TaxTMI 
TaxTMI 
2018 (7) TMI 1059
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....uments. Thereafter a show-case was issued to the appellant proposing to deny the refund. After following the due process, the original authority rejected the refund claim for the above said period as time-barred as per the provisions of Section 11B of the Central Excise Act. Aggrieved by the said order, appellant filed appeal before the Commissioner (Appeals) who also upheld the Order-in-Original and rejected the appeal on time-bar. 2. Heard both the parties and perused the records. 3. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same is passed without appreciating the position of law as well as various decisions of the Tribunal. She further submitted that the limitation of one year as provided in Section 11B of the Central Excise Act is not applicable in the present case because in the present case the claim relates to only accumulated cenvat credit in terms of Rule 5 of Cenvat Credit Rules. She further submitted that the Notification 5/2006 CE dated 14.03.2006 and 27/2012 CE dated 18.06.2012 issued under Rule 5 of the Cenvat Credit Rules, 2004 have also not prescribed and/or defined 'relevant date' for computation of o....
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....ose. Relevant date for computing one year period prescribed under Section 11B ibid is to be determined by applying Rule 5 of the Cenvat Credit Rules and since without reading of Rule 5 ibid with Notification ibid, refund claim cannot be filed, limitation provided under Section 11B ibid has to be satisfied. Though Rule 5 does not prescribe any specific relevant date, it is to be the date on which the final products are cleared for export, if any other conclusion is arrived, it will result in disentitling any person to claim of refund of cenvat credit. CESTAT viewed that no time-limit was applicable for refund of cenvat credit, found to be incorrect. Learned AR further submitted that this decision of the Madras High Court was subsequently followed by the Madras High Court in the case of CCE, Chennai Vs. Celebrity Designs India Pvt. Ltd. reported in 2015-TIOL-646-HC-MAD. 5. After considering the submissions of both the parties end perusal of the material on record, I find that in the present case both the refunds filed by the appellant under Rule 5 of Cenvat Credit Rules read with Notification 5/2006 dated 14.03.2006 are time-barred because the said refunds have been filed for the ....
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....he latter remanded the matter for adjudication afresh. In these circumstances, the petitioner should not be allowed to turn round and contend that provisions of Section 11B are not attracted to its refund claim. 15. Faced with the situation aforesaid, arising from the plain language in Clause (c) of the proviso to sub-section (2) of Section 11B, which refers expressly to Modvat credit, the learned counsel for the petitioner in his counter reply submitted that the proviso contained in Clause (c) should not be construed as enlarging the scope of the main provisions in sub-section (1) of Section 11B to read Modvat credit to be covered by it. On the interpretation of the main provisions in the light of the proviso, reference is made to the decisions of the Supreme Court in - Income Tax Commissioner v. I.M. Limited reported in AIR 1959 SC 712; Dibyasingh Malana v. State of Orissa reported in AIR 1989 SC 1737 (paras 2,7); Dwaraka Prasad v. Dwaraka Das reported in AIR 1975 SC 1758 (paras 17,18); S.B.K. Oil Mills v. Subhash Chandra reported in AIR 1901 SC 1596 (paras 8,9). It is submitted that so far as the legal position is concerned, it would not change on the basis of ....
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.... Court in the said case held that the Department's action for recovery of duty consequent upon erroneous reversal of Modvat credit would not be covered by Section 11A of the Act. 19. We have carefully gone through the facts and ratio of the said judgment of the Supreme Court in Raghuvar case (supra). What we find is that the Supreme Court therein compared the provisions of Section 11A with the provisions contained in Rule 57-I as originally stood prior to and after the amendment made on 16-10-1988. After comparing the provisions of Section 11A and Rule 57-I unamended and Rule 57-I amended, the Supreme Court came to the following conclusion: "The recovery of duty availed of and utilized in utter breach of the faith and mutual trust and confidence which is the raison d'etre for the proper and successful working of the Modvat Scheme and that too in gross violation of the mandatory requirements necessarily to be fulfilled before ever claiming or availing of such benefits cannot be said to be the same as the demand for payment to be made under Section 11A of the Act of any excise duty not levied or paid or has been short levied or short paid. They fall into two distinct and di....
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....e to the conclusion that the period of limitation preserved under Section 11A for initiating proceedings for excess levy or short levy at the instance of the Department are not attracted to case of Modvat credit. 22. This case before us is on the question of applicability of Section 11B of the Act for the purpose of seeking refund of credit availed under the Modvat Scheme read with the Notifications incorporating Import Export Policy QBAL. For better appreciation of the contentions advance by the learned counsel for the parties, Section 11B of the Act in its relevant part thereof deserves to be quoted: "11B. CLAIM FOR REFUND OF DUTY. - xxx (1) xxx (2) Provided that the amount of duty of exercise as determined by the Assistant 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: rebate of duty of excise on excisable goods exported out of (a) India or on excisable material used in the manufacture of the goods which are exported out of India; unspent advance deposits lying in balance in the applicant's (b) account current maintai....
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....he main provision contained in subsection (1) of' Section 11B, which prescribes procedure and limitation for application for refund. The normal function of a proviso is to except something out of the enactment or to qualify something enacted therein, which, but for the proviso, would be within the purview of the enactment. To this real nature of proviso is also another principle of interpretation that the proper function of a proviso is that it qualifies the generality of the main enactment by providing an exception. Ordinarily, it is foreign to the proper function of proviso to read it as providing something by way of an addendum or dealing with a subject, which -is foreign to the main enactment. Proviso can be taken aid of as useful guide to construction of the main enactment. Proviso can be taken aid of as useful guide to construction of the main enactment. If the enacting portion of a Section is not clear a proviso appended to it may give an indication as to its true meaning. As stated by Lord Herschell, 'Of course, a proviso may be used to guide you in the selection of one or other of two possible constructions of the words to be found in the enactment, and show when t....
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....itioner is accepted, Clause (c) of the proviso to sub-section (2) would be rendered meaningless and of no effect. As per settled principles of interpretation of the proviso and its aid to be taken of for interpreting the main provisions, we are persuaded to accept the view point canvassed by the learned counsel for the Department that Clause (c) of the proviso to sub-section (2) is clear legislative indication that under sub-section (1) of Section 11B, refund claims on the basis of Modvat credit wrongly denied are fully covered in the absence of any special provision for it in the Rules containing Modvat Scheme. 27. At the conclusion of arguments, the learned counsel for the petitioner handed over to us, a note to bring to our notice, the provisions contained in Rule 57F as a part of the Modvat Scheme in Notification No. 85/87 -C.E. dated 1-3-1987 as amended by Notification No. 2/94-C.E. (N.T.) dated 24-1-1994. Relying on Rule 57F in the Notification issued thereunder, submission made is that refund based on Modvat credit Scheme is governed by the said Rule and therefore, general provisions for claiming refund under Section 11B of the Act would not be attracted. On basis of Rule....
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....n 11A is not applicable to an action proposed to be taken by the Department based on the said Scheme. 30. The next question is whether the respondent Authorities in the Excise Department were right in rejecting the petitioner's claim on the ground that the application under Section 11B was filed admittedly beyond the prescribed period of six months as was the period fixed prior to its substitution with one year with effect from 12-5-2000 by Section 101 of the Finance Act, 2000. Sub-section (1) of Section 11B in fixing period of limitation uses the words 'six months' from the 'relevant date'. 'Relevant date' has been defined in Explanation (B) below the Section. To cases not covered by Clauses (a) to (e), (ea) and (be), Clause (f) applies for computing period of limitation from relevant date. The relevant portion of the Explanation (B) reads thus: "Explanation (B). - 'relevant date' means - (a) xxx (b) xxx (c) xxx (d) xxx (e) xxx (ea) xxx (eb) xxx (f) in any other case, the date of payment of duty." 31. On behalf of the Department, it is urged that the Assistant Commissioner of Central Excise was right in holding t....
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....ave, with reasonable, diligence discovered it. For the application of the general principle of Limitation mistake and so far as reasonable diligence is concerned even the excise authorities locally stationed were unaware of the Public Notice, which enabled the Petitioner to avail Modvat credit on inputs. In such circumstances, provisions of Section 17 can be passed into service in favour of the petitioner. Sub-section (2) of Section 29 of the Limitation Act provides that provisions of Sections 4 to 24 (which includes Section 17) shall apply to Special law in so far as and to the extent to which they are not expressly excluded, by such special law or local law. 34. Since the provisions of the Act, do not expressly exclude applicability of Sections 4 to 24 and particularly Section 17 of the Limitation Act, the said provision of the Limitation Act can be made applicable to refund claims filed under Section 11B of the Act. 35. For the purpose of commencement of limitation under Clause (f) of Explanation (B) to Section 11B of the Act, even though reversal of Modvat credit was done in February/March 1995, since the mistake was discovered only in November 1995 when the Public Notice....