Karnataka High Court

M/S Green Agro Pack Pvt Ltd vs Union Of India on 5 January, 2024

Author: P.S.Dinesh Kumar

Bench: P.S.Dinesh Kumar

                                                 -1-
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                                                           WP No. 5012 of 2019




                         IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                            DATED THIS THE 5TH DAY OF JANUARY, 2024

                                               PRESENT
                           THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR
                                                  AND
                             THE HON'BLE MR. JUSTICE C.M. POONACHA
                               WRIT PETITION NO. 5012 OF 2019 (T)


                   BETWEEN:

                   M/S. GREEN AGRO PACK PVT. LTD.,
                   NO.232, 13TH CROSS
                   INDIRANAGAR 2ND STAGE
                   BANGALORE-560 038
                   [REPRESENTED BY B.M. DEVAIAH
                   S/O B.K. MUTTANNA
                   AGED ABOUT 66 YEARS
                   CHAIRMAN AND MANAGING DIRECTOR
                   OF M/S.GREEN AGRO PACK PVT. LTD]                ...PETITIONER

                   (BY SHRI. ATUL K. ALUR, ADVOCATE)

                   AND:
Digitally signed by
ANUSHA V
Location: HIGH      1.     UNION OF INDIA
COURT OF
KARNATAKA                  MINISTRY OF FINANCE
                           REPRESENTED BY SECRETARY
                           NORTH BLOCK
                           NEW DELHI-110 001

                   2.      COMMISSIONER OF CENTRAL TAX
                           TRAFFIC TRANSIT MANAGEMENT CENTRE
                           BMTC BUILDING
                           ABOVE BMTC BUS STAND
                           DOMLUR, OLD AIRPORT ROAD
                           BANGALORE-560 071
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                                             NC: 2024:KHC:2836-DB
                                             WP No. 5012 of 2019




3.    CENTRAL BOARD OF INDIRECT
      TAXES AND CUSTOMS
      (FORMERLY KNOWN AS
      CENTRAL BOARD OF EXCISE AND CUSTOMS)
      REPRESENTED BY ITS CHAIRPERSON
      DEPARTMENT OF REVENUE
      NORTH BLOCK
      NEW DELHI-110 001                               ...RESPONDENTS


(BY SHRI. K. CHANDAN, ADVOCATE FOR
   SHRI. AMIT ANAND DESPANDE, ADVOCATE)

      THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO DECLARE RULE 5 OF THE
CAVEAT CREDIT RULES, 2004, ENCLOSED AS ANNEXURE-A AS BEING
ULTRAVIRES THE PROVISIONS OF SECTION 37 OF THE CENTRAL EXCISE
ACT, 1944 IN SO FAR AS IT PRESCRIBES CONDITIONS OR
RESTRICTIONS OR LIMITATIONS OR SAFEGUARDS FOR FILING REFUND
CLAIMS AND QUASH PARAGRAPH 3(B) OF NOTIFICATION DATED
18.06.2012 ENCLOSED AS ANNEXURE-B PRESCRIBING A TIME LIMIT
FOR CLAIMING REFUND OF CENVAT CREDIT AS BEING ULTRAVIRES THE
PROVISIONS OF RULE 5 OF THE CENVAT CREDIT RULES, 2004 AND
SECTION 37 OF THE CENTRAL EXCISE ACT, 1944 AND ETC.
      THIS WRIT PETITION, COMING ON FOR FURTHER HEARING, THIS
DAY, P.S.DINESH KUMAR, J., MADE THE FOLLOWING:


                               ORDER

This writ petition by the assessee is filed with the

following prayers:

(i) Writ of certiorari or declaration or any other appropriate Writ, order or direction to declare Rule 5 of the Cenvat Credit Rules, 2004, enclosed as Annexure-A as being ultravires the provisions of Section 37 of the Central Excise Act, 1944 in so far as it prescribes conditions or restrictions or limitations or safeguards for filing refund claims;

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(ii) Writ or direction in the nature of a Writ certiorari or any other appropriate writ or directions to quash paragraph 3(b) of Notification No.27/2012-CE(NT) dated 18.06.2012 enclosed as Annexure-B prescribing a time limit for claiming refund of cenvat credit as being ultravires the provisions of Rule 5 of the Cenvat Credit Rules, 2004 and Section 37 of the Central Excise Act, 1944;

(iii) Quash the impugned order Nos.20437/2018 and 20465/2018 both dated 15.03.2015 passed by the CESTAT enclosed as Annexure C1 and C2, by a writ of certiorari or any other appropriate writ or order as being unreasonable, arbitrary, oppressive, excessive, and without the authority of law;

(iv) Grant such other details as this Honourable High Court may think fit including the cost of this writ petition.

2. Heard Shri. Atul K. Alur, learned Advocate for the

assessee and Shri. K. Chandan, learned Advocate for

respondent.

3. At the outset, Shri. Alur, for the assessee

submitted that he does not press prayer clauses (a) & (b).

Hence, the remaining prayer is with regard to rejection of

refund claim made by the assessee for the claim period

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2011-12, 2012-13 & 2013-14. Assessee's application has

been rejected by the Order-in-Original dated 31.08.2015

(Annexure-G). The Commissioner (Appeals) allowed the

appeal filed thereon in part upholding the order passed by the

Original Authority in respect of A.Ys. 2011-12 and 2012-13,

but remitted the matter to the original authority for A.Y.

2013-14. Revenue challenged the order passed by the

Commissioner (Appeals) before the CESTAT. Feeling

aggrieved by the order passed by the Commissioner (Appeals)

so far as it relates to A.Y. 2013-14, assessee also challenged

the order passed by the Commissioner (Appeals). CESTAT

dismissed assessee's appeal and allowed the appeal filed by

the Revenue. In the result, the order passed by the Original

Authority stood restored. Feeling aggrieved, assessee is

before this Court.

4. Shri. Alur submitted that the Original Authority has

rejected the claim solely on the ground of limitation and the

same has been incorrectly upheld by the CESTAT. Placing

reliance on mPortal India Wireless Solutions P. Ltd., Vs.

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C.S.T., Bangalore1, he submitted that under similar

circumstances, this Court has allowed the appeal and directed

the Original Authority to decide the correctness of the claim.

He also relied upon Bellatrix Consultancy Services Vs.

Commissioner of Commercial Tax, Bangalore2. Accordingly,

he prayed that the matter may be remitted to the Original

Authority.

5. Shri. K. Chandan, for the Revenue submitted that

the Authority in mPortal has been considered, wherein it is

held that Section 11B of the Central Excise Act, 1944 is

squarely applicable for refund claims made under Rule 5 of

the Cenvat Rules 2004 and therefore, it must be construed

that the law is settled by Suretex Prophylactics India Pvt. Ltd.,

Vs. Commissioner of Central Excise, Cus. & S.T., Bangalore3.

Accordingly, he prayed for dismissal of this appeal.

2012(27) S.T.R. 134 (Kar.)

2022(67) G.S.T.L. 59 (Kar.)

2020(373) E.L.T. 481 (kar.)

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6. In the case of mPortal, assessee was a 100%

EOU4. It had paid input tax on various services and it

accumulated Cenvat credit. The claim was rejected on the

ground of limitation. On that premise, the matter was

remitted to the adjudicating authority. In the instant case,

the facts are identical.

7. Learned Advocate for petitioner is right in his

submission that mPortal was cited in Suretex, but there is no

finding with regard to mPortal. Both judgments are by

Benches of this Court of equal strength.

8. We have perused the Memorandum of Appeal filed

by the assessee before the Commissioner (Appeals). It is

urged therein that the decision in mPortal is applicable to the

facts of that case. As rightly contended by Shri. Alur, both the

Commissioner as also the CESTAT have not adverted to the

said authority and given any finding. The fact remains that

there is an accumulated Cenvat credit.

Export Oriented Unit

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9. One another contention urged by Shri. Alur is that

the assessee's returns have been accepted relying on BT

(India) Private Limited Vs. Union of India5 wherein, the Delhi

High Court has extracted Apex Court judgment in ITC Limited

Vs. Commissioner of Central Excise, Bombay6. Placing reliance

on BT (India) Pvt. Ltd., he submitted that once the returns

are accepted by the Tax Authority, if the refund claims are

rejected, it amounts to disturbing the assessment orders.

10. In BT India Pvt. Ltd., the Division Bench of Delhi

High Court has noted the Apex Court's judgment in ITC Ltd.

In ITC's case, it is held as follows:

"41. It is apparent from the provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise."

(Emphasis Supplied)

W.P.(C) No.13968/2021 decided on November 6, 2023 (Para 18)

(2019)17 SCC 46

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11. The Delhi High Court has also considered the power

available to the adjudicating authority while considering a

refund claim. In the instant case also, it is not in dispute that

the returns filed by the assessee have been accepted. We see

some force in the arguments advanced by Shri. Alur.

However, the question in this appeal is with regard to the

rejection of refund claim on the ground of limitation. In

mPortal, this Court has held that Section 11B is not

applicable. The Commissioner (Appeals), as also the CESTAT

have not returned any finding with regard to applicability of

empowerment. Therefore, in our opinion, the matter requires

reconsideration in the hands of the Original Authority. Hence,

the following:

ORDER

(a) Orders No.20437/2018 and 20465/2018 both dated 15.03.2018 passed by the CESTAT are set-aside;

(b) Matter is remitted to the Original Authority namely, Deputy Commissioner, Division-A,

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Service Tax Commissionerate-II, Bengaluru, for reconsideration in accordance with law after giving an opportunity of hearing to the assessee.