Customs, Excise and Gold Tribunal - Delhi
Asian Bearing Ltd. vs Collector Of Central Excise on 4 September, 1990
Equivalent citations: 1991(51)ELT532(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. In this appeal, the appellants Asian Bearing Limited have sought for setting aside the order-in-appeal No. 33/84 CBE (D) in No. 17/84 (CBE) D dated 18-4-1984 passed by the Collector of Central Excise (Appeals), Madras and to restore the order-in-original in C. No. V/49/13/3/COI/T.2 dated 27-10-1983 passed by the Assistant Collector of Central Excise, Hosur.
2. The Revenue went in appeal before the Collector of Central Excise (Appeals), Madras under Section 35E (4) of the Central Excises & Salt Act, 1944, hereinafter referred to as the Act, against the order-in-original of the Assistant Collector, Hosur sanctioning a refund of Rs. 59,290.21.
3. It is the case of the appellants that they manufacture ball bearings and rolling bearings of various types in their factory at Hosur. They had obtained a licence No. 1/82 (Rolling bearing) dated 28-4-1982 from the Assistant Collector of Central Excise, Hosur. They had been clearing ball bearings on payment of duty between 1st June, 1982 and 31st March 1983. As the total clearance during the financial year 1982-83 did not exceed Rs. 15 lakh, they filed a refund claim dated 14-3-1983 for the amount already paid seeking the benefit of Notification No. 80/80 dated 19-6-1980. The Assistant Collector of Central Excise, Hosur, by his order-in-original accepted the claim of the appellants and sanctioned a refund of Rs. 59,290.21. However, Collector of Central Excise, Coim-batore lodged an appeal before the Collector of Central Excise (Appeals), Madras, who by his order-in-appeal No. 33/84 dated 18-4-1984, set aside the order of the Assistant Collector of Central Excise and ordered the appellants to repay the amount erroneously refunded to them.
4. The Collector of Central Excise (Appeals), Madras, by his order-in-appeal, has held that the appellants had not lodged their refund claim in time. He has held that the relevant date under Section 11B of the Act is the date of payment of duty and not the close of the financial year as had been contended by the appellants. He overruled the contention of the appellants that the relevant date for filing refund claim as being the date of the close of the financial year. He held that the refund sanctioned by the Asstt. Collector was contrary to the provisions of Section 11B of the Act. He, further, held that the appellants were not eligible for exemption under Notification No. 80/80CE as they had not satisfied the condition stipulated in the notification i.e. the exemption wider the notification shall be available to a manufacturer, who had not cleared any specified goods in the preceding financial year, on the condition that he files in advance, before availing the exemption and not at the time of the refund claim.
5. The appellants have challenged the findings of the Collector of Central Excise (Appeals), Madras and have contended in their appeal memo that certain decisions rendered by the Govt. of India under erstwhile Rule 11 of CE Rules was applicable to the facts of this case. They have contended that comparing the wordings of the erstwhile Rule 11 and Section 11-B, would show that there is no difference between the wordings of the former rule or the new rule under the Act, hence the Collector (Appeals) was not justified in not applying the rulings of the Govt. of India relied upon by the appellants.
6. They have, further, stated that the Notification 80/80 grants an exemption to a manufacturer clearing goods for the first time in a financial year upto Rs. 7.5 lakh of clearance without payment of any duty and upto another Rs. 7.5 lakh at 3/4 of the appropriate duty. They have explained that applicability of the notification 80/80 is also subject to a further condition that the clearance of all excisable goods during the relevant financial year does not exceed Rs. 20 lakh. They have contended that when a manufacturer starts a new factory, he takes into account various factors in estimating his annual production. Not all the assumptions made turn out to be valid ones nor the circumstances under which certain predictions were made remain unaltered. This, in turn, affects the assumptions of the manufacturers about his annual production and his annual clearances. Until after the end of the financial year, it would not be possible for the manufacturer to state accurately whether his clearances have exceeded Rs. 15 lakh or not. It is, therefore, their submission that the proper construction of the Notification would be that a claim for refund could be made only after knowing the correct picture as on 31st March of the financial year and a claim for refund could be filed within 6 months from the close of the financial year. They have, further, contended that the main point on which reliance had been laid by the Collector (Appeals) in his order, had been the meaning assigned to the words "relevant" date through an explanation under section 11B according to which the "relevant date" for the purpose of the section in situations other than those specified therein, is "the date of payment of duty". They had contended that such a strict interpretation of this meaning as done by the Collector (Appeals) would lead to injustice as also an anomalous situation is created in the sense that a manufacturer paying full duty from the beginning on account of the fact that he could not estimate his value of clearances in the financial year would be in a disadvantageous position vis-a-vis one availing the exemption right from the commencement of a financial year and whose value of clearance is the same, as the former could get only refund of duties paid during the six months preceding the last date of the financial year. As such, the very purpose of the notification would stand vitiated. In this context they have relied upon the principle evolved in the case of Boxwell India (P) Ltd.,v. C.C.E., Bombay -1988 (35) ELT 722 (Tribunal) = 1988 (12) ETR16, wherein it has been held that any provision of law should be, so as to advance the intention behind the same and any interpretation as would defeat the said intention should be avoided. They have also relied upon the ruling of the Bombay High Court in 1980 ELT 274 wherein it is held that "once the Govt. of India has given a finding on a contention raised before it, it is binding upon the subordinate authorities in subsequent proceedings unless some other material is brought to their notice to a contrary view."
7. They have also relied upon the rulings, as given in 1985 (1.9) ELT 476 (Tribunal) in MA. KB. Foam (P) Ltd., Bangalore v. C.C.E., wherein, it has been held that point of limitation should run from the date of approval of base clearance and not from the date of payment of duty in terms of Notification 198/76, though in this case the declaration was filed and base clearance approved earlier, yet the appellants had to file fresh declaration, since some mathematical inaccuracies were found in the contention for base clearance and, therefore, a new figure for base clearance was approved again later. They have relied upon the following citations in support of their contentions:
(i) T.T. Pylunny Royal Smiths, Kunnakulam v. Union of India and Others -1978 E.L.T. (J 705) (Kerala).
(ii) Auric Engineering Private Limited v. Assistant Collector of Central Excise and Others -1980 E.L.T. 620 (A.P.)
(iii) Harrisan & Crossfield v. C.C.E., Cochin Ed. (Madras) 29/82 dated 30-4-1983.
(iv) Collector of Central Excise (Appeals), Bombay v. Amber Bearing Mfg. Co. Pvt. Ltd., Nagpur -1985 (22) E.L.T. 498 (Coll. App.)
(v) K.B. Foams Pvt. Ltd., Bangalore v. Collector of Central Excise, Bangalore -1985 (19) E.L.T. 476 (Tribunal).
Relying on these rulings, the appellants have finally contended that the Notification No. 80/80 has to be literally construed in the light of these rulings and provision of Rule 11 and have sought for setting aside the impugned order of the Collector (Appeals) and upholding the order of the Assistant Collector in the order -in-original.
8. Shri S. Chakraborty, Id. J.D.R., arguing for the Revenue, submitted that the ruling relied upon by the appellant in 1978 (2) E.L.T. 705 (Kerala) has been reversed by the Division Bench of the same High Court as reported in 1983 (14) E.L.T. 2156 (Kerala). Shri S. Chakraborty, Id. J.D.R., further, submitted that as per the ruling of the Division Bench of the Kerala High Court (supra), applying the basis alleged in the said citation, the party is not entitled to claim the relief, as stated by them, in this appeal. We have heard the Id.D.R., perused the records carefully and gone through each of the citations referred to by the appellants in the arguments. The question that arises for consideration is whether the appellants are liable to reimburse the duty of Rs. 59,290.21 refunded to them, which they had paid to them, during the period 1-6-1982 to 31-3-1983 on clearances of their goods and as to whether they are eligible to the benefits in terms of Notification 80/80 dated 19-6-1980 consequent upon their total value of clearances during the financial year 1982-83 not exceeding the permissible limitation.
9. The Id. Collector, in the impugned order-in-appeal, has held that the claim of refund was lodged by the appellants on 14-3-1983 and the claim sanctioned by the Assistant Collector in the impugned order, pertained to duty paid on clearances prior to 14-9-1982. The Collector has, further, observed that the relevant date under Section 11B of the Act is the date of payment of duty in appellants' case and not the close of financial year as contended by them. He has rejected the appellants' arguments that the relevant date in respect of their clearances would be the date of close of financial year. He has held that according to para 3 of the Notification 80/80-CE, the exemption under the notification shall be available to a manufacturer, who had not cleared specified goods in the preceding financial year on the condition that he files a declaration with the Assistant Collector. According to him, it has been, specifically, stipulated that the declaration has to be filed in advance before availing the exemption and not at the time of filing the refund claim. He has held that the Assistant Collector committed an error when sanctioning the refund claim after accepting the declaration on the date of filing revised claim or immediately thereafter. Therefore, he set aside the order of the Assistant Collector and held that the appellants were not entitled to the exemption under Notification 80/80 CE as they had not satisfied the condition stipulated in the notification. He has concluded that all conditions stipulated in exemption notification has to be specified by the assessee and there is no scope for labelling some other conditions as mere procedural formality. We note below the relevant portion of Notification 80/80 dated 19-6-1980:
"In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 and in supersession of the notification of the Government of India in the Ministry of Finance (Deptt. of Revenue) No. 71/78-Central Excise dated the 1st March 1978, the Central Govt. hereby exempts the excisable goods of the description specified in column (3) of the Table hereto annexed (hereinafter referred to as the specified goods) and falling under such item number of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), as is specified in the corresponding entry in column (2) of the said Table, and cleared for home consumption on or after the 1st day of April in any financial year, by or on behalf of a manufacturer from one or more factories -
(a)...
(b)...
(2)...
(i) if the aggregate value of clearances of the specified goods, if any, by him or on his behalf, for home consumption, from one or more factories, during the preceding financial year, had exceeded rupees fifteen lakhs"
Section 11 (b) reads as follows -
"Any person claiming refund of any duty of excise may make an application for refund of such duty to the Asstt.Collector of Central Excise before the expiry of 6 months (from the relevant date)"
10. It follows that by reading Section 11 (b) and Notification No. 80/80 that the Refund application has to be filed within the period specified under Section 11 (b). The Statute prevails over notification as rightly contended by the learned Departmental Rep. In the present case, the appellants had filed a Refund application on 14-3-1983 after 6 months from the payment of duty. A similar contention was raised by the party in Asstt. Collector of Central Excise, Ernakudam v. T.T. Plunny Prop. Royal Smiths, Kunnamkulam [1983 (14) ELT 2156 (Ker.)]. The Division Bench of the Kerala High Court while examining the provisions 11 (as it stood then) and 173-J alongwith notification dated 30-4-1978, has rejected the contention of the party. While examining provisions of 173-J, the Court observed that the refund provision under the relevant rule was one year. However, while further examining the entire case in the light of the notification and the rules, the Court negatived the contention of the party in that case. The observations of the Court are noted hereunder-
"There can be little doubt that the rules which we have quoted place the period of a limitation of an application for refund in this case at a period of one year. The same is to start from the date of payment or adjustment of duty. Being a rule or a provision providing for limitation in respect of claims for refund, considerations of hardship seem to be out of place although, if it is possible to give the rule a construction which would avoid hardship, we should gladly adopt the same. What is contended before us by counsel for the respondent is that unless the view taken by the learned Judge is endorsed, the practical working of the Rule would cause hardship and result in injustice. It was pointed out that an application for refund of excise duty, can having regard to the terms of Ext PI notification be preferred only in respect of steel furniture whose total value does not exceed Rs. 50,000/- and that too, only if the total value of the furniture removed in the course of the year does not exceed Rs. 2 lakhs. It was argued that whether the limit of two lakhs had been exceeded or not, would be known only at the close of the year in question, and therefore, to insist on an application for refund or exemption being made with reference to the earlier point of time in the year on the mere ground that the duty had been paid during that period would be inequitable and unjust; and would oblige the writ petitioner to make an application for refund irrespective of whether he was or was not hoping to fall within the limit for obtaining exemption for refund of duty. At the first blush, the argument did cause us some concern. But we are satisfied that there is no ground or scope for apprehension or uneasiness. Although the realisation that the goods cleared do not exceed the two lakhs limit which alone would qualify for exemption may come only at the end of the assessment year, the claim for refund has to be limited to goods worth not more than Rs. 50,000/-. There is nothing in Rule 173-J of Rule 11 which obliges a person to confine his claim for refund to the articles removed in the earlier part of the year rather than to the later portions thereof; so that, the hardship and the inequity of having to prefer a claim or application for refund with respect to the earlier purchases and removals of steel furniture are more imaginary than real, in case of dealers regularly buying and clearing throughout the year. And, as for exceptional case of heavy concentration of clearance and removal in the early part of the year, with a rule of the type here involved, there is no reason why an application for refund should not be made each time clearance is made upto the limit of Rs. 50,000/- leaving the authorities to reject the same, if the ceiling of Rs. 2 lakhs for obtaining refund had been exceeded".
20. In the citation referred to by the appellants in the case of K.B. Foams Pvt. Ltd. [1985 (19) ELT 476], the question of Notification No. 198/78-CE came up before this Tribunal for consideration. In this case, the question of refund depended on fixation of base clearance, the period of limitation for the same runs from the date of subsequent approval of base clearance and not from the date of payment of duty and therefore, this citation is not of help to the appellants.
21. The other citation of the appellants in the case of Collector of Central Excise, Bombay v. Amber Bearing Mfg. Co. [1985 (22) ELT 498]the order is that of Collector (Appeals) Bombay which we are not inclined to follow.
22. In BTX Chemicals Pvt. Ltd. v. Collector of Central Excise reported in [1989 (41) ELT 377], the Bombay High Court has considered the provisions of a similar Notification No. 55/75-CE dated 31-3-1975 and No. 89/79 dated 1-3-1979 vis-a-vis as Rule 11A of Central Excise Rules. The Bombay High Court has held in paras 4 and 5 that the period of limitation should begin from the date of payment of duty and not from the end of the financial year.
23. In Auric Engg. Pvt. Ltd. v. Asstt. Collector of Central Excise and Ors. [1980 (6) ELT 620], the Andhra Pradesh High Court has undoubtedly given the benefit to the party but this was a citation which was much prior to the Division Bench ruling of Kerala High Court (supra). The observations made in the Andhra Pradesh High Court have also been considered in the Kerala High Court case (supra) and the same have not been found in favour of the Bench decision of the Kerala High Court. As such we are not inclined to follow the Andhra Pradesh High Court decision in Auric Engg. Pvt. Ltd. [1980 (6) ELT 620 (AP)].
24. The various contentions of the appellants raised in their Memorandum of appeal pertaining to the interpretation and intendment of Notification and the rulings cited by them does not have much relevance in view of the clear rulings given by the Division Bench of Kerala High Court (supra) and the Bombay High Court in BTX Chemicals Ltd. v. Collector of Central Excise [1989 (41) ELT 377].
25. The view taken by one of us (Sh. Peeran) in Collector of Central Excise, Kan-pur v. Rallis India Ltd. in Order No. 412/89-C dated 23-8-1989, was taken in view of the fact that the ruling of the Division Bench of the Kerala High Court was not brought to the notice of the Bench at the time of hearing of the case, as such the ruling given in Order No. 412/89 dated 23-8-1989 cannot be relied upon in view of the clear rulings of the Division Bench of Kerala High Court and the ruling of Bombay High Court in the case of BTX Chemicals Pvt. Ltd. case.
26. Viewing the overall facts and circumstances of the case, we are of the opinion that the law laid down by the Division Bench of the Kerala High Court is more appropriate and applicable to the facts of this case. The appellants in this case had not filed the Refund application within 6 months of the date of payment of the duty as contemplated under Section 11B of the Act. They have filed the refund claim on 14-3-1983 claiming refund for payment of duty for the period prior to 14-9-1982. Admittedly, the refund claim has been filed after the expiry of 6 months. The Division Bench of Kerala High Court (referred supra) has in a similar circumstances sympathised with the party, but viewing the law applicable to the facts of the case, had rejected the contention. We are in total agreement of the ruling laid down by the Division Bench of the Kerala High Court noted supra and BTX's case of Bombay High Court (supra), and therefore, reject this appeal.
27. [Contra per : S.K. Bhatnagar, Member (T)]. - With due respect to Ld. Member (Judicial), my views and orders in the matter are as follows :-
28. I find that in this case originally the refund claim was partly allowed by one Assistant Collector and a notice was issued with reference to the remaining part of the claim for considering the aspect of time bar. The second Asstt. Collector considered the reply of the appellants and accepting their contention held this part also in time and sanctioned the same. This is evident from the impugned order in original dated 27-10-1983.
29. An appeal, dated 10-2-1984 was filed with reference to this (second order in original dated 27-10-1983).
30. A copy of the first order has not been produced before us. It has also not been stated whether an appeal was at any stage filed against the first order.
31. I am mentioning this because apparently Collector's appeal has taken into account two aspects: (i) regarding applicability of Notification No. 80/80-C on merits in terms of the language of the notification; (ii) aspect of time bar. But from the above facts, it is clear that the aspect of admissibility on merits had already been decided conclusively and stands finally settled by first order of the Asstt. Collector in the absence of any order of any authority setting aside or modifying the same. A question, therefore, arises whether it was open for the Ld. Collector (Appeals) to look into the aspect of applicability of the said notification at the stage of appeal against the second order.
32. Although a copy of the order has not been produced, it is apparent from the impugned order in original that the Show Cause Notice dated 17-9-1983 was issued after the claim had been partly sanctioned. Therefore,, an appeal filed in Feb. '84 would be prima facie time barred. Hence, in my opinion the issue of applicability of the notification as such could not be re-opened at this stage.
33. Looking at the matter differently, the impugned order in original does not question the applicability of the notification and has been passed on the premise that the applicant was otherwise entitled to the benefit of the notification and the only issue to be decided was as to whether this part of the claim was within time.
34. This leaves only the issue of time bar open. In this respect, I find that there have been more than one schools of thought and various High Courts have differred in their opinion and judgments. The Andhra Pradesh High Court (in the case of Auric Engg. Pvt. Ltd. - 1980 (6) ELT 620 (AP) has taken the view that if the manufacturer could only know at the end of the financial year whether the production would exceed the exemption limit in terms of the Notification No. 85/74 dated 1-5-1974, a refund claim made at the end of the financial year in pursuance to that notification was not barred by limitation under Rule 11.
35. The Kerala High Court (Division Bench) has on the contrary taken a view (setting aside the single judge order) that even where the realisation that the goods cleared do not exceed the exemption limit may come only at the end of the assessment year the time limit prescribed under Rule 11 would apply.
36. I further note in this connection that this Tribunal has been of the view that where different interpretations are taken by different High Courts and a plurality of views comes to light, the Tribunal was free to adopt his own view in the matter as reported in the case of Atma Steel.
37. I also find that the Tribunal itself has in the case of MA. K.B. Foam P. Ltd. [1985 (19) ELT 476 (Tribunal)] has taken a view, while applying the Notification No. 198/76-CE, that where the question of refund depended on a fixation of base clearance, the period of limitation runs from the date of approval of base clearance and not from the date of payment of duty.
38. In this connection, it is also well settled by now that it is the date on which the assessee stakes the claim for the benefit of notification which is required to be taken into account and not the date of filing of the formal claim.
39. The Tribunal had in the case of Jatiaga Valley Tea Stakes Ltd. Calcutta [1983 (13) ELT 1274], taken a note of the date of which the assessee staked the claim and considered it was in lime.
40. Again in the case of Royal Seema Pvt. Ltd., Kurnool, the Tribunal had passed an order with reference to Notification No. 80/80-C (which is the relevant notification in the present case) and held that "Period of limitation should be reckoned from the expiry of the financial year 1980-81 as the application for refund of excise duty has been received by the Assistant Collector well within the period of 6 months after the expiry of the financial year 1981-82 which should be treated as having been made in time and refund granted to the party."
41. From the above, it would be clear that in case of refund arising out of a claim for benefit of exemption notification, the language of relevant exemption notification was important and was required to be borne in mind and the SRB's order in the case of Royal Seema is pet on the point as it also deals with notification No. 80/80-C with reference to which the present case has arisen. And it is noteworthy that it refers to Section 11-B, and reads the same with the notification.
42. [-I may, however, also mention that the SRB's order also refers to the judgment of Andhra Pradesh High Court in the case of Auric Engg. and the Kerala High Court's judgment in the case of T. T. Pylunny Royal Smiths Kunnakulam 1978 (2) ELT J 705 (passed by Ld. single judge which subsequently upset)]
43. In the present case, I find that the order in original does not indicate the date on which the claim was first staked which was important as declaration was required to be filed in terms of the Notification No. 80/80-C as rightly observed by the Collector (Appeals). But the Order in Appeal mentions that the refund claim was filed on 14-3-1983 and declaration was filed only thereafter and that this refund claim filed on 14-3-1983 was with reference to a period prior to 14-9-1982.
44. The Notification No. 88/80-C does not refer to base clearance and, therefore, the assessee was not required to await the order of the Asstt. Collector. On the contrary, it provides that where a manufacturer has not cleared any specific goods in the preceding financial year or has cleared any such goods for the first time on or after first day of August in the preceding financial year the exemption contained in this notification shall be applicable to such manufacture if he filed a declaration with the Asstt. Collector that the correct value of such goods during the financial year is not likely to exceed the prescribed limit during the financial year. Therefore, while Collector (Appeals) was correct in his observation regarding the requirement of declaration (as aforesaid the applicability of the notification on merits was no longer open to question) the only date available for considering the aspect of time bar is the date on which the refund application was actually filed. The Order in Original indicates that the financial year in question is 1982-83 and therefore, if the ratio of the SRB in the case of Royal Seema was to be applied, the appellants would be entitled to claim refund within 6 months of the expiry of this financial year.
45. In the instant case, the refund claim has been filed on 14-3-1983 i.e. in fact before the completion of the financial year. Therefore, it is held as in time in terms of the aforesaid order of the Southern Regional Bench which I respectfully follow.
46. In view of the above position, the order of the Collector (Appeals) is set aside and the order of the Asstt. Collector is confirmed. The appeal is accepted.
In view of the difference of opinion between Ld. Member (Judicial) and Member (Technical), the matter is put up to the Hon'ble Sr. Vice President for referring it to a third Member on the following point of difference :-
1. Whether the applicability or otherwise of Notification No. 80/80-C on merits could be looked into by the Collector (Appeals) and the Tribunal in the facts and circumstances of the case : and
2. Whether refund application was in time (or not).
47. [Order per: Sh. G. Sankaran, President]. - The point of difference between the two learned Members comprising the Bench which originally heard the appeal, was taken up for hearing by me on 20-7-1990. The appellants were not represented in the Court but in response to the notice of hearing, they have furnished written submissions and have stated that they would not be present at the hearing. Accordingly, I have perused the record and heard Shri S. Chakraborty, learned Departmental Representative for the respondent.
48. One of the contentions put forth by the appellants is that the decision of this Tribunal in the case of M.A. K.B. Foam Pvt. Ltd. v. Collector of Central Excise, Bangalore 1985 (19) ELT 476 which has been held by the learned Member (J) as not applicable to the present case, is in fact applicable. That case dealt with Central Excise Notification No. 198/76, dated 16-6-1976 which inter alia contemplated the fixation of base clearance by the Assistant Collector in order that the assessee may be enabled to claim relief. It was in this context that the Tribunal had held in a series of decisions that when the assessee submitted the prescribed declaration containing the particulars required for fixation of base clearance by the Assistant Collector, it had to be inferred that the assessee had staked a claim for the benefit of the notification. In the present instance, as Shri Chakraborty points out, there is no similar requirement. The appellants' contention that the aforesaid decision is applicable "in the sense that irrespective of whether it is subsequent fixation of base period or original fixation of base period the Tribunal held that the limitation would run only from the date of final fixation of the base clearance.", is not tenable. It is difficult to accept the appellants' contention that they would have known about eligibility or otherwise for duty exemption in terms of Notification No. 80/90 only after the expiry of the financial year. If they had closely monitored the progressive value of clearance from their factory they would have come to know that they had ceased to be eligible or - as the case may be - continued to be eligible, for the benefit of the notification at a particular point of time. This situation is not comparable to the situation in Notification No. 198/76 where the assessee can claim relief only on the fixation of base clearance by the Assistant Collector on the basis of the particulars furnished by the assessee.
49. Another contention of the appellants is that the judgment of the Andhra Pradesh High Court in Auric Engg. Pvt. Ltd. v. Assistant Collector of Central Excise and Others 1980 (6) ELT 620 should have been followed in preference to the Kerala High Court judgment in Asstt. Collector of Central Excise, Kunnakulam v. T.T. pylunny 1983 (14) ELT 2156. In the former case relating to an exemption notification based on the annual turnover, the learned Single Judge of the Andhra Pradesh High Court agreed with the petitioner's contention that it was only at the end of the financial year that the petitioner could properly claim refund on the basis of the notification. However, in the latter case, a Division Bench of the Kerala High Court has held with reference to another exemption notification based on annual turnover that there was nothing to prevent the assessee from filing applications for refund of duty each time a clearance in excess of the stipulated exemption limit was made. In coming to this view, the High Court observed that in dealing with a provision providing for limitation in respect of claims for refund, considerations of hardship seemed to be out of place although, if it were possible to give the provision a construction which could avoid hardship, a Court should gladly adopt the same. However, on a detailed consideration of the provisions of the notification the Court did not accept the contention of the assessee that unless the view that a claim for refund can be filed only after the expiry of the financial year was accepted, the practical working of the provision would cause hardship and result in injustice.
50. In the above connection, it is relevant to note that during the period material to the present dispute, Section 11(B) of Central Excises & Salt Act had already come into force replacing Central Excise Rule 11. This Section provides that any person claiming refund of any duty of excise may make application for refund of such duty to the Assistant Collector of Central Excise before the expiry of 6 months from the relevant date as defined in the Section. The only saver of limitation is in the case of payment of duty under protest and that is not the case of the appellants herein. The relevant date has been defined differently for different situations. One definition is in the case of goods exported out of India; another in the case of goods returned to the factory for being remade, refined, re-conditioned, or subjected to any other similar process. The third definition is in the case of goods to which band rolls are required to be affixed; another in cases where a manufacturer is required to pay a sum for certain period, on the basis of a rate fixed by the Central Government in full discharge of his liability for 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 the rate has been reduced before the expiry of that period; yet another is in the case of payment of duty provisionally under the Act or the Rules. In the present case, none of these contingencies exist. Therefore, the relevant date applicable to the present case would be as defined in Sub-clause (f) of clause (B) of the explanation, namely, the date of payment of duty.
51. It has been contended by the appellants that since they anticipated much more than the value of clearances prescribed under para 3 of Notification 80/80, they did not file a declaration claiming the exemption from the first date of their commencement of manufacture. However, when they found that the total aggregate value of clearance during the financial year as on 14-3-1983 did not exceed Rs. 15 lakhs the claim for refund of duty was filed even before the close of the financial year. They have invoked para 5 of the notification which reads as follows :-
"Where the specified goods have not been cleared from any factory in the preceding financial year, or have been cleared for the first time on or after the 1st day of August in the preceding financial year, the exemption contained in this Notification shall not be applicable, - (ii) If the aggregate value of clearances of the specified goods from such factory by or on behalf of one or more manufacturers, for home consumption during the financial year, exceeds rupees fifteen lakhs".
It is contended that the provision is designed to ensure the entitlement of a manufacturer to the exemption after the close of the financial year in the event of the aggregate value of clearance not exceeding Rs. 15 lakhs during the financial year. It is difficult to understand on what basis this inference is drawn from the said provision.
52. In this connection, it is worth nothing, even at the cost of repetition, that Section 11(B) provides for different contingencies and different "relevant dates" for each separate contingency. Except in the case of the residual Sub-clause (f), the relevant date for various purposes has been defined not as the date of payment of duty but, as for example, in the case of goods exported by sea or air, the date on which the carrying ship or aircraft leaves India; in the case of goods returned for being re-made, reconditioned etc., the date of entry into the factory for the said purposes. It is, therefore, clear that the rule making authority was conscious of the fact that it was providing for limitation to cover different contingencies to run from various specified dates none of which [Sub-clause (f)] was the date of payment of duty. There is, therefore, no reason to suppose in the absence of a definition in this behalf, that the "relevant date" for the purpose of claiming refund of duty in terms of an exemption notification based on value of annual turnover, was intended to be the expiry of the financial year and not the date of payment of duty.
53. Certain authorities have been cited in support of the proposition that exemption notifications should be construed liberally and absurdities are to be avoided etc. In the present instance, I do not see that the provisions of Section 11(B) read with Notification No. 80/80 admits of any ambiguity or doubt which needs to be resolved in favour of the assessee by a liberal interpretation or by extending any benefit of doubt.
54. In the light of the above discussions, I agree with the learned Member (Judicial) and would hold that the refund application was barred by limitation.
55. As regards the other point formulated in the order of reference as to whether the applicability or otherwise of Notification No. 80/80 on merits could be looked into by the Collector (Appeals) and the Tribunal in the facts and circumstances of the case, as rightly pointed out by the learned Departmental Representative, the order of the learned Judicial Member does not deal with this point. Therefore, there is, really speaking, no point of difference on this particular aspect. Apart from that, since the basis for the two different perceptions (assuming that there is a point of difference) has not been set out in the order of the Member (Judicial) (he has not done so evidently because this point was not considered by him in view of his finding on the issue of limitation), it is not possible for me as Third Member to say whether I agree with one Member or the other. As such, I refrain from expressing any opinion on this point.
56. The papers may now be placed before the original Bench for the final disposal of the appeal.
FINAL ORDER
57. In view of the majority opinion, the refund claim was barred by limitation.
58. The appeal is accordingly rejected.