M/S Sara Sae Pvt. Ltd vs Commissioner
2024 Latest Caselaw 971 UK

Uttarakhand High Court

M/S Sara Sae Pvt. Ltd vs Commissioner on 17 May, 2024

                                                        Reserved on:13.05.2024
                                                        Delivered on:17.05.2024
    IN THE HIGH COURT OF UTTARAKHAND
               AT NAINITAL
           HON'BLE THE CHIEF JUSTICE MS. RITU BAHRI
                             AND
             HON'BLE SRI JUSTICE RAKESH THAPLIYAL


        CENTRAL EXCISE APPEAL No.09 OF 2016

M/s Sara Sae Pvt. Ltd                                         ...Appellant
                                 Versus

Commissioner, Central Excise & Service Tax, Dehradun

                                                            ...Respondent

                        with
        CENTRAL EXCISE APPEAL No.10 OF 2016

M/s Sara Sae Pvt. Ltd                                         ...Appellant
                                 Versus

Commissioner, Central Excise & Service Tax, Dehradun

                                                            ...Respondent

Counsel for the appellant          :   Mr. Pulak Raj Mullick, learned counsel.

Counsel for the respondent.        :   Mr. Shobhit Saharia, learned counsel.


JUDGMENT :

(per Ms. Ritu Bahri, C.J.)

The appellant - M/s Sara Sae Pvt. Ltd., has

come up in the appeal seeking quashing of the

impugned order dated 01.07.2016, passed in Central

Excise Appeals, passed by the CESTAT, New Delhi,

Annexure no.11 to the appeal. Further prayer is made to

allow the refund of Rs.21,09,929/- with appropriate

interest under section 11BB of the Act.

2. The appellant - M/s Sara Sae Pvt. Ltd, is

registered with the Central Excise Department bearing

Registration No.AAACS6857 I XM 002, for

manufacturing of oil field equipment, machinery and

parts thereof, falling under Chapter 84 of the Central

Excise Tariff Act, 1985. The appellant supplied oil field

equipment, machinery and parts thereof to M/s Oil and

Natural Gas Commission and to M/s Oil India Limited

under the International Competitive Bidding, on

payment of appropriate Central Excise Duty, under the

cover of invoices.

3. The appellant made a refund claim of

Rs.28,71,563/- on 09.05.2014 in the Central Excise

Division, Dehradun, and this application was made with

the Director General Foreign Trade (DGFT, Dehradun) on

03.10.2013.

4. Under section 8.3 (c) of the Foreign Trade

Policy, there was an exemption from terminal excise

duty for domestic manufacturing and supply of goods

under the International Competitive Bidding (deemed

exports scheme). The appellant under the Foreign Trade

Policy, first charged the Central Excise Duty in the

invoices, while making the sale under the Foreign Trade

Policy, while making the sale in the invoices, the

connotation was made "excise duty to be claimed under

deemed exports scheme".

5. The case of the appellant is that effectively no

Central Excise Duty had been claimed from M/s ONGC

and Oil India Limited, and in this backdrop, the cenvat

credit could not be availed by the purchaser.

6. As per the Central Excise Notification

No.12/2012 C.E. dated 17.03.2012, all goods falling

under any chapter, supplied against International

Competitive Bidding were exempted from payment of

Central Excise Duty read with Condition no.41, i.e. if the

sale were exempted from custom/additional custom duty

then mutatis mutandis the same would ipso-facto, would

also be exempted from payment of Central Excise Duty

under the Notification No.12/2012 C.E. dated

17.03.2012.

7. The Ministry of Commerce and Industry,

Department of Commerce, Udyog Bhawan, New Delhi,

had issued a Notification No.4 (RE-2013)/2009-2014

dated 18.04.2013, where amendments were made to

para 8.3 (c) of the Foreign Trade Policy, concerning

"deemed exports scheme". It was clarified that refund of

terminal excise duty would be given if exemption is

available, and it was further clarified that exemption

from terminal excise duty was available to supply

against ICB. A further clarification was given vide

Circular No.16 (RE-2012/2009-2014) dated 15.03.2013,

by the Ministry of Commerce and Industry, Director

General of the Foreign Trade, Udyog Bhawan, New Delhi,

about exemption for supply of goods under ICB. It was

further clarified that if there has been any

error/oversight committed, then the agency collecting

the tax, would refund it, rather than seeking the

reimbursement from the another agency. It was further

clarified that if the supplies are ab-initio exempted from

payment of excise duty, no refund of terminal excise

duty, should be provided by the DGFT. Notification dated

18.04.2013 and 15.03.2013, Annexure no.2 to this

appeal.

8. The appellant made refund claims with the

DGFT, Annexure no.3, collectively, after clearing goods

from the factory, on the payment of the appropriate

Central Excise Duty, filed the refund claim with the office

of Deputy Director General, Foreign Trade (DGFT) on

14.05.2013, 27.05.2013, 05.08.2013 and 03.10.2013,

for claiming refund. This was done immediately after

obtaining the payment certificate from the concerned

Banker (BRC)/or from the Project Authority concerned.

The copies of the refund claims filed with DGFT, are

being collectively enclosed as Annexure no.3, to the

appeal.

9. The appellant has also placed on record

detailed chart, indicating details and correlation of

invoice, PO number, certificate of payment received,

project authorization certificate and duty details etc., in

respect to the disputed goods cleared under deemed

export under ICB, Annexure no.4, to the appeal.

10. The appellant was informed by DGFT that they

were now required to file the refund claims to the

concerned Deputy Commissioner of Central Excise,

Dehradun Division. Thereafter, the appellant made a

refund claims to the Deputy Commissioner, Central

Excise, Dehradun, as per Annexure no.5, to the appeal

dated 23.04.2014, 07.07.2014 and 15.07.2014.

11. The Deputy Commissioner, Central Excise,

Dehradun, thereafter issued a show-cause notice dated

07.08.2014, proposing to deny the refund claim of

Rs.28,71,563/- vide Annexure no.6, and while issuing a

show cause notice, the Deputy Commissioner, Central

Excise, Dehradun, observed that the refund was time

barred under section 11B of the Central Excise Act,

1944, the appellant had supplied goods against the

project authority certificate through ICB, and under

Condition No.29 (a) (b) (c), of the Notification

No.21/2002, custom dated 01.03.2002 read with

Condition No.41 of Notification No.12/2012 custom,

dated 17.03.2012, the certificate was required to be

given by the Authorized Officer of the Director General

of Hydro Carbons (Ministry of Petroleum and Natural

Gas, Government of India), instead of Ministry of

Petroleum, the appellant had filed project authority

certificate issued by M/S ONGC and M/s Oil India

Limited.

12. The appellant gave his reply to the show-

cause notice on 27.10.2014, Annexure no.7, and the

Assistant Commissioner, Central Excise, Dehradun,

rejected the refund claim vide order dated 30.01.2015,

Annexure no.8, to the appeal. The reasons given while

rejecting the refund claim was that the refund claim was

time barred under section 11B of the Central Excise Act,

1944. Initially the refund claim had been filed within

time with DGFT, as that was the prevalent procedure

notified, and only upon the directions of DGFT, the

refund claims are now been filed with the Central Excise

Authority.

13. The appellant went in appeal, and the

Assistant Commissioner, Central Excise, Dehradun,

partly allowed the refund claim, immediately after return

by the DGFT, within time limit of one year, as per

section 11B of the Central Excise Act, from the date of

the payment of the terminal excise duty.

14. However, the Divisional Assistant

Commissioner, Central Excise, fortified the view that the

project authorization certificates, were valid documents,

to enable them to claim the refund of the terminal excise

duty. The claims, which were made beyond a period of

one year under section 11B of the Act were rejected.

Against the above said order, the claim was rejected

amounting to Rs.21,09,929/- which on further appeal

was also rejected by the Commissioner (Appeals),

Central Excise, Meerut, vide Annexure no.10 on the

ground that the said refund claim was time barred under

section 11B of the Central Excise Act. Aggrieved by the

order Annexure no.9, the appeal was filed before the

CESTAT, New Delhi, this appeal was partly allowed by

giving direction to the Adjudicating Authority to allow

interest under section 11BB of the Act, on those refund

claims, which had been filed within prescribed time limit

under section 11B of the Act. However, rejecting the

refund claims, on the ground that they were beyond a

period of one year under section 11B of the Act, as per

order dated 01.07.2016, Annexure no.11 to the appeal.

15. At the outset, a reference can be made to

section 11B, which deals with claiming of the refund

under Central Excise Act, 1944, which reads as under:-

"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 interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in Section 12A) as the applicant may furnish to establish that the amount of duty of excise and

interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person:

Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application 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 and interest, if any, paid on such 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 and interest, if any, paid on such duty 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 and interest, if any, paid on such duty 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;

Explanation. - For the purposes of this section,-

(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

(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;

(ea) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 5A, the date of issue of such order;

(eb) in case where duty of excise is paid provisionally under this Act or the rules made there under, the date of adjustment of duty after the final assessment thereof;

(ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction;

(f) in any other case, the date of payment of duty."

16. Learned counsel for the appellant has argued

that in the present case, the refund applications, which

were filed before the expiry of one year from the

relevant date have been allowed with interest. However,

the only question for consideration in the present appeal

is whether after the Notification dated 18.04.2013,

which took away the powers of the DGFT, to grant the

refund, the time taken before that authority where they

could not pass any order of the refund can be taken out

a limitation of one year where an appropirate application

was made before the Competent Authority, after expiry

of one year.

17. Learned counsel for the appellant has referred

to the Hon'ble Supreme Court judgment in the case of

"M.P. Steel Corporation Vs. Commissioner of

Central Excise" reported in 2017 (50) STR 205 SC,

where the Supreme Court had examined that whether

the provisions of the Limitation Act, 1963, would apply

to the Tribunals, Quasi-Judicial Authority other than the

courts. The Hon'ble Supreme Court was examining the

provisions of Section 128 of the Custom Act 1962, which

dealt with specific provisions for filing an appeal i.e. a

specific period was prescribed outlining which an appeal

could be filed. The Hon'ble Supreme Court gave a

categoric finding that the Limitation Act, 1963, would

apart from being applicable to courts, would equally be

applicable to Appellate Forums, and in addition to that

would be applicable to cases of delay initiated suit or any

other authority concerning proceedings. The time

utilized before a wrong forum has to be adjusted when

the appellant approaches the correct forum to claim

refund.

18. The Hon'ble Supreme Court in the case of

"Sunrays Engineers Pvt. Ltd. Vs. Commissioner of

C. Ex., Jaipur" reported in 2015 (318) E.L.T. 583

(S.C.), had examined the case of limitation under

Section 11B of the Central Excise Act, 1944. The Hon'ble

Supreme Court was examining a Notification dated

31.10.2000, where the rate of excise duty has been

reduced with retrospective effect i.e. w.e.f 01.07.1999.

The refund application was made on 19.06.2001.

Keeping in view the Notification dated 31.10.2000, the

Hon'ble Supreme Court held that the trigger point which

entitled the authority to refund was 31.10.2000, and the

limitation has to be reckoned from the date the

Notification has been issued. In the absence of such

notification, there was no cause of action in favour of the

assessee. Hence, the application moved for refund on

19.06.2001, was within time, and there was no logic in

reckoning the limitation from July, 1999, under section

11B of the Central Excise Act, 1944. In paragraph no.2,

of the said judgment, it is observed as under:-

2. It is clear from the aforesaid that otherwise the appellant is held entitled to refund of the amount but ousted on limitation. Thus, the only issue which needs determination is as to whether the refund applications filed by the appellant were within the period of limitation or not. In order to decide this issue, few dates which are material for this purpose may be taken note of which are as under:-

The period for which refund is sought is July, 1999, to October, 2000. The notification revising the rate of excise duty was issued on 31-10-2000 and given retrospective effect that is, w.e.f., 1-7- 1999. Thus, only on the issuance of this notification, the excise duty was reduced. It would, therefore, be clear that 31-10- 2000 is the trigger point which entitled the appellant to claim the refund. In the absence of any such notification there was no cause of action in favour of the appellant to make any such application for refund. As a natural consequence, therefore, the period of limitation has to be reckoned from 31-10-2000. It is not in dispute that application for refund was filed on 19-6-2001 and the period of limitation at that time was one year. The applications for refund were, therefore, clearly within limitation. We do not understand the logic or rationale behind the order of the CESTAT counting the period from July, 1999 for which the excess amount was sought to be refunded. The order of the CESTAT is, therefore, palpably wrong and erroneous in law."

19. The ratio of the judgments are applicable in

the facts of the present case, in the present case, after

the Notification dated 18.04.2013, the DGFT, had no

powers to grant the refund and the time taken before

that authority could not be made basis to reject the

application for refund on the ground of expiry of the

limitation. The parties are not in dispute that prior to the

Notification dated 18.04.2013, it was the DGFT, who had

the powers to grant refund, once the powers was taken

away from the DGFT, the assessee, whose right to

refund has not been disputed by the respondent cannot

be denied the benefit of the refund only on the ground

that after the Notification dated 18.04.2013, his

application made for refund was barred by limitation of

one year as per section 11BB of the Central Excise Act,

1944.

20. The application in the present case was made

on 03.10.2013, and after the Notification dated

18.04.2013, the period of one year would start from the

date 18.04.2013, to approach the correct forum for

grant of refund i.e. Deputy Commissioner. The period of

one year would expire on 18.04.2014, and the appellant

had approached the DGFT, Dehradun on 03.10.2013,

which was before the expiry of limitation i.e.

18.04.2014.

21. Hence, these appeals are being allowed. The

order dated 01.07.2016, passed in Central Excise

Appeals, passed by the CESTAT, New Delhi, Annexure

no.11, to the appeals is being set aside. A direction is

being given to the respondent to release the refund

amount of Rs.21,09,929/- with appropriate interest

under section 11BB of the Act. This entire payment be

made within a period of six weeks.

______________ RITU BAHRI, C.J.

___________________ RAKESH THAPLIYAL, J.

NR/