TaxTMI 
TaxTMI 
2017 (6) TMI 857
X X X X Extracts X X X X
X X X X Extracts X X X X
....ification No.3/2001 dated 01.03.2001, issued under Section 5A(1) of the Central Excise Act, the respondent assessee is eligible for exemption of special excise duty of 16% advalorem, if condition No.40 of the notification is fulfilled and also prescribes the procedure for availing the concessionary rate, which is to be claimed as a refund. The respondent assessee has been claiming refunds on the cars registered as taxi. It is stated that the refund claims were filed by the respondent assessee, after the expiry of six months from the date on which the duty was paid on the motor vehicles. Therefore, the Assistant Commissioner of Central Excise, Chengalpattu Division issued three show cause notices vide C.No.V/87/18/222/01-RF dated 14.03.2002 read with corrigendum dated 07.05.2002, C.No. C.No.V/87/18/260/02-RF dated 07.05.2002 and C.No.V/87/18/ 303/02-RF dated 11.06.2002 proposing to disallow the claims as time barred. All the three shows cause notices were adjudicated vide a common Order in Original No.48/2002 dated 20.11.2002 and the adjudicating authority, rejected 31 claims for Rs. 22,95,991 as time barred and partially rejected Rs. 8,03,833 relating to 6 claims and the respondent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n excess of the amount calculated at the rate specified in the corresponding entry in column (5) of the said Table, subject to the relevant conditions specified in the annexure to this Notification, and referred to in the corresponding entry in column (6) of the said Table; Explanation ,- For the purpose of this notification, the rates specified in column (4) and (5) of the said Table are ad valorem rates, unless otherwise specified :- TABLE S. No. Chapter of heading No Or Sub heading No Description of goods Rate Under the first Schedule Rate Under the Second Schedule Condition No (1) (2) (3) (4) (5) (6) 225 87 Motor Vehicle falling under- (i) sub-heading No.8702.10 16% Nil 40 or 8703.90, which after clearance has been registered for use solely as ambulance; or (ii) sub-heading No.8703.90 16% Nil which after clearance has been registered for use solely as taxi. 16% Nil The relevant portion, in condition 40 of the Notification, is extracted below :- (a) .... (b) the manufacturer files the claim for refund of duty paid in excess of that specifi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee was directed to produce all the evidence upon which they intend to rely in support of their defence. Again, on 07.05.2002 and 11.06.2002, two show cause notices in V/87/18/260/02-RF and V/87/18/303/ 02-RF, were issued to the respondent assessee informing as to why the refund claims mentioned in the notices should not be rejected, on the ground that claims of refund of duty paid in excess have been filed beyond the period of six months from the date of receipt of payment of duty of the said motor vehicles and thereby all the claims are time barred. 6. In reply to the three show cause notices, the respondent assessee by their letters dated 04.06.2002 and 14.06.2002 have interalia submitted that they sell the cars to their dealers on payment of applicable excise duty of 32% advalorem and the dealers in turn sell the cars to various customers. Some of the cars sold to the customers are subsequently registered as Taxis and hence are eligible for concessional rate of duty @ 16% vide Notification No.3/2001-CE dated 01.03.2001 under Sl. No.225 read with condition No.40 of the said notification. As required under the notification, for the cars registered as Taxis, necessary docum....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ecision in 2007 (216) ELT 256, wherein it has been held that since the statutory period as provided under Section 11B is one year, the refund claims made by the assessee cannot be held to be time barred, for the only reason that they were filed beyond the period prescribed under the notification. Challenging the same, the instant appeal has been preferred by the Revenue, before this Court. 8. Heard Mr. A.P. Srinivas, Senior Standing Counsel and Mr. Raghavan Ramabadran for Mr. Lakshmikumaran, learned counsel for the respondent. 9. The following substantial questions of law were framed by this Court, at the time of admission of this Appeal : 1.Whether Notification No.3/2001 dated 01.03.2001 (Sl.No.225 read with condition 40) is a special provision for a specific purpose comprising a self contained code governing the procedure and conditions for grant of refund in respect of vehicles registered as taxis and ambulances ? 2.Whether the Tribunal was correct in applying the time limit specified in the general provision of Section 11B of the Central Excise Act, 1944 in preference to the time limit contained in the special provision contained in Notification 3/2001 p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e respondent assessee and it has to fulfil the conditions stipulated in the notification, failing which they are not entitled to the benefit of exemption, under such notification. Therefore, the contention of the respondent assessee that the instant case relates to the determination of rate of duty of excise and so the appeal will not lie within the jurisdiction of this court, cannot be accepted. The respondent assessee has claimed refund of excise duty by accepting the conditions prescribed in the notification No.3/2001 dated 01.03.2001. Without challenging the said notification, the respondent assessee cannot have any right to claim the refund under Section 11B of the Act. 11. Therefore, we are now considering the other issues involved in the appeal, as to whether the time limit of six months under the notification is only a procedural condition or is it mandatory? All the conditions in the notification have been complied with, by the respondent assessee, except Clause 40(b). Therefore, non compliance of the same, is only a procedural lapse and it can be relaxed. In this regard the decisions, in the case of Indian Farmers Fertilizers Co-operative Ltd. vs. Union of India [1995 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 applicants account current maintained with the [Commissioner of Central Excise]; (c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; (d) the duty of excise paid by the manufacturer, if he had not passed on the incidence of such duty to any other person; (e) the duty of excise borne by the buyer, if he had not passed on the incidence of such duty to any other person; (f) the duty of excise 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 has not been passed on by the persons concerned to any other person. (3) Notwithstanding anything any judgment, decree, order or di....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 a manufacturer is required to pay a sum, for a certain period, on the basis of the rate fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the duty leviable on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period but before the expiry of that period such rate is reduced, the date of such reduction; (e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person;] in the case of goods which are exempt from payment of duty (eb) this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (ec) in case where the duty becomes refundable as a conse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o exemption therein shall apply to excisable goods which are produced or manufactured in a free trade zone or a special (i) brought to any other place in India; or economic zone] and by a hundred per cent export-oriented (ii) [brought to any place in India. undertaking and Explanation. In this proviso, free trade zone , special economic zone and hundred per cent export-oriented undertaking shall have the same meanings as in Explanation 2 to sub-section (1) of section 3. Therefore, the notification under dispute provides partial exemption of excise duty, on fulfilment of conditions. Condition No.40(b) of the notification provides that the claim for refund of duty has to be filed before the expiry of six months, from the date of payment of excise duty on the said motor vehicle. Condition 40(c) states that the certificate issued by the State Transport Authority has to be filed within three months or in the extended period of further three months, from the date of clearance of the said motor vehicle from the factory. Condition 40(d) provides that when the excise duty has been collected from the customers in excess, of the exemption notification then the same has to be retur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r, who used a particular raw material, on which, an appropriate amount of duty of excise had already been paid. Therefore, rejecting the claim of the importer for exemption, the Division Bench of the Bombay High Court held that "a tax payer, who desires to take advantage of an exemption, must bring his case within the four corners of the exemption Notification." An argument was advanced in that case that a condition, which could not be fulfilled by an importer, cannot be put against the importer and could be taken only to be directory in nature. But, the said contention was repelled by the Bombay High Court. 36. In Thermax Private Limited Vs. the Collector of Customs [MANU/SC/ 0209 /1993 : 1992 (4) SCC 440], the assessee, who imported certain goods from Japan for the purpose of using the same for refrigeration/air conditioning of two factories, claimed the benefit of two exemption Notifications bearing Nos. 93/76 and 63/85, which provided concession of 25% ad valorem. The Notifications stipulated two conditions to be fulfilled namely, (a) that the parts indicated therein should be used for refrigeration and air conditioning appliances in any one of the places set out in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....this Court in Commissioner of Sales Tax v. Industrial Coal Enterprises (Supra) and in the case of Bajaj Tempo Ltd., Bombay v. Commissioner of Income Tax, Bombay City-III, Bombay (Supra). We are unable to countenance the above submission. In our view, the provisions of exemption clause should be strictly construed and if the condition under which the exemption was granted stood change on account of any subsequent event the exemption would not operate. 24. In our view, an exception or an exempting provision in a taxing statute should be construed strictly and it is not open to the Court to ignore the conditions prescribed in the Industrial Policy and the exemption Notifications. 25. In our view, the failure to comply with the requirements renders the writ petition filed by the respondent liable to be dismissed. While mandatory rule must be strictly observed, substantial compliance might suffice in the case of a directory rule. 26. Whenever the statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to severe consequences, such requirement would be mandatory. It i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....les are equipped with a CHARGE push button that functions the same way as the SET CHARGE MANUAL push button does. 17. ... 18. We approve the aforesaid reasoning and rational given by the Tribunal in coming to the conclusion that the goods of the Appellant would not qualify the description contained in Notification Nos. 8/96 : MANU/EXCT/0010/1996 and 4/97. It is trite that strict interpretation is to be given to the exemption notifications and it is upon the Assessee to approve that he fulfils all the conditions of eligibility under such Notifications. This is so held by this Court in Rajasthan Spinning and Weaving Mills, Bhilwara, Rajasthan v. Collector of Central Excise, Jaipur, Rajasthan MANU/SC/0729/1995 : (1995) 4 SCC 473, wherein this principle was stated in the following manner: 16. Lastly, it is for the Assessee to establish that the goods manufactured by him come within the ambit of the exemption notification. Since, it is a case of exemption from duty, there is no question of any liberal construction to extent the term and the scope of the exemption notification. Such exemption notification must be strictly construed and the Assessee should bring....