Bench by placing all relevant case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n will commence from the last date of the year and allowed the refund claim. 6.1 On appeal by the Revenue, the Division Bench of the Kerala High Court in the judgment reported in 1983 (14) E.L.T. 2156 reversed the judgment of the Single Judge and held that : "there can be little doubt that the Rules which we have quoted place the period of a limitation of an application for refund in this case at a period of one year. The same is to start from the date of payment or adjustment of duty. Being a Rule or a provision providing for limitation in respect of claims for refund, considerations of hardship seem to be out of place although, if it is possible to give the rule a construction which would avoid hardship, we should gladly adopt the same. What is contended before us by Counsel for the respondent is that unless the view taken by the learned Judge is endorsed, the practical working of the Rule would cause hardship and result in injustice. It was pointed out that an application for refund of excise duty, can having regard to the terms of Ext. P1. Notification, be preferred only in respect of steel furniture whose total value does not exceed Rs . 50,000/- and that too, only if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of excise leviable thereon subject to the condition that the stampings and laminations cleared by the manufacturer during such financial year did not exceed 40 MTs. In that case, two financial years were involved i.e. 1974-75 and 1975-76. For the financial year 1974-75, the assessee had filed a refund claim for the first 18 MTs as during that year, production was 36 MTs. For the financial year 1975-76, as the assessees had produced less than 40 MTs of stampings and laminations, a refund claim for 20 MTs was filed. The refund claim in respect of the financial year 1974-75 was filed on 3-4-1975 and the claim in respect of the financial year 1975-76 was filed on 31-3-1976. Both the claims were rejected by the Central Excise authorities as barred by time under the provisions of Rule 11 of the Central Excise Rules, 1944. The High Court held as under : Para 3..... On a fair reading of the Notification, I am inclined to agree with the submission of the learned Counsel for the petitioner. Whether the production during a financial year would exceed 40 Metric Tonnes or not would be known only at the end of the financial year. It is only at the end of the financial year that the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees fifty thousand, cleared on or after the first day of April in any financial year by or on behalf of the manufacturer from one or more factories for home consumption from the whole of the duty of excise leviable thereon : Provided that : (1) this exemption shall not be applicable to such manufacturer whose value of steel furniture so cleared during such financial year exceeds Rs. two lakhs." The proviso contained in the aforesaid Notification makes it clear that in order to avail of the exemption contained in the said Notification the manufacturer should not have cleared the steel furniture exceeding Rs. 2,00,000/- during the financial year. The entitlement for the exemption in that case can only be determined at the end of the financial year. Hence, if the application for refund is made within a period of six months from the end of the financial year, the same would be well within the period of limitation. The Exemption Notifications in the instant case are, however, distinct. They give exemption in the case of first clearance of goods upto the aggregate value of Rs. 15,00,000/-. If the duty was paid at the time of clearance in respect of goods within the limit of Rs. 15, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of duty as provided in Rule 11, following the judgment of the Division Bench of the Kerala High Court (supra). In the subsequent decision of the Tribunal in the case of Collector of Central Excise, Kanpur v. Tin Can Manufacturers reported in 1995 (6) RLT 769, the majority view of the Tribunal is that the time limit for refund claim in such cases where the benefit of an exemption is available subject to a ceiling on value of clearances during a particular financial year is the close of the financial year. 8. We are concerned with the interpretation of Section 11B of the Central Excise Act, 1944 which is the relevant provision governing refunds. We find that while the expression "relevant date" has been defined differently for different situations, there is no specific definition of the said term to regulate refund claims filed invoking exemption Notifications granting exemption subject to the condition that the value of clearances of goods does not exceed specified value ceilings in a financial year. It has not been laid down that in such cases, "relevant date" will be the close of the financial year. The term relevant date has been defined in Explanation B under Section 11B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent arbitrary and may frequently lead to hardship; but there can be no doubt that, in construing provisions of limitation, equitable consideration are immaterial and irrelevant, and in applying them effect must be given to the strict grammatical meaning of the words used by them." 8.1 Reference may also be made to the decision of the Hon'ble Supreme Court in the case of J.K. Cotton Spinning and Weaving Mills v. Union of India reported in 1987 (32) E.L.T. 234 S.C. In that case, Notification 20/82-C.E., dated 20-2-1982 had amended Rules 9 and 49 of the Central Excise Rules by way of addition of explanation. Section 51(1) of the Finance Act, 1982 provided that the amendments made to Rules 9 and 49 by the aforesaid Notification shall be deemed to have and to have always had effect on and from the date on which the Central Excise Rules, 1944 came into force. Sub-section (2) of Section 51 of the Finance Act provided that any action or thing taken or done or purporting to have been taken or done before the 20th day of February, 1982 under the Central Excise Act and the Central Excise Rules, 1944 shall be deemed to be and to have always been, for all purposes, as validly and effecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation lead to some inconvenience and hard cases. The Court has held that the remedy for the legislature is to amend the law suitably and Courts can administer the laws as they find them and they are seldom required to be astute to defeat the law of limitation. As observed by the Division Bench of the Kerala High Court in the Pylunny case (supra) a manufacturer is under no disability to file a refund claim in respect of payment of duty for goods within the exempted limit where he cleared the goods on payment of duty. In the event of the value of goods cleared exceeding the overall maximum laid down in the Notification, it would be open to the Department to disallow such a refund claim. It is only the decision to allow or reject a claim that will require the correct position about the aggregate value of clearances being within the overall ceiling to be known and this will not be essential for filing the refund claim itself. Therefore, the argument against the interpretation that limitation will begin to run from the date of payment of duty does not hold good since an assessee has other means to protect his interests. 10. The question as to how the Tribunal should proceed in the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82) E.L.T. 512, it has been held that the decision of a particular High Court should certainly be followed by all authorities within the territorial jurisdiction of that High Court and that the authorities in another State are not bound to follow the views taken by a particular High Court in the absence of a decision by the jurisdictional High Court with regard to constitutionality of a provisions. The Tribunal has held that since the adjudication of vires of a provision of a statute or Notification is outside the jurisdiction of the Tribunal and the jurisdictional High Court i.e., the High Court having jurisdiction over the authority and the assessee, has not struck down the provision or Notification as ultra vires, the Tribunal has to follow the same and the assessee is entitled to take the stand that he is entitled to the benefit of the particular provision or Notification since the jurisdictional High Court has not struck it down, even though some other High Court may have done so. In case the conflict of decisions among High Courts does not relate to vires of any provision or Notification, it has been held that the Tribunal has to proceed in accordance with the decision in Atm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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