Custom, Excise & Service Tax Tribunal
) Cce Pondicherry vs ) G.Jijith Kumar on 11 February, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal Nos.E/724/07, E/771/07
E/11/08, E/79/08 & E/350/08
[Arising out of Order-in-Appeal No.108/2007 (P) dt. 31.7.2007, OIA No.115/2007 (P) dt. 21.8.07, OIA No.76/06 dt. 30.11.06, OIA No.173/07 (P) dt. 21.11.07, OIA No.37/08 (P) dt. 25.4.08 passed by the Commissioner of Central Excise (Appeals), Chennai, CC & CCE (A), Trichy]
For approval and signature:
Honble Ms.JYOTI BALASUNDARAM, Vice-President
Honble Mr. P.KARTHIKEYAN, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
1) CCE Pondicherry
2) CCE Pondicherry
3) Churchs Auxiliary for Social Action (CASA)
4) CCE Pondicherry
5) CCE Pondicherry
Appellant/s
Versus
1) G.Jijith Kumar
2) Pondicherry Multipurpose Social Service Society Ltd. (PMSS)
3) CCE Trichy
4) Churchs Auxiliary for Social Action(CASA)
5) Pondicherry Multipurpose Social Service Society (PMSS)
Respondent/s
Appearance :
Shri M.S.Krishnakumar, Advocate Shri J.Shankararaman, Advocate Shri Santhiraj Kolengaden Auth.Rep. (Sl.No.1) For the Assessee/s Shri N.J.Kumaresh, SDR For the Revenue CORAM:
Honble Ms.Jyoti Balasundaram, Vice-President Honble Mr. P. Karthikeyan, Member (Technical) Date of hearing : 12.12.2008 Date of decision : 11.02.2009 Final Order No.____________ Per P.Karthikeyan These appeals relate to claims for refund of excise duty in terms of Notifications No.32/05-CE as amended by Notification No.35/05. These notifications exempted cement and steel purchased for construction of houses for tsunami victims mainly by Non-Governmental Organizations (NGOs) from excise duty subject to evidence of payment. The Notifications are reproduced below :-
Notification No.32/2005-C.E. dated 17-Aug-2005 Cement and steel used in construction of houses in tsunami affected areas of Tamil Nadu, Andhra Pradesh, Kerala, Pondicherry and Andaman and Nicobar Islands Exemption In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with section 91 and section 93 of the Finance (No. 2) Act, 2004 (23 of 2004), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts cement falling under Chapter 25, and steel falling under Chapters 72 or 73 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as said goods) used in construction of houses, in tsunami affected districts of States of Tamil Nadu, Andhra Pradesh, Kerala and Union Territories of Pondicherry and Andaman and Nicobar Islands (hereinafter referred to as said areas), from the whole of the duty of excise leviable thereon under the said Acts (hereinafter referred to as the said duties).
2. The exemption contained in this notification shall apply? only if the said goods are used in construction of houses, including temporary shelters (hereinafter referred to as such houses) by Non Government Organization or Voluntary Agency or Private-Public Enterprise or Rehabilitation Organization or Trust or any agency, approved by the concerned State or Union Territory Government (hereinafter referred to as approved construction agencies), for constructing such houses in the said areas, for rehabilitation work.
3. The exemption contained in this notification shall be given?
effect to in the following manner :-
(a) The manufacturer of the said goods shall pay duties as applicable at the time of clearance and shall not be eligible for the refund of said duties;
(b) The approved construction agency shall submit a statement of quantity and value of the said goods used in construction of such houses along with documents evidencing payment of duty on the said goods to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, (hereinafter referred to as jurisdictional excise officer), in whose jurisdiction the area where such houses are being constructed is situated;
(c) The approved construction agency shall file a claim for refund of the said duties paid on the said goods procured and utilized in construction of such houses by it on a quarterly basis, along with a consumption certificate for the said goods from a Chartered Engineer countersigned by the concerned District Collector or Sub-Divisional Magistrate and completion certificate from the District Collector to the jurisdictional excise officer, within sixty days from the end of the relevant quarter, and such period may be extended by the jurisdictional excise officer by another sixty days :
Provided that refund claim for the period April, 2005 to June, 2005 may be filed by the 30th September, 2005.
(d) The jurisdictional excise officer shall, after satisfying himself that the said goods have been used for the specified purposes, and on production of documentary evidence about the duty paid on the said goods, sanction the refund claim, at the rate of 6% of the cost of construction of such house or houses, as the case may be, subject to a maximum of Rs. 9000 per house constructed in any case; and
(e) The refund under clause (d) shall be given only to the concerned approved construction agency.
4. The amount of?refund shall not exceed 6% of the cost of construction or Rs. 9000 per house constructed, whichever is less, in any case.
5.The exemption contained in this notification shall only be in respect of said duties paid on the said goods, which have been used in such houses constructed on or after the 1st April, 2005 and on or before 31st July, 2006.
Notification No.35/2005-C.E. dated 29-Nov-2005 Cement and steel used in construction of houses in Tsunami affected areas Exemption Amendment to Notification No. 32/2005-C.E. In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with section 91 and section 93 of the Finance (No. 2) Act, 2004 (23 of 2004), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 32/2005-CENTRAL EXCISE, dated the 17th August, 2005, number G.S.R. 537 (E), dated the 17th August, 2005, namely :-
In the said notification, in para 3, -
(i) for clause (c), the following clauses shall be substituted, namely :-
(c) The approved construction agency shall file a claim for refund of the said duties paid on the said goods procured and utilised in construction of such houses by it along with a self certified consumption certificate of the said goods to the jurisdictional excise officer, on a quarterly basis, within sixty days from the end of the relevant quarter and such period may be extended by the jurisdictional excise officer by another sixty days;
(ca) The approved construction agency, on completion of such houses, shall submit a completion certificate from the District Collector along with consolidated consumption certificate covering all the earlier refund claims, duly certified by a Chartered Engineer and countersigned by the concerned District Collector or Sub-Divisional Magistrate, to the jurisdictional excise officer;;
(ii) for clause (d), the following clause shall be substituted, namely :-
(d) The jurisdictional excise officer shall, after satisfying himself that the said goods have been used for the specified purposes, and on production of documentary evidence about the duty paid on the said goods, and the completion certificate and the consolidated consumption certificate as specified in clause (ca) above, by the approved construction agency, sanction the refund claim, at the rate of 6% of the cost of construction of such house or houses, as the case may be, subject to a maximum of Rs. 9000 per house constructed; and The details of the appeals under consideration are as follows :-
S.No. Appeal No. OIA No.& date Period of dispute Refund amount Rs.1
E/724/07** 108/07 dt. 31.07.07 2005-06 11,52,000 2 E/771/07** 115/07 dt. 21.08.07 2005-06 38,83,946 3 E/11/08* 76/06 dt. 30.11.06 Oct.05 to Dec.05 2,52,144 4 E/79/08** 173/07 dt. 21.11.07 2005-06 13,31,587 5 E/350/08** 37/08 dt. 21.08.07 2005-06 37,85,289 * Filed by M/s.Churchs Auxiliary Social Action ** Filed by Revenue
2. Order-in-Appeal No.76/06 dt. 30.11.06 impugned in Appeal No.E/11/08 denied claim for refund of a total Rs.2,52,144/- filed by an NGO, M/s.Churchs Auxiliary Social Action (CASA), Nagapattinam and of M/s.Tata Relief Committee, Nagapattinam. The claims filed by the appellants were rejected by the original authority and the said orders affirmed by the Commissioner (Appeals) vide the order impugned. The appeal filed by CASA is before us. The Commissioner (Appeals) found that the appellants had not filed the refund claims on quarterly basis within 60 days from the end of the relevant quarter, or the further period of another 60 days extendable by the jurisdictional excise officer. This was the time limit prescribed in the notification. Relying on the apex courts judgment in M/s.Tata Iron & Steel Co. Ltd. Vs State of Jharkand reported in AIR 2005-SC-2871, the Commissioner (Appeals) sustained the order of the original authority and rejected the claims for refund. In the judgment cited, the apex court had held that Eligibility clause in relation to the exemption notification must be a given strict meaning. In Mittal Polypacks Vs State of Jharkand [2005 (141) STC 270 (SC)], also relied on by him, the apex court had held that Exemption notification has to be strictly construed. The conditions for taking benefit have to be strictly interpreted.
3. In the appeal filed by CASA, they have attributed their failure to comply with the conditions of the exemption notification to their not being familiar with the rules and procedures, they being NGO devoted to field work attending to rehabilitation work. The delay had occurred due to the delay in obtaining the required certificates from the State Government authorities. They had filed the claims belatedly thinking that the requisite certificates could be produced to the authorities as and when received. The refund claim was in time if the relevant date provided in Section 11B of the Central Excise Act, 1944 (the Act ) was considered. Notification No.5/06-CE (NT) dt. 14.3.06 issued under Rule 5 of CENVAT Credit Rules, 2004 (CCR) in consonance with the Act, had provided that refund claim was to be lodged before the expiry of period specified under Section 11B. They relied on the apex court judgment in the case of CCE Vs Ashok Arc [2005 (179) ELT 513 (SC)] which had held that rules could not override the provisions of Section. The Tribunal in the case of Automaotive India Vs CCE [2006 (203) ELT 402 (Tri-Del.)] held that part of Rule 8 (3) of CER being inconsistent with Section 11AB of the Act could not be sustained. The words or Rs. 1000/- per day, whichever is higher occurring in sub-rule (3) of Rule 8 were ultra vires the provisions of Section 11AB (1) of the Act and could not, therefore, be enforced. The Rajasthan High Court in Lucid Calloids Ltd Vs UOI rendered on 3.8.2005 DB C.W. No.1192/05 had struck down the phrase or Rs.1000/- per day whichever is higher occurring in sub rule (3) of Rule 8 ultra vires is Section 11 AB (1) being beyond the rule making power of the Central Government. Time limit prescribed under Section 11 of the Act should therefore govern the grant of the refund under the subject notification the appellants argued. It is further claimed that the notification was a beneficial legislation and the legislation and the relief could not be denied. They placed strong reliance on the following observation of the apex court in the case of Mangalore Chemicals & Fertilizers Ltd. Vs DC 1991 (155) ELT 437 (SC) in support.
There is a fallacy in the emphasis of this argument. The consequence which Shri Narasimhamurthy suggests should flow from the non-compliance would, indeed, be the result if the condition was a substantive one and one fundamental to the policy underlying the exemption. Its stringency and mandatory nature must be justified by the purpose intended to be served. The mere fact that it is statutory does not matter one way or the other. There are conditions and conditions. Some m ay be substantive, mandatory and based on considerations of policy and some others may merely belong to the are of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve Several other case law were cited which had laid down that an exemption notification should not be construed in a manner that defeated the purpose of the notification. It was also claimed that though construction materials had been purchased in the name of M/s.Methodist Engineering Co. Pvt. Ltd., Cuddalore, they had been engaged by CASA to construct houses for tsunami victims and the claims had to be allowed.
4. Appeals have been filed by the Commissioner of Central Excise, Pondicherry against orders of the Commissioner (Appeals) vacating orders of the original authority denying refund claims filed in terms of Notifications and remanding the same for fresh adjudication. Vide orders impugned in Appeal No.E/724/07, E/79/08, and E/771/07, the Commissioner (A) vacated part of the orders of the original authority not allowing refund claimed, to the respective appellants. He found that the original authority had rejected the claims for refund on the ground of limitation prescribed in the notification. He remanded the matter holding that the claims had been filed in time. In the appeals filed by the Commissioner of Central Excise, Pondicherry, the Commissioner has submitted that the impugned orders had wrongly held that refund claims could be filed in terms of the notification within 60 day or further period allowed by the excise officer from the date of issue of completion certificate. The impugned orders had wrongly condoned the delay in filing the claim. The notification as amended had provided for filing the refund claim at the end of each quarter with a self consumption certificate. The consolidated consumption certificate covering all the claims along with completion certificate from the District Collector could be filed after completion of building of houses. Refund claims filed beyond 60 days from the end of the relevant quarter could not be allowed.
5. Appeal No.E/350/08 of revenue challenges an order of Commissioner (Appeals) which vacated an order of the original authority rejecting the refund claim for Rs.37,76,234/-. The original authority had held that the respondents had not produced proof for payment of duty on the cement and steel in question. Even in the eventuality of the respondents producing proof of payment of duty, the admissible amount had to be credited to the Consumer Welfare Fund (CWF). He sanctioned Rs.9055/- and credited the same to CWF. The Commissioner (Appeals) found that the department had not contested the veracity of documents showing quantity and value of cement and steel used in the construction of houses supported by documents evidencing payment of duty and consumption certificate for the said goods from the Chartered Engineer countersigned by the concerned District Collector and completion certificate from the District Collector. He relied on CBECs letter issued in F.No.101/01/2008-CX.3 dt 30.1.07. The Circular had clarified that clause 3 (e) of the Notification provided that the refund should be given only to the concerned approved construction agency; the notification did not state that duty paying documents should be in the name of the said construction company; the crucial aspects were that the goods should have been used for the intended purpose and that duty had been paid. As regards unjust enrichment vide para 3 of Circular No.682/73/2002-CX. dt. 19.12.02, the CBEC had clarified that the refund envisaged in the notifications (the notification No.56/02-CE and 57/02 both dated 14.11.02 not mentioned in the impugned order) was not on account of any excess payment of excise duty by the manufacturer but was basically designed to give effect to the exemption. In other words, the mechanism had been adopted to operationalize the exemption envisaged in those two notifications. The provisions of Section 11B of the Act did not apply in the case of these notifications. These instructions were reiterated in Circular No.701/17/2003-CX. dt. 12.3.03. He held that Rule 6 (3) (b) of Cenvat Credit Rules 2004 was not applicable to the said claim as the appellants were not manufactures and had not claimed the refund in that capacity. Moreover, the department had no case that the goods had not been used for the intended purpose or that the manufacturer of the goods involved had not paid applicable duties at the time of their clearance. In the appeal filed by the revenue, the ground taken is that barring a claim relating to quarter ending 3/06, claims pertaining to quarters ending 6/05, 9/05 and 12/05 were filed beyond the time prescribed in the notification. The finding of the Commissioner (Appeals) that period of 60 days was available from the date of issue of completion certificate could not be accepted as the said finding was contrary to the terms of the notification. The impugned quantities of cement and steel had been obtained from dealers and the invoices did not indicate particulars of payment of duty or the name of the claimant. Therefore, the Commissioner (A) had wrongly held refund disallowed by the original authority to be admissible.
6. Heard both sides.
7. We have considered the case records and the rival submissions. The notifications in question were issued in the aftermath of tsunami in December 2004, in which several lives perished. Government supplemented the efforts of the NGOs by introducing fiscal measures such as reimbursing the excise duty incurred by NGOs in procuring cement and steel for constructing houses for those who had lost everything in the tsunami. Notification in question conveys to the people, a relief ordered by the representatives of the people. The relief allowed and the target communities are manifestly clear. Once the subject of the exemption is identified, the relief intended should be allowed without reservation by the agency implementing it. Withholding the benefit on technicalities would frustrate the legislative intent embodied in the notification. In the case of Mangalore Chemicals & Fert Vs. D.C. (supra), the apex Court had observed as under :
The mere fact that it is statutory does not matter one way or the other. There are conditions and conditions. Some may be substantive, mandatory and based on considerations of policy and some others may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve. By enforcing the subject limitation to claim refund, the policy of the government will be defeated. Notification was introduced to effectuate the Governments policy. The authorities are expected to take implemental action which subserves the policy and object of the notification. In this view of the matter we observe that the appeals of Revenue find basis in an imagined lis. We hold that the limitation prescribed in the notification cannot be enforced so as to deny the benefit of the notification. Liability of the State to return the tax collected in terms of a notification cannot subsist for an indefinite period. The claims therefore have to be made within the limitation prescribed in the Act. We therefore direct that the refund claimed shall not be denied on the ground of limitation if they were filed within the time limit prescribed in Section 11B of the Act.
7.1 We note that the points in dispute are the admissibility to refund claimed beyond the time limit prescribed in the subject notification; applicability of the vice of unjust enrichment in grant of refunds to the claimants and if refund could be allowed in case the duty paying documents are not in the name of the claimant concerned.
7.2 We have already held that the time limit prescribed in the Notification for claiming refund is a procedural condition and failure to fulfill the same cannot affect the entitlement of the target community to receive the relief. We find that the apex Court had observed as under in M/s.Giridarilal and sons, appellant Vs Balbirnath Mathur & Ors. (AIR 1986 SC 1499) as regards failure to satisfy procedural conditions to qualify for eligibility to relief provided in an exemption notification.
The primary and foremost task of a court in interpreting a statute is to ascertain the intention of the legislature actual or imputed. Having ascertained the intention, the court must then try to so interpret the statute as t promote and advance the object and purpose of the enactment. For this purpose, where necessary the Court may even department from the rule that plain words should be interpreted according to their plain meaning. There need to be no meek and mute submission to the plainness of the language. To avoid patent injustice, anomaly or absurdity or to avoid invalidation of a law, the Court would be well ju