TaxTMI 
TaxTMI 
2016 (3) TMI 68
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....was classifiable under the sub-heading 2107.91 of the Tariff Act. 2. Because of the cavil relating to classification, steps were taken for recovery of the differential duty and keeping in view the demands made, the respondent-manufacturer started paying the duty as demanded by the concerned authority. Be it stated, the initial adjudicator, that is, the Assistant Commissioner of Central Excise, did not accept the stand of the assessee. The said grievance compelled the respondent to prefer an appeal before the Commissioner (Appeals) who negatived the stand of the assessee. Being grieved the assessee preferred an appeal before the Central, Excise and Service Tax Appellate Tribunal (for short, 'the tribunal'), which, agreed with the view expressed by the fora below and consequently dismissed the appeal. 3. The decision rendered by the tribunal, was called in question by the assessee in Civil Appeal No. 7766 of 1995. The two-Judge Bench in Hamdard (Wakf) Laboratories vs. Collector of Central Excise, Meerut (1999) 6 SCC 617 adverted to the issue of classification pertaining to the product, namely, Sharbat Rooh Afza and posed the question whether the said " Sharbat " was wit....
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.... 25th August, 1999 for grant of refund. The Revenue, in response, vide letter No.C. No.V (18) Ref/311/99/7041 dated 27.09.1999 communicated to the respondent-assessee as follows:- "You are requested to furnish the evidences showing that the incidence of duty debited/deposited by you for Rs. 3.74 crores has not been passed on to your customers. It has also been observed that you have not submitted copy of protest letter under Rules 233B of the C.E. Rules in respect of Rs. 54,00,000 /- debited by you in PLA vide entry No.956 dated 26.5.95. You are directed to submit the above documents within three days of receipt of this letter so that your claim may be processed." 6. The said letter was replied to on 30.09.1999. The relevant part of the reply reads as follows:- "The deposit of amount of Rs. 3,20,00,000.00 was made directly in the Bank against TR 6 for which no credit was taken in the PLA and the balance amount of Rs. 54,00,000.00 was debited from the PLA under protest in presence of Superintendent, Central Excise, Range-IV, Div. I Ghaziabad. In this way when the amount was not utilised by us in any way other than making deposits against the Ad....
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....rity allowed the application for refund. 8. Be it mentioned here that after the application for refund was filed and the Revenue was in correspondence with the assessee, it required the assessee to get a rectification order from this Court with regard to a typographical error pertaining to the classification. As stated earlier, in the original order of this Court, the classification was mentioned as 2201.90 which was corrected by a corrigendum making it "2202.90". Be that as it may, we clearly state that it has neither any bearing nor impact on the present lis. 9. Presently to the flash back. In pursuance of the order passed by the competent authority, an amount of Rs. 3,74,00,000 /- was refunded by cheque no.639266 dated 15.11.2000 payable at PNB Navyug Market, Ghaziabad. As no interest was paid by the appellant, the respondent filed a Civil Miscellaneous Writ Petition No. 249 of 2001 before the High Court of Judicature at Allahabad. The Division Bench, considered the judgment rendered by this Court in Civil Appeal No.7766 of 1995, took note of the time prescribed for disposal of the application for refund, the language employed in Section 11-BB of the Central Excise Act, 19....
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.... 12. Mr. Upadhyay, learned senior counsel appearing for the respondent would contend that in the absence of a particular form in praesenti the application was in order from the inception and, in any case, the period commences from the date of submission of the application which is required to be filed within one year. It is put forth by him that the time runs from that day and it is open to the Revenue to ask the assessee to remove the defects and if the defects are not removed it can reject the application but it has to be done within the statutory period, but under no circumstances, there can be an assumed extension of time by the Revenue. To bolster the said submission, reliance has been placed on Ranbaxy Laboratories Limited vs. Union of India & Ors. (2011) 10 SCC 292. 13. To appreciate the controversy in proper perspective, it is seemly to refer to the provisions dealing with refund and interest. Section 11-B deals with claim for refund of duty and interest, if any, paid on such duty. The said provision reads as under:- "Section 11B. Claim for refund of duty and interest, if any, paid on such duty- (1) Any person claiming refund of any duty of excise and interes....
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....ccordance with the rules made, or any notification issued, under this Act; (d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (f) the duty of excise and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify: Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of duty and interest, if any, paid on such duty has not been passed on by the persons concerned to any other person. (3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder or any other law for....
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....is not refunded within three months from the date of receipt of the application under Section (1) of Section 11-B, there shall be paid to the applicant interest at the notified rate from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty. The significant words are "expiry of three months from the date of receipt of such application". In the instant case, the application was filed on 25th August, 1999. The said application, needless to emphasise, was preferred under sub-section (2) of Section 11-B. We have been apprised of the circular dated 30th May, 1995. It deals with interest of delayed refund under Section 11-BB. Paragraph 2 of the said circular being relevant is reproduced below:- "2. Keeping the above in view, the following instructions are being issued regarding refunds claimed under section 11 BB of CE & SA, 1944:- (a) Refund application must invariably be filed in the office of the Assistant Collector and not with the Range Superintendent. (b) Immediately on receipt of an application, the same must be scrutinized by an officer, not below the rank of an Inspector ....
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....d the said communication. On a studied scrutiny of the said letter, it is quite vivid that the two aspects were mentioned by the Revenue. They relate to the arena whether the assessee has passed on the duty to others; and whether the amount that was deposited was done under protest. The assessee was granted three days time and within a span of three days, i.e., 30th September, 1999, the same was complied with by stating that the duty had not been passed on by the assessee to any consumer and the amount was deposited under protest. With the said communication, the proceedings commenced so that the competent authority could be satisfied as provided under sub-section (2) of Section 11-B. During that process, a communication was made on 1st December, 1999 to get the order passed by this Court rectified as there was a mistake with regard to the classification. We have already stated that the rectification in the order has no bearing on the determination of interest. No special emphasis can be laid on the said aspect. As is evident, after production of documents, ledgers and other documents, the adjudicating authority passed an order dated 16.11.2000 granting refund. 17. The seminal i....
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....1B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under Section 11BB of the Act becomes payable. [Emphasis supplied] 18. While dealing with the said facet, the Court also referred to circular dated 01.10.2002 issued by the Central Board of Excise and Customs, New Delhi whereby a direction was issued to fix responsibility for not disposing of the refund/rebate claims within three months from the date of receipt of the application. Appreciating the import of the said circular, the Court opined as follows:- "12. Thus, ever since Section 11BB was inserted in the Act with effect from 26th May 1995, the department has maintained a consistent stand about its interpretation. Explaining the intent, import and the manner in which it is to be implemented, the Circulars clearly state that the relevant date in this regard is the expiry of three months from the date of receipt of the application under Section 11 B (1) of the Act." The ultimate conclusion was recorded thus:- "19. In view of the above analysis, our answer to the question formulated in para (1) supra is that the liability of the rev....
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....lso be made to apply and satisfy all the requirements of sub-sections (1) and (2) of Section 11-B, when he is entitled to such refund as a matter of right. The said contention was not accepted by the Court and while not accepting the larger Bench stated that:- "... Such a holding would run against the very grain of the entire philosophy underlying the 1991 Amendment. The idea underlying the said provisions is that no refund shall be ordered unless the claimant establishes that he has not passed on the burden to others. Sub-section (3) of the amended Section 11-B is emphatic. It leaves no room for making any exception in the case of refund claims arising as a result of the decision in appeal/reference/writ petition. There is no reason why an exception should be made in favour of such claims which would nullify the provision to a substantial degree. So far as "lack of incentive" argument is concerned, it has no doubt given us a pause; it is certainly a substantial plea, but there are adequate answers to it. Firstly, the rule means that only the person who has actually suffered loss or prejudice would fight the levy and apply for refund in case of success. Secondly, in a comp....