TaxTMI 
TaxTMI 
2015 (10) TMI 1106
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.... with rule 5 of the Cenvat Credit Rules, 2004, it is entitled to export goods without payment of duty. The petitioner contends that an exporter has several options. The petitioner opted to pay duty on inputs and to export the goods on payment of duty and thereafter claimed a rebate of the duty paid in respect of the exported goods. 4. Section 11-B of the Central Excise Act, 1944, is relevant to this case. We will, however, be referring to a judgment of the Supreme Court in which Section 11-A fell for consideration also on the point of limitation. It will be convenient, therefore, to set out here Sections 11-A and 11-B of the Central Excise Act in so far as they are relevant: "11-A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,- (a) the Central Excise Officer shall, within one ....
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.... in part, as may be accepted by him along with the interest payable thereon under Section 11-AA and penalty equal to one per cent of such duty per month to be calculated from the month following the month in which such duty was payable, but not exceeding a maximum of twenty-five per cent of the duty, and inform the Central Excise Officer of such payment in writing. (7) The Central Excise Officer, on receipt of information under sub-section (6) shall- (i) not serve any notice in respect of the amount so paid and all proceedings in respect of the said duty shall be deemed to be concluded where it is found by the Central Excise Officer that the amount of duty, interest and penalty as provided under sub-section (6) has been fully paid; (ii) proceed for recovery of such amount, if found to be short-paid in the manner specified under sub-section (1) and the period of one year shall be computed from the date of receipt of such information. (7-A) Notwithstanding anything contained in sub-section (1) or sub-section (3) or sub-section (4) or sub-section (5), the Central Excise Officer may, serve, subsequent to any notice or notices served under any of those sub-sections, as the case ma....
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....unt the amount of duty of excise so modified. (13) Where the amount as modified by the appellate authority or tribunal or court is more than the amount determined under sub-section (10) by the Central Excise Officer, the time within which the interest or penalty is payable under this Act shall be counted from the date of the order of the appellate authority or tribunal or court in respect of such increased amount. (14) Where an order determining the duty of excise is passed by the Central Excise Officer under this section, the person liable to pay the said duty of excise shall pay the amount so determined along with the interest due on such amount whether or not the amount of interest is specified separately. (15) The provisions of sub-sections (1) to (14) shall apply, mutatis mutandis, to the recovery of interest where interest payable has not been paid or part paid or erroneously refunded. Explanation 1. - For the purposes of this section and Section 11-AC,- (a) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) "relevant date" means,- (i) in ....
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....cation shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) as substituted by that Act: Provided further that the limitation of one year shall not apply where any duty has been paid under protest. (2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund: Provided that the amount of duty of excise as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to- (a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) unspent advance deposits lying in balance in the applicant's account current maintaine....
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....cisable materials used in the manufacture of goods which are exported out of India; (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 the goods are exported by land, the date on which such goods pass the frontier, or (iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India; (b) in the case of goods returned for being remade, refined, reconditioned, or subjected to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid; (c) in the case of goods to which banderols are required to be affixed if removed for home consumption 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 ....
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....ade. Even more important is clause 3(b) of the notification which relates to presentation of claim for rebate to Central Excise. It reads as under:- "(b) Presentation of claim for rebate to Central Excise:- (i) Claim of the rebate of duty paid on all excisable goods shall be lodged along with original copy of the application to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, the Maritime Commissioner; (ii) The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, Maritime Commissioner of Central Excise shall compare the duplicate copy of the application received from the officer of customs with the original copy received from the exporter and with the triplicate copy received from the Central Excise Officer and if satisfied that the claim is in order, he shall sanction the rebate either in whole or in part." The remaining sub-clauses of clause 3 provide for detailed procedures with respect to claim of rebate by electronic declarat....
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....ntroduced to the Rule indicated the intention of the legislature to amend the Rule to bring it in conformity with the spirit and scope of Section 11-A. There is no rhyme or reasonable basis for such an assumption. The Division Bench of the Madras High Court, which decided the case in Advani Oerlikon Ltd. [(1993) 63 ELT 427 (Mad)] expressed the view that notwithstanding the omission in Rule 57-I prior to its amendment, to provide for the issue of a notice, the obligation to issue such notice followed from the principles of natural justice as well as Section 11-A of the Act and, therefore, the period of limitation in Section 11-A will be attracted to exercise the power of demand for reversing the credit wrongly availed of or utilised under the MODVAT Scheme. There is no justification in law to equate the notice expected to be issued to satisfy the principles of natural justice with the one ordained by the statutory provision to be issued within a stipulated time for one or the other of the purposes specified in such a provision, and that in order to suffer a limitation on the very exercise of the power. A Division Bench of the Bombay High Court also held in the decision reported in F....
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....s provision which provides any period of limitation for all or any and every kind of action to be taken under the Act or the Rules but will be attracted only to cases where any duty of excise has not been levied or paid or has been short-levied or short- paid or erroneously refunded. The section also provides for an extended period on certain contingencies and situations. The situation on hand and the one which has to be dealt with under Rule 57-I, as it stood unamended, does not fall under any one of those contingencies provided for in Section 11-A of the Act. Part AA of the Rules in which Rule 57-I is found included provides a special scheme for earning credit and adjustment of duty paid on excisable goods used as inputs in the manufacture of what is referred to as "final product", and thereby enable the manufacturer to utilise the credit so allowed towards payment of duty of excise leviable on the final products, in the manner and subject to the terms and conditions stipulated therein. The manufacturer, in this case while removing the final product manufactured has adjusted against payment of excise duty on such final product a part or portion of the credit earned by him under t....
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..... That apart, even if it is to be assumed that they relate to one and the same nature of demand from the manufacturer of any amount due from him to the State, the provisions contained in Section 11-A are general in nature and application and the MODVAT Scheme being a specific and special beneficial scheme, with self-contained procedure, manner and method for its implementation, providing for its own remedies to undo any mischief committed by the manufacturer in abuse thereof, the provisions of the said special scheme alone will govern such a situation and there is no scope for reading the stipulations contained in a general provision like Section 11-A into the provision of the Rules in question which alone will govern in its entirety the enforcement of the MODVAT Scheme. The question as to the relative nature of the provisions general or special has to be determined, as observed earlier, with reference to the area and extent of their application either generally in all circumstances or specially in particular situations and not on the ground that one is a mere provision in the Act and the other is a provision in the Rule. We are not also concerned in this case with any challenge to....
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....little later. We will assume, therefore, that the observations of the Supreme Court in paragraph-13 are not relevant to the present case. 9. In paragraphs 14 and 15, however, the matter was dealt with on a different basis. The Supreme Court held that even assuming that section 11-A and rule 57-I relate to one and the same nature of demand, the provisions contained in section 11-A are general in nature and application and the MODVAT Scheme being a specific and special beneficial scheme with a self-contained procedure, manner and method for its implementation providing for its own remedies, the provisions of the special scheme would govern a situation and that there was no scope for reading the stipulation in a general provision, namely, section 11-A into the provisions of the rules in question which alone would govern in its entirety the enforcement of the MODVAT Scheme. These observations would apply with equal force to the case before us. 10. Rule 18 of the Central Excise Rules, 2002, expressly provides that where any goods are exported the Central Government may by notification grant a rebate of the duty paid and that rebate shall be subject to such conditions or limitations, i....
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....rule (1) of rule 12 of the Central Excise Rules, 1944, the Central Government hereby directs that rebate of duty paid on the excisable goods as specified in the Table annexed hereto, shall on their exportation out of India to any country except Nepal and Bhutan, be made to the extent specified in column (3) thereof: Provided that - (i) to (iii) . . . . . . . . . . . . . . . . . . . (iv) the claim or, as the case may be, supplementary claim, for rebate of duty is lodged with the Maritime Collector of Central Excise or the Collector of warehouse, as mentioned in the relevant export documents; together with the proof of due exportation within the time limit specified in section 11B of the Central Excises and Salt Act, 1944 (1 of 1944);" (Emphasis supplied) 12. Thus, where the Central Government intended imposing a time limit in respect of a claim for rebate, it provided for the same in the notification issued under the rule i.e. rule 12 of the 1944 rules which corresponds to rule 18 of the Central Excise Rules, 2002. 13. Even in Raghuvar (India) Ltd. (supra), the Supreme Court noted that the claim of MODVAT introduced in 1986 did not consider it necessary to have any period of lim....
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....place reliance on a decision of the Supreme Court in Collector of Central Excise v. Raghuvar (India) Ltd. The issue which fell for determination before the Supreme Court, inter alia, was whether action for the recovery of MODVAT credit wrongly availed of or utilised in an irregular manner under Rule 57-I would be governed by the period of limitation of six months (at the relevant time) prescribed in Section 11A. The Supreme Court noted that Section 11A is not an omnibus provision which provides any period of limitation for all or any and every kind of action to be taken under the Act or the Rules but would be attracted only to cases where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded. The judgment of the Supreme Court holds that Rule 57-I envisages disallowance of the credit and consequential adjustment in the credit account or the account current maintained by the manufacturer and it is only if such adjustments are not possible, that an amount equivalent to the credit illegally availed of could be recovered. Consequently Rule 57-I, it was held, could not involve a case of manufacture and removal of excisable goods wit....