Gujarat High Court
M/S Garden Silk Mills Ltd. vs Union Of India on 6 April, 2021
Author: Sonia Gokani
Bench: Sonia Gokani, Gita Gopi
C/SCA/23348/2019 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 23348 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MS. JUSTICE GITA GOPI
==========================================================
1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?
========================================================== M/S GARDEN SILK MILLS LTD.
Versus UNION OF INDIA ========================================================== Appearance:
MR HARDIK P MODH(5344) for the Petitioner(s) No. 1 MR PY DIVYESHVAR(2482) for the Respondent(s) No. 2 NOTICE SERVED BY DS(5) for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MS. JUSTICE GITA GOPI Date : 06/04/2021 Page 1 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT CAV JUDGEMENT (PER : HONOURABLE MS. JUSTICE SONIA GOKANI)
1. This is a petition preferred under Articles 226 and 227 of the Constitution of India arising out of the order No.18-20/2019/CX(WZ)ASRA/Mumbai dated 30.08.2019 passed by the Principal Commissioner and Ex-Officio Additional Secretary to the Government of India, denying the petitioner the rebate claim on the ground of limitation.
2. The facts shorn of the details are as follows:
2.1. The petitioner is engaged in manufacture and export of polyester chips and polyester yarn. An export order was received by the petitioner from M/s. Flex Middle-Easter FZE, Dubai for export of 160480 kgs of polyester chips Textile Grade-160 MTS ( hereinafter to be referred to as "the goods") The petitioner manufactured the said goods from the factory located at village: Jolwa; Taluka Palsana, District: Surat and cleared the same with Page 2 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT payment of Central Excise Duty. The petitioner cleared the said goods under the prescribed FORM ARE-1 along with all requisite documents and filed the shipping bills bearing No.8696246 dated 27.07.2010 by declaring the value of the said goods of Rs.81,09,800/- from the port of Nav Sheva, JNPT at Raigadh.
2.2. The rebate of central excise duty paid on excisable goods is provided under Rule 18 of the Central Excise Rules, 2002. The Central Government, by notification, grants rebate paid on excisable goods, if any goods are exported, the same shall be subject to such conditions or limitations and fulfilment of set procedure, as may be specified in the notification.
2.3. Notification No.19/2004/CE(NT) dated 06.09.2004 has been issued in exercise of powers conferred under Rule 18 and has been amended from time to time, prescribing conditions, limitations and procedures for grant of rebate of central excise Page 3 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT duty paid on excisable goods.
2.4. This notification was again amended by Notification No.18/2016/CE(NT) dated 1.03.2016, whereby the Central Government provided that claim of rebate of duty paid on all excisable goods shall be lodged before the expiry of period specified in section 11(B) of the Central Excise Act. One of the documents for filing the rebate claim is shipping bill (export promotion copy) by the Customs Department as provided in paragraph no.13.2 of Chapter VII read with paragraph No.8.3 of Chapter VIII of CBEC of Central Excise Manual.
There was a short shipment to the extent of four bags in the shipping bill No.8696246 dated 27.07.2010, as in 1,60,480 kgs of goods comprising 160 bags. The Customs authority could not generate the shipping bills due to short shipment.
2.5. After exporting the goods, the petitioner vide letter dated 16.08.2010 requested the Deputy/ Assistant Page 4 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT Commissioner of Customs to issue shipment certificate for the goods exported under Shipping Bill No.8696246 dated 27.07.2010 to Ms/. Flex Middle-Easter FZE. After about a period of one year, on 20.08.2011, a shipment certificate was issued certifying that the goods mentioned under the Shipping Bill No.8696246 were exported. 2.6. On the receipt of such certificate on 20.08.2011, a rebate claim bearing No.13032 dated 11.10.2011 for an amount of Rs.8,35,307/- along with all the requisite documents related to Shipping Bill No.8696246 has been filed with respondent No.2. 2.7. Respondent No.2 vide its order dated 22.12.2011 issued deficiency memo-cum-show cause notice providing deficiencies in the rebate claim. It also declared that the rebate claim was time barred and the quantity of goods mentioned in ARE-1 did not tally with the quantities mentioned in the shipping bills. The deficiency memo also sought some more documents.
Page 5 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT 2.8. The petitioner on 29.12.2011 replied to the deficiency memo clarifying on each of the points in detail in respect of the limitation. It emphasized that shipping bill or the export promotion copy was not generated by the Customs Department due to short shipment of the goods and, therefore, there was a delay in filing the rebate claim. 2.9. Vide order No.1750/11-12/Deputy Commissioner( Rebate)/Raigadh dated 11.01.2012, respondent no.2 rejected the rebate claim, essentially, on the point of limitation. He referred to the decisions of the Supreme Court and the High Court, to hold that unless the rebate claim is filed within one year from the date of export of goods, it is not entertainable.
2.10. Paragraphs No.2.4 of paragraph No.2 of Chapter IX of CBEC Manual 2010-11 provides that in case of non-availability of any document, due to any reason, for which the Central Excise and Customs Department would solely be accountable, the Page 6 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT refund claim should be admitted, as the claimant cannot be in a disadvantageous position on account of limitation period, if the fault was not his. It is further the say of the respondent that there is no power conferred upon the Central Excise Officer to condone the delay. Aggrieved petitioner challenged it before the Commissioner (Appeals), where again emphasis was that there was no delay on the part of the petitioner to file a rebate claim, but due to non-availability of export promotion copy of shipping bill /shipment certificate issued by the Customs Department, the petitioner was not in a position to file the rebate claim. The rebate claim has been preferred on 11.10.2011 after the receipt of copy of shipment certificate on 20.08.2011. It has relied on the decision of Cosmonaut Chemicals vs. Union of India , 2009 (233) ELT 46.
2.11. The Commissioner (Appeals), vide its order dated 29.03.2012 No.US/199 to 201/RGD/2012 upheld the order of respondent No.2 by holding that the Page 7 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT department was bound by the statutory time limit under section 11B of the Central Excise Act and the claim being of beyond one year, the same cannot be entertained.
2.12. This had been challenged by preferring the revision application before the Joint Secretary, Government of India, Ministry of Finance under section 35EE of the Central Excise Act by emphasizing that there was no fault on the part of petitioner to file the rebate claim beyond the period of one year. The issue is well covered by the decision of Cosmonaut Chemicals (supra). Alternatively, it has also been submitted that section 11B of the Central Excise Act would not have any applicability in the present case, as the time limit specified under Rule 18 read with notification dated 19/2004, was not applicable to the application made under Rule 18. The revisional authority vide its order dated 30.08.2019 rejected the revision application on the ground of limitation. It also discarded the submission that section 11B Page 8 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT is not applicable for filing the rebate claim, since the order of 30.08.2019 is not appealable. The petitioner is before this Court seeking the following reliefs:
"10. The petitioner, therefore, prays that:
a) This Hon'ble Court be pleased to issue a Writ of Certiorari, or a Writ in the nature of Certiorari or any other appropriate writ, calling for the records of the Order No.18-20/2019- CX(WZ)/ASRA/Mumbai dated 30.08.2019 passed by the Principal Commissioner andEx-Officio Additional Secretary to Government of India (Annexure K) and after going into the legality, validity, and properiety thereof, to quash and set aside the impugned Order dated 30.08.2019 passed by teh Ld. Revisionary Authority (Annexure K);
b) This Hon'ble Court be pleased to issue a Writ of Mandamus, or any other appropriate Writ, Order or direction, directing teh Respondents to sanctyion the Rebate claim along with interest;
c)pending the hearing and final disposal of the Petition, this Hon'ble Court be pleased to direct the Respondents, by themselves, their servants and agents/officers/subordinates to sanction rebate claim with such surety and security as deemed fit by this Hon'ble Court.
d) for ad-interim relief in terms of prayer (c) above;
e)for costs of the Petition and orders thereon; and
f) for such further and other reliefs, as this Hon'ble Court may deem fit and proper in the nature and circumstances of the Page 9 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT case."
3. This Court has heard learned advocate Mr. Hardik Modh for the petitioner, who has urged that one of the two documents, which would be essential before the person who exported the goods to claim rebate from the respondent authority, are (1) the Export Promotion Copy or (2) the Shipment certificate. In the instant case, the event of export of the goods occurred on 02.08.2010 vide shipping bill no.8696246(dated 27.07.2010). He applied for the shipment certificate in less than a month. The Revenue issued the said certificate on 20.08.2011 and the rebate claim was filed by the petitioner on 11.10.2011. He has taken us through the Central Excise Manual of CBEC for shipment instructions and, more particularly, Chapter VII and paragraph No.13.2. According to him, paragraph no.13.2 makes it essential to have the shipment certificate or the proof of export promotion copy. Without either of the documents, it was not feasible to even file the rebate claim with short supply of four bags. Page 10 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT There does not appear to be feasibility of getting export promotion copy. Therefore, the only course open was to submit shipment certificate for the goods exported from India on 02.08.2010. He, therefore, has urged that to deny rebate claim only on the ground of limitation is impermissible under these circumstances.
4. In the alternative submission, he has urged that introduction of time limit was from 01.03.2016, whereas the transactions in question are prior to the said date.
5. Mr. Parth Diveyeshwar, learned Central Government Standing Counsel for the respondents has urged that the period of limitation cannot be overlooked by any authority, therefore, each of them has rightly interpreted and have chosen not to grant the rebate. According to him, section 11B prescribes the statutory limit and Rule 18 is the subordinate legislation and they are interlinked and cannot be looked at separately. He has urged Page 11 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT that all the contentions raised by the petitioner have been duly regarded by the Principal Commissioner , Ex-Officio Additional Secretary to Government of India.
6. According to him, there is no provision under section 11B of the Central Excise Act to condone any delay. Moreover, the applicability of the time limit of one year, according to the respondents, is dealt with by the High Court of Bombay in the case of M/s. Everest Flabour vs. Union of India , (2012) 282 ELT 48. According to him, after detailed discussion on applicability of the period of limitation, all the authorities have given the concurrent versions holding the rebate claim to be clearly time barred.
7. Having thus heard both the sides and also on due consideration of the pleadings and material on record, the short question that needs to be addressed by this Court is as to whether the rebate claim sought by the petitioner is admissible or Page 12 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT whether the same is barred by the law of limitation. The factual matrix mentioned hereinabove have not been disputed. It is also not in dispute that the goods exported is 1,60,480 kgs of polyester chips etc Textile Grade-160 meters, which had been manufactured from the factory located at village: Jolwa; Taluka Palsana, District:
Surat and the same had been cleared with the payment of Central Excise duty. Value of the said goods had been of Rs.81,09,800/- which had been sent from the port of Nava Sheva, JNPT at Raigadh vide Shipping Bill bearing No.8696246 dated 27.07.2010.
8. For claiming any rebate of Central Excise duty paid in excisable goods, Rule 18 of the Central Excise Rules, 2002 is providing the grant of rebate of duty paid on excisable goods, subject to certain conditions or limitations and fulfillment of proceduralities. Rule under the head of "rebate of duty" deserves reproduction at this stage: Page 13 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT
"Rule 18. Rebate of duty.-- Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification."
Explanation.- "Export" includes goods shipped as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft."
9. In exercise of powers conferred under Rule 18 of Central Excise Rules, 2002, the Central Government has issued notification No.19/2004- CE(N.T) dated 16.09.2004, which provides the procedure for presentation of claim for rebate to Central Excise. Worthwhile it would be to reproduce the same:
"3(b) Presentation of claim for rebate to Central Excise:-
(i) Claim of the rebate of duty paid on all excisable goods shall be lodged along with original copy of the application to the Assistant Commissinoner of Central Excise or the Deptuy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, the Maritime Commissiioner;
(ii) The Assistant Commissioner of
Central Excise or the Deputy
Commissioner of Central Excise of Central Excise having jurisdiction over the factory Page 14 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT of manufacture or warehouse or, as the case may be, Maritime Commissioner of Central Excise shall compare the duplicate copy of application received from the officer of customs with the original copy receivd from the exporter and with the triplicate copy received from the Central Excise Officer and if satisfied that the claim is in order, he shall sanction the rebate either in whole or in part.
(c) Claim of rebate by electronic declaration:- An exporter may enter the requisite information in the shipping bill filed at such place of export, as may be specified by the Board, for claiming rebate by electronic declaration on Electronic Data Inter-change system of Customs.
The details of the corresponding application shall be entered into the Electronic Data Inter-change system of Customs upon arrival of the goods in the Customs area. After goods are exported or order under Section 51 of the Customs Act, 1961 (2 of 1962) has been issued, the rebate of excise duty shall, if the claim is found in order, be sanctioned and disbursed by the Assistant Commissioner of Customs or the Deputy Commissioner of Customs."
10. This has been amended vide Notification No.18 of 2016 CE(NT) 01.03.2016, whereby the Central Government provided that the claim of rebate of duty paid on all excisable goods shall be lodged before the export of the period specified in section 11B of the Central Excise Act. Therefore, the Notification no.19 of 2004:Central Excise (NT), Page 15 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT particularly, 3(b)(i) shall be read as thus:
"3(b) Presentation of claim for rebate to Central Excise:-
(i) Claim of the rebate of duty paid on all excisable goods shll be lodged before the expiry of the period specified in Section 11B of the Central Excise Act, 1944 along with the original copy of the application to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, the Maritime Commissioner;"
11. Thus, the Central Government has specifically provided by way of the amendment in the year 2016 from 01.03.2016 that the claim of rebate of duty paid on all excisable goods shall be lodged before the expiry of the period specified under section 11B of the Central Excise Act and the same shall be done along with the original copy of application to the Assistant Commissioner, Central Excise, having jurisdiction over the factory of manufacture or warehouse or before the Maritime Commissioner as the case may be.
11.1. It is also to be noted that for filing the rebate claim, there are certain documents, which are a Page 16 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT must and one of them is the Shipping Bill (Export Promotion copy) duly endorsed by the Customs Department, as provided in Paragraph No.13.02 and Chapter VII read with Paragraph No.8.3. Chapter VIII of CBEC, Central Excise Manual. It is not in dispute that there was a short shipment to the extent of four bags so far as Shipping Bill No.8696246 dated 27.07.2010 is concerned. Admittedly, there were only 160 bags comprising of 160,480 kgs of goods instead of 164 bags, which were needed for the purpose of export promotion copy comprising of 164,492 kgs of bags. The Customs Authorities, therefore, were unable to generate and could not have generated shipping bill or export promotion copy. This short shipment had caused impediment for the authority concerned to issue export promotion copy. It is not in any ones hands to do it, as unless the requisite quantity of goods are exported, the Customs Authority would not be generating the shipping bill (export promotion copy).
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12. Therefore, after the expiry of the period, the petitioner, vide its letter dated 16.08.2010, made a request to the Deputy/Assistant Commissioner of Customs to issue the shipment certificate for the goods exported under the shipping bill No.8696246 dated 27.07.2010 to M/s. Flex Middle-Easter FZE.
13. As mentioned hereinabove, in absence of the shipping bill or the export promotion copy, the issuance of the shipment certificate as a proof for the goods to have been exported was a must and the request of the same was already made for the shipment, which was made on 27.07.2010 in less than four weeks i.e. on 16.08.2010 and this copy of shipment certificate was issued on 20.08.2011 certifying the fact of the goods having been shipped under the shipping bill No.8696246. In other words, this shipment certificate dated 20.08.2011 is a proof of shipment which has been made by the petitioner and that fact has also not been questioned or challenged by the respondent authority.
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14. The rebate claim is preferred by the petitioner bearing No.13032 addressed to the Assistant Commissioner of Central Excise on 11.10.2011. Letter addressed to the Assistant Commissioner indicates that since there was a short shipment of four bags, the Customs Department was unable to generate the Export Promotion Copy and on receipt of the shipment certificate, the rebate claim has been preferred. In reply to the same, rejection has come on the ground that the claim under section 11B has become time barred as the same has been filed after the stipulated period of one year of the date of shipment. It also provides that quantity of 164000 kgs of goods mentioned in ARE-1 does not tally with the quantity of 4000 kgs mentioned in the Shipping Bill No.8712231 dated 30.07.2010 and assessable value of Rs.8,10,980/- is more than FOB value of Rs.1,96,420/- mentioned in the shipping bill. He further says that the proof of duty payment was not produced with the claim and the bank realization certificate is also not adduced. Page 19 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT Hence, written reply was directed to be sent in 10 days' time from the date of receipt of this deficiency-cum-show cause notice call for personal hearing. The personal hearing was scheduled on 3rd, 4th & 5th January, 2012 before the office of the Maritime Commissioner.
14.1. In answer to the same, on 29.12.2011, the petitioner made a mention of short shipment of four bags and reiterated that the Customs Department could not generate the export promotion copy. However, the release of Shipment Certificate was on 20.08.2011 to the CHA. Therefore, the request was made to condone the delay on the ground that shipment was done within six months from the date of clearance of goods from the factory. The export promotion copy could not be submitted, as the same was not generated by the Customs Department. It also said that later on, on 30.07.2010, four bags had been shipped. Copies of shipment certificate for shipping bill No.8696246 dated 27.07.2010 and Shipping Page 20 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT Bill No.8712231 dated 30.07.2010 have been enclosed. It also gave details of assessed value and FOB value to urge that total difference is only of Rs.64,400 between assessable value and FOB value. It is further submitted that excise duty has been paid on finished goods on CIF value instead of FOB value on Mumbai Port. Thus, there is an excess payment of duty on the freight and insurance element. It is further stated that rebate claim under Rule 18 is already preferred and the excise duty has been paid. Therefore, it is not the case of the department that something more is being claimed than what is actually paid. If the duty has been paid in excess than what should have been paid after granting the rebate, the correctness of the assessment can also be scrutinized and wherever necessary, action should be taken accordingly.
15. It, therefore, has urged that the rebate claim should be allowed saying that the respondents contend that the filing of the rebate claim is time Page 21 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT barred in terms of section 11B. However, in the given set of facts, recredit of duty paid on the finished goods needs to be provided and moreover, what is vital is the date of 01.03.2016 when this applicability has come and hence also, the period of limitation would have no role.
16. The Deputy Commissioner (Rebate) passed an order after briefly stating the facts vide its order dated 13.01.2012. According to him, there is no dispute about submissions of the rebate claim after export on completion of stipulated period of one year prescribed under section 11B of the Act. The law, according to him, is well settled by decision of the the Apex Court rendered in the case of Miles India Limited vs/ CCE, 1987(3) ELT 641(S.C), where the Court has held that the appellate Tribunal as well as the Customs Authority are bound by the statutory period of limitation. The Tribunal has emphasized that the time limit of one year has to be reckoned from the date of shipment i.e. date on which consignment is shipped out from Page 22 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT seller's place or warehouse. The Tribunal referred to Chapter XI of CBEC Manual 2001-02, which deals with refund, in case of non-availability of any document due to any reason, which the Central Excise or the Customs Department is solely accountable, the claim may be admitted so that the claimant is not in a disadvantageous position with respect to limitation period. It has been interpreted that the exporter should have filed rebate claim, as per the provisions of the CBEC Manual 2001-02 and in similar situation, the case of Exclusive Steel Pvt. Ltd. reported in 2011 (267) ELT 586 is referred to, where the Court has stated that even if the relevant documents are not available with the petitioner company, it could have filed the application without relevant documents, which the department was bound to receive so that the refund is not hit by limitation period. As the rebate claim is not filed within the period of one year along with available documents, which were already in his possession, relying on also the the Page 23 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT decision of CESTAT in the case of Precision Controls vs. CCE Chennai, 2004(176) ELT 147(Tri-Chennai), it held that there is no discretion or equitable jurisdiction to allow rebate claim dehors the limitation as per the provisions of section 11B, accordingly, it has been rejected.
17. Office of the Commissioner of Central Excise, Mumbai also confirmed the same. It referred to the Supreme Court decision in the case of Union of India vs. Jalyan Udyog, 1993(68) ELT 9 (SC), which says that the exemption granted may be an absolute and/or subject to such conditions, as may be specified in the notification and further that the condition specified may relate to a stage before clearance of goods or to a stage subsequent to the clearance of goods to hold that the manufacturer was bound to avail section 5A (1)(a) and did not have option to pay the duty under Notification No.59 of 2008. It also further held that Notification No.30 of 2004 dated 09.07.2004 is a conditional Notification and nothing in this Page 24 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT Notification would apply to the goods in respect of which, credit on duty on inputs had been taken under the provisions of the CENVAT Credit Rules, 2004. The appellant, in fact, had taken CENVAT Credit on input used in the manufacture of exported goods as declared on the ARE-1 and had cleared goods on payment of duty vide Notification No.5 of 2006 dated 01.03.2006. According to the appellate authority, when the condition of notification was not satisfied, there was no way the appellant could have availed the exemption. It also clearly in connection with the issue of limitation held that it has been reiteratively emphasized by the authorities that the appellate Tribunals as well as Customs Authorities are bound by the statutory period of limitation. The case of the petitioner that the Customs did not generate the export promotion copy of the shipping bill due to short shipment and the issuance of the Shipment Certificate in lieu of the shipping bill to their CHA on 20.08.2011 and, therefore, late filing of the rebate claim is rightly Page 25 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT rejected by the adjudicating authority as time barred. The assessee is bound by the four corners of the statute and the period of limitation prescribed by the Central Excise Act and Rules framed thereunder must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act.
18. This was challenged under section 35EE of the Central Excise Act before the revisional authority. The Revisional Authority held that the applicant's contention that Rule 18 of the Central Excise Rules, 2002 does not prescribe the period of limitation of one year and section 11B of the Central Excise Act, is not relevant for the rebate of duty is not a legally tenable proposition, since for the refund and rebates of duty, section 11B of the Central Excise Act is the statutory provision directly dealing with the issue. According to the Revisional Authority, in addition to the time limit set out under section 11B, there are other substantive and permanent provisions, which the Page 26 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT authority has to deal with while considering the issue of refund or rebate claim. The principle of undue enrichment and method of payment of rebate of duty are also prescribed under section 11B only. It further held that Rule 18 is a piece of subordinate legislation made by the Central Government in exercise of powers given under the Central Excise Act. It further prescribes conditions and limitations for granting rebate of duty by issuing notification which by all means a subordinate legislation. The basic feature and condition already stipulated in section 11B in relation to the rebate of duty need not be repeated in the said rule and the areas, over and above already covered in section 11B have been left to the Central Government for regularization from time to time. Therefore, there shall need to be a combined reading of both, section 11B and Rule 18 and it cannot be contemplated that Rule 18 is independent of section 11B, as there is an express provision of one year under section 11B and as per Page 27 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT this provision, the refund includes the rebate of duty. The condition of filing the rebate claim within one year is squarely applicable to the rebate of duty. When dealt with by Assistant Commissioner or the Deputy Commissioner for revision under Rule 18, these two provisions being section 11B and Rule 18 are interlinked and Rule 18 simply can not be dealt with in isolation.
19. So far as paragraph No.2.4 of Chapter of CBEC Excise Manual of Supplementary Instructions is concerned, the same has been referred to by holding that if no document is available for which Central Excise or Customs Department is accountable, the claim is permissible to be received so that the claim is not hit by limitation period. The Government if finds that the applicant was required to file rebate claim within one year, then even without the copy of shipping bill, so as to avoid the rebate claim getting time barred and to take appropriate care to comply with the statutory time limit the same requires acceptance. The Page 28 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT Revisional Authority has also sought to rely upon the decision of Bombay High Court rendered in the case of M/s. Everest Flavour vs. Union of India, 2012(282) ELT 48. However, it has chosen not to rely on the decision of Madras High Court in the case of Union of India vs. M/s. Dorcas Market makers Pvt. Ltd. , 2015(321) ELT 45 (Madras) and it also tried to refer to the decision of Apex Court rendered in the case of Union of India vs. Kirloskar Pneumatics Company, 1996 (84) ELT 401 (SC) to hold that the High Court under the writ jurisdiction cannot direct the Customs Authorities to ignore the time limit prescribed under section 27 of the Customs Act, 1962 even though the High Court itself may be bound by the time limit of the said provision. The Customs Authority, which is a creator of Customs Act, cannot be directed to ignore the provision of section 27 of the Customs Act and, accordingly, it has not entertained the refund and upheld the order in appeal.
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20. Apt would be refer to the decision of Ajni Interiors vs Union of India and others passed by this Court in Special Civil Application No. 10435 of 2018, which was a case of refund of pre- deposits with interest. The petitioner Ajni Interiors was a proprietorship concerned, which changed to Private Limited Company and functioned in the name and style of M/s.Ajni Interiors then, M/s.Ajni Clean Rooms Pvt. Ltd. (now known as, M/s.Ajni Industries Pvt. Ltd.).. On an intelligence received by the Head Quarter officer of the Preventive Section of the Excise Department that the petitioner was indulging in evasion of the Central Excise duty, the team of Central Excise Officers visited the premises and during the course of investigation, the petitioner deposited 15 lakhs. This difference in duty was on deposit and not on duty confirmed during the investigation. Thereafter, the show cause notice was issued for the recovery of the Central Excise duty with demand of interest and imposition of penalty. The Superintendent Central Page 30 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT Excise and Customs ( Range-III) directed the petitioner to pay further pre-deposit amount of Rs.3,32,076/-, the same had been deposited and, accordingly, the total amount deposited was Rs.18.32 lakhs (rounded off).
20.1. After the show cause notice was issued, the matter was adjudicated by the Commissioner, Central Excise (Customs) and the order thereafter was carried in appeal before the CESTAT, which allowed the appeal.
20.2. The department challenged the order before the Apex Court, which when was not entertained, it filed the review application, which was also dismissed.
21. After receipt of the order of the Apex Court, the Revisional Central Excise Authority was addressed a letter by the petitioner for claim of refund of Rs.18,32,676/- on the ground of this being pre- deposit/deposit made by the petitioner during the Page 31 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT investigation. The show cause notice was issued to the petitioner as to why the refund claim should not be rejected as the claim was beyond the period of limitation. The say of petitioner was to an effect that his is a case of return of pre-deposit and of the Central Excise duty paid by the petitioner on any excisable goods and for such return of pre-deposit the petitioner is not required to file any formal refund claim under section 11B of the Central Excise Act, it had, therefore, also questioned the show cause notice.
21.1. The entire refund claim was rejected being time barred. The petitioner preferred before the Commissioner, which also rejected and the matter was carried to CESTAT, which dismissed the appeal, upholding both the orders.
22. This Court, at length, considered section 11B of the Act to hold that the person claiming refund of excise duty and interest, has to make an application for refund of such duty and interest to Page 32 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT the authority enumerated therein before the expiry of one year from the relevant date in such form and manner as may be prescribed.
22.1. The relevant date is defined in Explanation (A) and Explanation (B). The date on which the Tribunal allowed the appeal preferred by the petitioner which in the case before the High Court was 07.08.2007 and hence, therefore, within one year from the date of allowing the appeal by the Tribunal, the petitioner needed to prefer the claim for refund of excise duty in a prescribed form. 22.2. The Court held that the payment made by the petitioner was towards the excise duty without protest and that can never be considered as pre- deposit. If any payment is made as the pre- condition for exercise of the statutory right, it can be termed as pre-deposit. However, it cannot be equated with voluntary deposit of excise duty paid even during the course of investigation and prior to show cause notice or adjudication, to assert that it Page 33 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT is pre-deposit of payment of duty, which was intended to prevent the incidence of interest and liability accruing from the non-payment of duty and, hence, it cannot be termed as deposit. The Court held that payment made by the petitioner towards excise duty can never partake the character of pre-deposit, as mentioned in section 35F of the Act. Therefore, contention that the amounts were paid involuntarily and, therefore, are deemed to be under protest and should be considered as deposits needed to be rejected. The payments have been made in the nature of Central Excise duty. They were not considered akin to or in the nature of pre-deposit, as contemplated under section 35F of the Act, nor was there anything to indicate that the payment was made under protest and hence, the submission that second proviso of sub-section(1) of section 11B of the Act, which provides that limitation of one year was not applied, where duty and interest, if any, paid on such duty has been made under protest, the Court Page 34 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT further held that the payments made by the petitioner were in the nature of excise duty and were not deposits. Therefore, the provision of section 11B of the Act would be attracted. The amount, in question, since had not been deposited under protest, according to the Court, the petitioner would not be liable to file the claim beyond the period of limitation. Thus, since the refund claim had not been filed within the prescribed period of limitation, the Court held that the Tribunal was justified in rejecting the claim. This was challenged before the Apex Court and the Court, after condoning the delay, did not interfere with the order of the High Court in Special Leave Petition (Civil) Diary no.3952 of 2020 in its order dated 20.02.2020.
22.3. In the decision of Ajni Interiors (supra), of course, this High Court has held that once the amount is paid by way of excise duty and not as a pre-deposit and not even under protest, the period of limitation under section 11B of the Act would Page 35 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT apply in case of any refund claim. This decision in the instant case is not to be applied by this Court, as there are other decisions, which will need to be taken into consideration. Undoubtedly, the amount paid by the petitioner herein is not the pre-deposit. It is a rebate claim for the duty paid for export made. It is not even the case of the petitioner that it is either pre-deposit or it is a pre-deposit made under protest.
23. The petitioner has taken a specific stand that Rule 18 shall need to be regarded independent of section 11B and for so doing it has relied on the decision of the Madras High Court and Punjab & Haryana High Court, which both have relied on the decision of the Apex Court and has chosen not to follow the Bombay High Court in this regard. It has also sought to rely on various Notifications of the CBEC Central Excise Manual.
24. Apt would be to refer to, at this stage, not only section 11B of the Act, but also Rule 18 of the Page 36 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT Central Excise Rules, which has been reproduced hereinabove and notifications viz. Notification NO.41, Notification No.94-CE(NT) dated 12.09.1994 and Notification NO.19/2004 CE(NT) dated 06.09.2004 issued by the Central Government both under Rule 18 as well as Notification No.18/2016 CE(NT) dated 01.03.2016, which amended Notification No.19 of 2004.
25. Necessary would it be also to refer to Chapter VIII and Chapter IX of the CBEC Central Excise Manual, which speak of export under claim for rebate and export under claim for refund respectively. Notification No.41 of 1994 is issued by the Central Government in exercise of powers conferred by Clause A of Sub-Rule 1 of Rule 12 of the Central Excise Rules 1994, which directs the rebate of duty paid on the excisable goods, as specified in table annexed and the same can be claimed on exportation of goods out of India and in any country, except Nepal and Bhutan to the exception specified in Column No.3. Proviso gives Page 37 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT details as to when; (1) excisable goods shall be exported after payment of duty directly from a factory or warehouse and (2) when they are exported by the exporter in accordance with the procedure set out in Chapter IX of the Central Excise Rules, 1944, (3) they are to be exported within six months from the date on which they were cleared for export from the factory of manufacturer or warehoue or within such extended period, as the Collector of Central Excise may, in a particular case, allow; (4) the claim or the supplementary claim for rebate of duty is lodged with maritime Collector of Central Excise or Collector of Central Excise having jurisdiction of either the factory of manufacture or warehouse, as mentioned in the relevant export documents together with the proof of duty of exportation within the time limit specified in sub-section 11B of the Central Excise Act and (5) Market price of the excisable goods, at the time of exportation, in the opinion of the Collector of Central Excise, be Page 38 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT not less than the amount of rebate of duty claimed. The rebate of duty is not admissible, if it is less than Rs.500/-. The exporter also is to undertake refund of rebate of duty erroneously paid to the Collector of Central Excise sanctioning such rebate in accordance with the provisions of section 11A of the Central Excise Act and, if the excisable goods are not exported or the if the proof of export thereof is not furnished to the satisfaction of the Collector of Central Excise or the Maritime Collector of Central Excise in the manner and within the prescribed time limit, on an application being made by the exporter, the Collector also has the powers to cancel the export documents. It further provides that rebate of duty paid on those excisable goods, which are prescribed under any law for the time being in force shall not be made. The duty means the duties of excise collected under the Central Excise Act, mineral product and additional duties of Excise Act, additional duties of excise (textiles exports) special excise duty collected under the Page 39 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT Finance Act.
26. By way of Notification No.18 of 2016 dated 01.03.2016 certain amendments in the Notification No.19 of 2004 dated 06.09.2004 have been made in the following manner.
"(2) under heading "(3) Procedures", in paragraph (b), in sub-paragraph(i), after the words "shall be lodged". The words, figures, letter and brackets "before the expiry of the period specified in section 11B of Central Excise Act, 1944(1 of 1944)" shall be inserted."
27. Section 11B in this notification the words have been that the claim shall be lodged before the export of the period specified in sub-section 11 B of the Central Excise Act. This has come into effect from 01.03.2016.
28. Chapter VIII under the heading of "Export under the claim for rebate" provides for condition and procedure relating to export under claim of rebate as contained in Notification No.19 of 2004 dated 06.09.2004 and Notification No.20 of 2004 dated Page 40 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT 06.09.2004 issued under Rule 18 of the Central Excise Rules. It also specifies that the term "refund" in section 11B of the Central Excise Act, includes rebate of duty of excise on excisable goods exported out of India or on excisable goods used in the manufacture of goods, which are exported out of India. Thus, the procedure prescribed and specified in the said rules and notification are made subject to section 11B of the Act.
29. It is needed to be noted that the procedure prescribes presentation of the refund claim, which states that any person, who deems himself entitled to refund of any duty or excise or other duties or he has been informed by the Department that the refund is due to him, shall present the claim in proper format along with all relevant documents supporting his claim and also the copies of documents supporting his declaration that he has not passed on duty in incidence.
30. Paragraph No.2.4 provides clearly and particularly Page 41 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT that it may not be possible to scrutinize the claim without accompanying documents and decide about its admissibility. If the claim is filed without requisite document, it may lead to delay in sanctioning of the refund. Moreover, the claimant of refund becomes entitled for interest in case refund is not given within three months of the filing of the claim. Therefore, the submission of refund claim without supporting documents will not be allowed, even if the claim is filed by post or some similar mode. The claim should be rejected or returned with query memo depending on the nature and importance of document not filed and the claim shall be taken as admissible only when all relevant documents are available. In case, any document is not available, for which the Central Excise of Customs Department is solely accountable, the claim may be received so that the claimant is not hit by limitation period. Under the Heading of "Scrutiny of Refund and Claim Sanction", it further provides that Divisional Office Page 42 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT will scrutinize the claim in consultation with Range Officer, where necessary check with refund claim application is complete and is received with all the relevant documents. This should be done at the time of receipt of refund claim and in case of deficiency, the same to be pointed out to the applicant with a copy to the Range Officer within 15 days of the receipt. Undoubtedly, Paragraph No.2.4 provides that if any document is not available for which the Central Excise or the Customs Department is solely accountable, the claim may be received so that the claimant is not hit by limitation period. It is not out of place to make a specific mention that words added in the Notification no.18 of 2016 dated 01.03.2016 that the claim "shall be lodged", before the expiry of period specified in section 11B of the Central Excise Act, 1944, are from 01.03.2016. The claim, in the instant case, is of the year 2011.
31. Reference would be needed of Paragraph No.13.2 of Chapter VII read with Paragraph No.8.3 of Chapter Page 43 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT VIII of the CBEC Excise Manual, which provide for the documents necessary for filing the claim of rebate.
32. Paragraph No.8.3 reads as under:
" 8.3 The following documents shall be required for filing claim of rebate:
(i) A request on the letterhead of the exporter containing claimof rebate, A.R.E 1 number and dates, corresponding invoice numbers and dates amount of rebate on each A.R.E 1 and its calculations,
(ii) original copy of the A.R.E. 1,
(iii) INVOICE ISSUED UNDER RULE 11,
(iv) self attested copy of shipping Bill, and
(v) self attested copy of Bill of Lading.
(vi) Disclaimer Certificate [in case where claimant is other than exporter]."
33. Thus, what makes it clear on reading the requirement of these paragraphs of CBEC Manual that they insist on specified documents, one of which is a shipping bill for the sanction of the claim for rebate. On overall reading of all these necessary conditions reveal that the incomplete claim would not be tenable as there is a specific emphasized for sanction of claim for rebate by the Central Excise Department.
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34. It also provides for acceptance of application for rebate when requisite document is unavailable due to non-action or non-doing on the part of the department so that the interest may not need to be paid and the period of limitation does not affect adversely the party. Thus, self-attested copy of the shipping bill was unavailable, as there was a short- shipment to the extent of four begs in relation to the Shipping Bill No.8696246 dated 27.07.2010 and, therefore, the Customs authorities on a request had issued a shipment certificate on 20.08.2011.
35. Rule 18 speaks of rebate of duties for any goods exported by Notification of the Central Government for the duty paid on excisable goods or duty paid on material used in the manufacture for processing of such goods, subject to such conditions and limitations and fulfilment of such procedure, as may be specified in the notification. If one looks at Notification No.19 of 2004 and amended from time to time, the same prescribed conditions, limitations Page 45 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT and procedures for rebate on duty paid on excisable goods.
36. As the Notification No.18 of 2016 CE(NT) was amended by Notification No.19 of 2004 from 01.03.2016 ,the decisions of the Madras High Court and Punjab & Haryana High Court relying on the decision of the Apex Court in the case of Collector of Central Excise, Jaipur vs. Raghuvar (India) Limited , 2000(118) ELT 311(SC) shall need to be regarded where the issue was identical. The Apex Court was deciding the time limit stipulated under section 11A of the Central Excise Act where some Modvat could be made applicable in the recovery of the credit under section 57(1) of the Central Excise Rules, which did not have any reference to section 11A and the Court held that the time limit of section 11A would have no applicability under Rule 57(1), which is a specific provision in absence of any reference of section 11A in the Rule.
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37. Apt would be to refer to the decision of this Court in Cosmonaut Chemicals (supra), where the rebate claim was filed beyond the time limit of one year on the ground of export promotion copy of the shipping bill provided by the Customs Department belatedly. The Court referred to the Shipping Bill Manual of Supplementary Instructions, which indicates that the refund or rebate claim deficiency, in any manner, shall be admitted without delay, even if the non-availability of documents are attributable to department. The statutory provisions, if are not providing for admission of claim when documents are not available, what weighed with the Court is that the Authorities cannot be asked to accept deficient claim and the same is needed to be accompanied by requisite documents in case of any assessee who has exported duty paid goods. Therefore, such claim is not to be rejected on the ground of limitation, when delay is on the part of Custom Authorities in providing copy of the shipping bill Page 47 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT bearing endorsement.
37.1. Relevant paragraphs of findings and observations are reproduced as under:
"9. On a plain reading of the aforesaid provision it can be seen that the section provides for making a claim for refund of duty (which includes rebate of duty) but such a claim has to be made before the expiry of one year from the relevant date. The application has to be in the form and manner as prescribed and the application shall be accompanied by such documentary or other evidence which will enable the applicant to establish that the amount of duty of excise in relation to which such refund/rebate is claimed was collected from, or paid by, the claimant and the incidence of such duty had not been passed on to any other person. In so far as the incidence of duty being passed over it is clear that the same is not required to be considered, as in relation to a claim for rebate, under the Proviso below sub-section (2) of section 11B of the Act vide clause (a) of the Proviso rebate of duty of excise on excisable goods exported out of India or inputs which have borne duty of excise having been used in manufacture of goods which are exported out of India the assessee becomes entitled, provided the application is in accordance with the prescription, viz. in form and manner and is accompanied by relevant documents.
10. In this context one has to keep in mind as to why the provision prescribes attachment of documents to such rebate claim. The object of the said requirement, simply stated, is nothing else but cross Page 48 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT verification of the fact that :(1) the goods are exported outside India, and (2) such goods are duty paid goods. That is why the requirement of the Rules to obtain endorsement from the Customs officials on the shipping bills under which the goods have been exported.
11. The Central Board of Excise and Customs, in exercise of its delegated legislation, has framed the Manual of Supplementary Instructions. In Chapter 1 Part 1 of the said CBEC Manual the scope of the Manual has been explained. Paragraph No.1.1 indicates that the instructions are supplemental to, and must be read in conjunction with the Act and the Rules. Paragraph No.2 makes it clear that the Manual is a public document and is made available to all interested persons. On a conjoint reading of paragraph Nos.1.1 & 1.2 of the Manual it is also apparent that instructions therein are applicable throughout India and Officers of Central Excise Department are not entitled to depart therefrom, without previous approval of the Commissioner, who in turn is required to obtain sanction from CBEC for such deviation.
12. Chapter IX of the CBEC Manual 2001- 02 deals with REFUND and paragraph No.2 deals with Presentation of refund claim. Sub-paragraph No.2.4 of said paragraph No.2 deals with the subject matter of controversy and reads as under :
?S2.4 It may not be possible to scrutinise the claim without the accompanying documents and decide about its admissibility. If the claim is filed without requisite documents, it may lead to delay in sanction of the refund. Moreover, the claimant of refund is entitled for interest Page 49 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT in case refund is not given within three months of the filing of claim. Incomplete claim will not be in the interest of the Department. Consequently, submission of refund claim without supporting documents will not be allowed. Even if claim is filed by post or similar mode, the claim should be rejected or returned with Query Memo (depending upon the nature/importance of document not filed). The claim shall be taken as filed only when all relevant documents are available. In case of non-availability of any document due to reasons for which the Central Excise or Customs Department is solely accountable, the claim may be admitted so that the claimant is not in disadvantageous position with respect to limitation period.
13. It is the last sentence of the aforesaid sub-paragraph which has generated the present controversy. The case of the petitioner is that the said sentence viz.
commencing with the words in case of nonavailability of any document and ending with the words with respect to limitation period indicates that the normal rule that a claim application should be accompanied by requisite documents within the period of limitation has been modified so as to ensure that an assessee is not put to disadvantage only because of lapse or laxity on part of the Officers of Central Excise Department or the Customs Department. On the other hand the principal thrust of respondent authority, based on interpretation of the very sentence, is that the said sentence stipulates an exception to the effect that where, in a case, the claim is not accompanied by documents, and such deficiency is on account of non supply of the requisite documents by the Officers of the Department a deficient claim has to be Page 50 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT made within the period of limitation prescribed and such a claim shall be considered as and when the deficiency is removed by supplying relevant documents at a subsequent point of time.
14. When one reads entire sub-paragraph No.2.4 as a whole it is not possible to accept the stand adopted by the respondent authority. The text of the said sub-paragraph and the language employed therein would indicate that an assessee cannot claim refund/rebate when the application is incomplete in any manner whatsoever. In fact the submission of a claim without supporting documents will not be allowed, that is the mandate to the officer who is entitled to receive and scrutinise such a claim. It is further provided that in a case where an assessee files the claim by sending the same through post or by adopting a similar mode viz. a mode other than personal presentation, the claim is required to be rejected or returned with a query memorandum depending upon the nature or importance of document not accompanying the claim. It is further provided that the claim shall be taken as filed only when all the relevant documents are available.
15. The last sentence in the said sub- paragraph provides for a situation where a claimant is not in a position to make a claim due to non availability of documents for the reason that such documents are not available because Central Excise Department or the Customs Department is solely accountable for such deficiency, i.e. non availability of the requisite documents, then it is stated that the claim may be admitted so that the claimant is not put in a disadvantageous position with respect to limitation period. The aforesaid sentence uses the word "admit" Page 51 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT and the last part uses the phrase with respect to limitation period". The use of the aforesaid terms are significant and indicative. On reading of the entire sub- paragraph No.2.4 it becomes clear that a claim which is deficient in any manner shall not be taken as filed (emphasis supplied) and shall be taken as filed only when all relevant documents are available. As against that the latter part talks of the claim being admitted with respect to limitation period. The legislature has not stated that claim may be admitted so that the claimant is not put in a disadvantageous position within the limitation period, but the words used are with respect to limitation period. In other words, the intention that flows from a plain reading of the language employed is that an exception is provided for in cases where a claim application cannot be tendered for want of requisite documents and such lapse is on account of nonavailability of such documents due to the department being solely accountable. In such circumstances, an assessee cannot be put to disadvantage by asking the assessee to tender a deficient claim within the period of limitation and simultaneously treat the claim as not having been filed till the point of time all relevant documents are available.
16. Aforesaid interpretation derives support from the earlier part of the same sub-paragraph wherein it is provided that if a claim is not processed and refund is not granted within a period of three months a claimant may become entitled to interest on the refund and hence, such incomplete claim will not be in the interest of the department. In fact, as noticed hereinbefore, submission of refund claim without supporting documents is prohibited.
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17. There is one more aspect of the matter. Chapter 8 of the CBEC Manual is EXPORT UNDER CLAIM FOR REBATE.
Paragraph No.8 of the said Chapter pertains to Sanction of claim for rebate by Central Excise. Sub-paragraph No.8.4 reads as under :
?S8.4. After satisfying himself that the goods cleared for export under the relevant A.R.E.1 applications mentioned in the claim were actually exported, as evident by the original and duplicate copies of A.R.E.1 duly certified by Customs, and that the goods are of 'duty- paid' character as certified on the triplicate copy of A.R.E.1 received from the jurisdictional Superintendent of Central Excise (Range Office), the rebate sanctioning authority will sanction the rebate, in part or full. In case of any reduction or rejection of the claim, an opportunity shall be provided to the exporter to explain the case and a reasoned order shall be issued". 17.1 As noted hereinbefore, the claim for rebate is in relation to excise duty paid on the goods which are exported outside India. When one reads the requirement of shipping bill being endorsed by the Customs authorities evidencing the physical export of goods which are duty paid it becomes clear that the entire scheme is an integrated scheme to promote exports. In fact the endorsement requirement itself stipulates endorsement of a copy of shipping bill by use of the phrase 'export promotion'. Thus an interpretation which advances the object of the scheme has to be preferred as against a construction which militates against the scheme.
18. As noticed hereinbefore, provisions of Section 11B of the Act stipulate that a Page 53 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT claim has to be accompanied by requisite documents, requisite documents in case of an assessee who has exported duty paid goods being copy of shipping bill duly endorsed by the Customs Authorities.
Hence, if the Customs Authorities delay parting with a copy of shipping bill bearing necessary endorsement, an assessee cannot be put to disadvantage on the ground of limitation when the assessee is not in a position to make a claim without accompanying documents.
19. The position in law is well settled that any procedure prescribed by a subsidiary legislation has to be in aid of justice and procedural requirements cannot be read so as to defeat the cause of justice. In the present case obtaining of an endorsed copy of shipping bill is primarily a procedural requirement and such procedure is not within the control of claimant assessee.
20. Thus, considering the matter from any angle it becomes apparent that the interpretation placed by Revenue on provisions of Section 11B of the Act read with paragraph No.2.4 of the CBEC Manual cannot be accepted the same being contrary to the object and purpose of the scheme. It cannot be held that the petitioner was at fault in making the claim belatedly, because in fact the period of limitation has to be considered in light of availability of the requisite documents i.e. from the said point of time.
21. The view adopted by the Revisional Authority that a departmental authority is bound by the prescribed period of limitation and cannot condone any delay also does not merit acceptance in light of what is stated hereinbefore. The Adjudicating Authority and the Revisional Authority have read the period of Page 54 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT limitation divorced from sub-paragraph No.2.4 of the CBEC Manual which has provided for a circumstance to mitigate the unwarranted hardship resulting from reading the provision of limitation in absolute terms. In other words, howsoever limited, an exception has been carved out in cases where the delay has occurred due to circumstances beyond control of the claimant assessee. In other words, in a case where the so called delay is on account of the lapse on part of the Central Excise Department or the Customs Department.
22. It is necessary to state and clarify here that mitigating circumstance as flowing from the aforesaid legislative scheme is one and one only viz. where the lapse as to nonavailability of requisite document is on account of Central Excise Department or Customs Department. The legislative scheme does not provide for any other exception or mitigating factor and in the circumstances on a conjoint reading of the provision and the instructions in the CBEC Manual there can be no other circumstance under which a claimant would be entitled to prefer a claim beyond the statutorily prescribed period of limitation."
38. In the instant case, in view of the well settled position of law that the procedural requirement cannot defeat the substantial right of the party ,as in absence of shipping bill, insistence on the shipment certificate was inevitable. Therefore, obtaining of the shipment certificate was the very fundamental requirement on the part of the petitioner. Soon after getting the copy of the Page 55 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT shipment certificate, it has chosen to file the rebate claim with all requisite documents and, therefore, the same ought not to have been rejected on the ground of limitation. The view adopted by the Revisional Authority of the department of being bound by the period of limitation, despite there being a specific provision of paragraph No.2.4 of the CBEC Manual, which is a circumstance as held by the Court in Cosmonaut Chemicals (supra) to mitigate an warranted hardship resulting from reading the provision of limitation in absolute terms.
39. Even while considering the provision of acceptance of claim by the Authority when sole responsibility of supply of document is of the department, the fact remains that overall requirement is of furnishing of particular documents and in absence thereof, to deny the entertainment of such rebate claim and, therefore, waiting for the shipping bill to be delivered by the department cannot in any manner be held against the petitioner. More so, when the amendment has come on 01.03.2016 by way of Notification No.18 of and the claim is of the year 2010 and, therefore also, this being a subsequent change applying the period of limitation of one year at a later date; the decision of Page 56 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021 C/SCA/23348/2019 CAV JUDGMENT Cosmonaut Chemicals (supra) and also of other High Court as discussed above would need to be regarded.
40. Order No.18-20/2019-CX(WZ)/ASRA/Mumbai dated 30.08.2019, whereby the claim of the petitioner has been rejected on the ground of being barred by the law of limitation under section 11B of the Act is quashed and set aside. The petition is allowed accordingly. Let the rebate claim be processed and sanctioned by the authority concerned within 12 weeks from the date of receipt of the copy of this order in accordance with law.
(MS. SONIA GOKANI, J) (GITA GOPI,J) SUDHIR Page 57 of 57 Downloaded on : Sun Sep 05 04:05:28 IST 2021