2015 (4) TMI 118 - HC - Central Excise

Court clarifies rebate claim assessment under Rule 18 separate from time limit; rejection as time-barred dismissed.

The court held that the rebate claim under Rule 18 should be assessed independently of the limitation period in Section 11B. Since the relevant ... 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, by filing electronic declaration. This Notification dated 6.9.2004 superseded the previous notification bearing No.41/1994 dated 12.9.1994. At the time when the 1994 notification was issued, the procedure for filing electronic declaration had not been made. Since everything was made manually at that time, the notification of the year 1994 prescribed a time limit for filing claim. But, the 2004 notification did not contain the prescription regarding limitation. This was a conscious decision 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 the goods. Their entitlement to refund is not at all in doubt. The factum of their having exported the goods is borne out by ARE-1 forms. After the advent of online filing of applications, it is very easy to check up whether the exports have taken place and whether duty had been paid or not. Therefore, in the absence of any prescription in the scheme, the rejection of the application for refund as time barred, is unjustified. - Decided against Revenue. Issues Involved:1. Timeliness of the rebate claim under Section 11B of the Central Excise Act, 1944.2. Applicability of Rule 18 of the Central Excise Rules, 2002.3. Interpretation of relevant notifications and their limitations.4. Department's historical treatment of limitation periods under Customs and Central Excise Acts.5. Judicial precedents and their applicability to the case.Issue-wise Detailed Analysis:1. Timeliness of the Rebate Claim:The primary issue is whether the rebate claim filed by the first respondent was within the statutory period prescribed under Section 11B of the Central Excise Act, 1944. The Department contended that the claim was time-barred as it was filed beyond the one-year period stipulated in Section 11B. The respondent argued that the delay was due to severe labor unrest and that the fact of export was clearly documented, hence the delay should not be held against them.2. Applicability of Rule 18 of the Central Excise Rules, 2002:The court examined whether Rule 18, which governs the rebate of duty, should be considered independently of Section 11B. Rule 18 does not specify a limitation period for filing a rebate claim. The learned Judge held that Rule 18 should be construed independently, and the absence of a limitation period in Rule 18 means that the claim cannot be barred by the limitation period prescribed in Section 11B.3. Interpretation of Relevant Notifications and Their Limitations:The court analyzed the notifications issued under Rule 18, particularly Notification No.19/2004 dated 6.9.2004, which did not prescribe a limitation period for filing a rebate claim. The court noted that the 2004 notification superseded the 1994 notification, which did contain a time limit. The absence of a time limit in the 2004 notification was seen as a conscious decision by the Central Government, indicating that the rebate claims under this notification should not be subject to the limitation period in Section 11B.4. Department's Historical Treatment of Limitation Periods:The respondent argued that the Department has historically not treated the limitation periods in the statute as sacrosanct, citing examples from the Customs Act, 1962. The court noted that the Ministry of Finance itself had issued a circular stating that the time limit prescribed in Section 27 of the Customs Act would not automatically apply to refund claims under certain notifications unless explicitly stated. This understanding supported the respondent's argument that the rebate claim should not be time-barred.5. Judicial Precedents and Their Applicability:The court reviewed several judicial precedents cited by both parties. The Supreme Court's decision in Collector of Central Excise vs. Raghuvar (India) Limited was distinguished as it dealt with MODVAT Credit and not rebate claims. The decisions of the Gujarat High Court, Bombay High Court, and Karnataka High Court were also analyzed. The court found that these decisions did not fully consider the scheme of Section 11B and the specific notifications under Rule 18. Consequently, the court did not agree with the conclusions reached in these cases.Conclusion:The court concluded that the rebate claim under Rule 18 should be considered independently of the limitation period in Section 11B. The absence of a limitation period in the relevant notification indicated that the claim should not be barred by the statutory period. The rejection of the rebate claim as time-barred was deemed unjustified, and the writ appeal was dismissed.