Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S Patodia Syntex Ltd on 22 March, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. E/429/09 (Arising out of Order-in-Appeal No. P-II/PAP/261/2008 dated 24.12.2008 passed by the Commissioner of Central Excise (Appeals), Pune-II). For approval and signature: Honble Shri Raju, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== Commissioner of Central Excise, Pune-II Appellant Vs. M/s Patodia Syntex Ltd. Respondent Appearance: Shri R.K. Maji, Assistant Commissioner (AR) for Appellant Ms. Mansi Patil, Advocate for Respondent CORAM: SHRI RAJU, MEMBER (TECHNICAL) Date of Hearing: 14.03.2016 Date of Decision: 22.03.2016 ORDER NO. Per: Raju
The respondents, M/s Patodia Syntex Ltd., had availed credit of ADE (TTA) in respect of fabrics. There was no ADE (TTA) to the final product, therefore, they were unable to utilize the same credit. The respondents had exported certain goods and in terms of Rule 5 of the Cenvat Credit Rules, 2004, the respondents filed refund claim. The refund claim was rejected on account of limitation as in respect of the period April, 2003 to June, 2004, the refund claim was filed on 20.10.2007. Aggrieved by the said order, the respondent preferred an appeal before the Commissioner (Appeals), who set aside the order passed by the Assistant Commissioner and allowed the appeal filed by the respondents. Aggrieved by the said order, the Revenue is in appeal before this Tribunal.
2. Learned AR for the Revenue relied on the decision of the Hon'ble High Court of Madras in case of GTN Engineering (I) Ltd. 2012 (281) ELT 185 (Mad). In the said decision, while interpreting similar provisions under Notification No. 5/2006-CE (NT) has observed as follows: -
14.?The said notification prescribes a period of one year, as provided under section 11B of the Central Excise Act, for the purpose of making application in Form-A along with prescribed enclosures and also the relevant extracts of the records maintained under the Central Excise Rules, 2002, Cenvat Credit Rules, 2004 or Service Tax Rules, 1994 in original. That application should be filed before the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be. For the purpose of finding out as to the relevant date for the purpose of making claim for refund of CENVAT credit, Rule 5 should be made applicable. It is the contention of the learned counsel for the assessee that the provision defining relevant date does not cover the claim for refund of CENVAT credit. We may point out that when a statute empowered for such claim, the said provision must be read to find out as to the relevant date. Rule 5 specifies that where any input or input service is used in the manufactures of final product which is cleared for export under bond or letter of undertaking as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed.
15.?A reading of the above rule, though there is no specific relevant date is prescribed in the notification, the relevant date must be the date on which the final products are cleared for export. If any other conclusion is arrived, it will result in disentitling any person to make a claim of refund of CENVAT credit. Admittedly, the respondent has made a claim only invoking Rule 5 of the CENVAT Credit Rules, 2004. In that view of the matter, there cannot be any difficulty for us to hold that the relevant date should be the date on which the export of the goods was made and for such goods, refund of CENVAT credit is claimed.
He also relied on the decision of the Tribunal in case of Affinity Express India Pvt. Ltd. 2015 (37) STR 321 (Tri-Mum) passed by a Single Member, where the Tribunal has relied on the decision of Hon'ble High Court of Madras in the case of GTN Engg. (supra) and treated the date of export as the relevant date for the purpose of Rule 5 of the Cenvat Credit Rules, 2004.
3. Learned Counsel for the respondent argued that the clause (6) of Notification No. 11/2002 requires filing of the application before the expiry of period specified under Section 11B of the Central Excise Act, 1944. She argued that Section 11B does not cover the case pertaining to refund of CENVAT Credit under Rule 5 and therefore, the time limit as specified therein in meaningless. In support of her argument, she relied on the decision of the Tribunal in the case of Deepak Spinners Ltd. 2014 (302) ELT 132 (T). She particularly relied on para 6 of the said judgment to assert that similar view has been taken by the Hon'ble High Court of Madhya Pradesh also. Paras 6 & 7 of the said decision read as under: -
6. Rule 5 of the Cenvat Credit Rules, 2002 provides for? cash refund of the Cenvat credit accumulated due to clearances for export of goods under bond without payment of duty under Rule 19 of the Central Excise Rules, and which could not be utilised for payment of duty by the assessee on clearance of home consumption. In terms of the provisions of this Rule, the cash refund is subject to the procedure being followed and conditions being fulfilled in the notification issued by the Central Government in this regard. During the period of dispute, Notification No. 11/2002-C.E. (N.T.), dated 1-3-2002 prescribed the procedure laying down the safeguards, conditions and limitations. Clause 6 of this notification provides that The application in Form A along with the proof of due exportation and the relevant extracts of the records maintained under the said rules or the deemed credit register maintained in respect of textile fabrics, as the case may be, in original, are lodged with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, before the expiry of the period specified in Section 11B of the Central Excise Act, 1944. Earlier in Rule 57F of Central Excise Rules, 1944 also, there was an identical provision and in terms of Rule 57F, a similar notification had been issued which also had a similar provision providing that all the claims for cash refund of accumulated Cenvat credit must be filed before the expiry of period specified in Section 11B. In this case, admittedly the application for cash refund under Rule 5 in respect of exports made during April, 2002 to June, 2002, had been filed on 17-6-2003 and, as such, according to the department, the cash refunds of accumulated Cenvat credit in respect of export during the period prior to 17-6-2002 is time-barred. Thus, the basic point of dispute in this case is as to whether the limitation period prescribed under Section 11B would be applicable for cash refund under Rule 5 of the Cenvat Credit Rules, 2002. I find that on this very issue Honble Madhya Pradesh High Court in the case of STI India Ltd. v. CCE, Indore (supra) in para 6 of the judgment has held that the strict law of limitation provided in Section 11B of the Central Excise Act would not apply to the claim of refund claimed pursuant to notification issued under Rule 57F. In this regard para 6 of this judgment is reproduced below :-
It is not in dispute that claim for the quarter October,?6. 1998 to December, 1998 was made on 27-7-1999 by invoking Clause 6 of the Appendix to notification issued under Rule 57F. In our view, the strict law of limitation provided in Section 11B of the Central Excise Act would not apply to the claim of refund claimed pursuant to notification issued under Rule 57F. It is, in our opinion, procedural in nature rather than mandatory (see AIR 1992 SC 152). In this case, what was required to be seen by the authorities was whether appellant had submitted along with application all necessary proof regarding exportation of goods and relevant extracts of form R.G. 23A or deemed credit register maintained in respect of textile fabrics in original as the case may be as provided in Clause 6 of Appendix to notification issued under Rule 57F. Once the appellant (Assessee) was able to satisfy these requirements to the satisfaction of authority concern then they were entitled to claim the refund of duty paid on inputs.
7. In my view the judgment of Honble Madhya Pradesh? High Court is squarely applicable to this case, more so when the appellant falls within the jurisdiction of Honble Madhya Pradesh High Court. This judgment has been followed by Honble Gujarat High Court in the case of CCE, Surat-I v. Swagat Synthetics reported in 2008 (232) E.L.T. 413 (Guj.) and also by the Tribunal in the case of Elcomponics Sales Pvt. Ltd. v. CCE, Noida (supra) and Global Energy Food Industries v. CCE, Ahmedabad (supra).
She also relied on the decision of the Tribunal in case of Affinity Express India Ltd. 2015-TIOL-2441-CESTAT-MUM (different appeal of the same party), where in similar circumstances in the said decision, the Tribunal has observed as under: -
5.1 With respect to denial of refund claim on account of limitation, I find considerable force in the submissions made by the learned Counsel for the Appellant that refund under Rule 5 of the Cenvat Rules is of accumulated cenvat credit over a period of time on account of export of goods or services. Further, the assessee does not become entitled to the refund merely upon accumulation but he has to first make an attempt to utilize the said credit for payment of service tax / excise duty and only after he satisfies the conditions of accumulation on account of export-nature of his services and his inability to utilize the same for domestic business, that he qualifies for the refund. Given this, it is difficult to ascribe any particular date as the relevant date to compute the period of limitation, as envisaged under Section 11B of the Central Excise Act and therefore respectfully following the decision of the co-ordinate benches in identical situation, in the case of Deepak Spinners Ltd. vs. CCE, Indore, Elcomponics Sales Pvt. Ltd. vs. CCE, Noida and Global Energy Food Industries vs. CCE, Ahmedabad (supra), I hold that no time limit will apply for refund claim under Rule 5 of the Cenvat Credit Rules. Further, prior to date of crystallization of right to refund, no limitation can start running.
4. I have gone through the rival submissions. Section 11B of the Central Excise Act, 1944 prescribes the relevant date for the purpose of calculating the period of limitation. The relevant date has been defined in Explanation B as under: -
(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;
(b) in the case of goods returned for being remade, refined, reconditioned, or subjected to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid;
(c) in the case of goods to which banderols are required to be affixed if removed for home consumption but not so required when exported outside India, if returned to a factory after having been removed from such factory for export out of India, the date of entry into the factory;
(d) in a case where a manufacturer is required to pay a sum, for a certain period, on the basis of the rate fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the duty leviable on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period but before the expiry of that period such rate is reduced, the date of such reduction;
(e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person;
(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. It is seen that neither the appeal filed by the Revenue nor the learned AR was able to point out under which clause of the definition of relevant date prescribed under Section 11B, the case of Revenue under Rule 5 of the Cenvat Credit Rules would fall.
4.1 It is seen that the provision of Section 12B in respect of limitation cannot be strictly applied to refund filed under Rule 5 of the Cenvat Credit Rules as the provisions of relevant date under Section 11B is not clear in respect of such refunds. In case of Deepak Spinners (supra), the Tribunal has rightly observed as under: -
Therefore, the definition of relevant date as given in clause (a) of Explanation B to Section 11B in respect of export rebate claims, cannot be applied to Rule 5 refund claims. There is no other clause of Explanation B to Section 11B which is applicable to the refund claims under Rule 5 of the Cenvat Credit Rules. A limitation prescribed in law always has two components - the period of limitation during which the application is to be filed or something is to be done and the date from which the limitation period is to be counted. Without prescribing the relevant date, a statutory provision prescribing limitation period is meaningless. Since, the second component of the limitation i.e. the relevant date from which the limitation period is to be counted is missing in Clause 6 of the Notification No. 11/2002-C.E. (N.T.), dated 1-3-2002, in my view the limitation provision in this notification is meaningless. The judgment of this Tribunal in the case of Sara Services & Engineer Pvt. Ltd. v. CCE, Meerut-I (supra) and CCE v. Fort William Co. Ltd. (supra) would not apply as in this case, the provision of limitation is incomplete. In view of this, the impugned order is not sustainable.
Decision of the Tribunal in the case of Deepak Spinners (supra) has been made relying upon the decision of Hon'ble High Court of Madhya Pradesh.
5. In view of the above, the appeal filed by the Revenue is dismissed.
(Pronounced in Court on 22.03.2016) (Raju) Member (Technical) Sinha 1 Appeal No. E/429/09