IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MRS.JUSTICE S.SUJATHA WRIT PETITION No.44309/2017 (T – RES) c/w W.P.No.44310/2017 (T – TAR), W.P.No.44311/2017 (EXCISE) AND W.P.No.19788 /2017 (EXCISE) IN W.P.No.44309/2017:
BETWEEN:
SANSERA ENGINEERING PRIVATE LIMITED PLANT 7, NO.143/A, JIGANI LINK ROAD, BOMMASANDRA INDL. AREA, ANEKAL TALUK, BENGALURU-562 106 REP. BY AUTHORISED SIGNATORY Mr. S.RAMAKRISHNAN ... PETITIONER [BY SRI JOSEPH PRABAKAR, ADV. FOR SRI ANIL KUMAR B., ADV.] AND:
THE DEPUTY COMMISSIONER OFFICE OF THE PRINCIPAL COMMISSIONER, LARGE TAX PAYER UNIT, I.S.S. TOWER, 100 Ft. RING ROAD, BANASHANKARI III STAGE, BENGALURU-560 085. …RESPONDENT [BY SRI JEEVAN J. NEERALAGI, A/W SRI ARAVIND V. CHAVAN, ADVS.] THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER IN ORIGINAL DATED No.248R/2017 LTU DATED 15.05.2017 PASSED BY THE RESPONDENT WHEREBY REBATE CLAIM OF RS.29,47,996/- OF THE PETITIONER WAS REJECTED AS BARRED BY BAR UNDER RULE 18 OF CENTRAL EXCISE RULES, 2002 READ WITH SECTION 11B OF CENTRAL EXCISE ACT, 1944 (ANNEXURE-A).
IN W.P.No.44310/2017:
BETWEEN:
SANSERA ENGINEERING PRIVATE LIMITED PLANT 7, NO.143/A, JIGANI LINK ROAD, BOMMASANDRA INDL. AREA, ANEKAL TALUK, BENGALURU-562 106 REP. BY AUTHORISED SIGNATORY Mr. S.RAMAKRISHNAN ... PETITIONER [BY SRI JOSEPH PRABAKAR, ADV. FOR SRI ANIL KUMAR B., ADV.] AND:
THE DEPUTY COMMISSIONER OFFICE OF THE PRINCIPAL COMMISSIONER, LARGE TAX PAYER UNIT, I.S.S. TOWER, 100 Ft. RING ROAD, BANASHANKARI III STAGE, BENGALURU-560 085. …RESPONDENT [BY SRI JEEVAN J. NEERALAGI, A/W SRI ARAVIND V. CHAVAN, ADVS.] THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER DATED 15.05.2017 PASSED BY THE RESPONDENT WHEREBY REBATE CLAIM OF RS.42,27,928/- OF THE PETITIONER WAS REJECTED AS BARRED BY BAR UNDER RULE 18 OF CENTRAL EXCISE RULES, 2002 READ WITH SECTION 11B OF CENTRAL EXCISE ACT, 1944 (ANNEXURE-A).
IN W.P.No.44311/2017:
BETWEEN:
SANSERA ENGINEERING PRIVATE LIMITED PLANT 7, NO.143/A, JIGANI LINK ROAD, BOMMASANDRA INDL. AREA, ANEKAL TALUK, BENGALURU-562 106 REP. BY AUTHORISED SIGNATORY Mr. S.RAMAKRISHNAN ... PETITIONER [BY SRI JOSEPH PRABAKAR, ADV. FOR SRI ANIL KUMAR B., ADV.] AND:
THE DEPUTY COMMISSIONER OFFICE OF THE PRINCIPAL COMMISSIONER, LARGE TAX PAYER UNIT, I.S.S. TOWER, 100 Ft. RING ROAD, BANASHANKARI III STAGE, BENGALURU-560 085. …RESPONDENT [BY SRI JEEVAN J. NEERALAGI, A/W SRI ARAVIND V. CHAVAN, ADVS.] THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER IN ORIGINAL No.280R/2017 LTU DATED 23.05.2017 IN FILE C.NO.V/18/CE/58/2017 LTU GLT-5 PASSED BY THE RESPONDENT WHEREBY REBATE CLAIM OF RS.69,76,664/- OF THE PETITIONER WAS REJECTED AS BARRED BY BAR UNDER RULE 18 OF CENTRAL EXCISE RULES, 2002 READ WITH SECTION 11B OF CENTRAL EXCISE ACT, 1944 (ANNEXURE-A).
IN W.P.No.19788/2017:
BETWEEN:
TENOVA INDIA PRIVATE LIMITED, (FORMERLY KNOWN AS DELKOR TECHNIK (INDIA) PVT. LIMITED) 421, 11TH CROSS, 4TH PHASE, PEENYA INDUSTRIAL ESTATE, BENGALURU - 560 058 REP. BY ITS AUTHORISED SIGNATORY Mr. RAMESH KARUR RAGHAVENDRAN ... PETITIONER [BY SRI JOSEPH PRABAKAR, A/W SRI ANIL KUMAR B., ADVS.] AND:
THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE, PEENYA DIVISION-1, FLOOR 2, NO.16/1, S.P.COMPLEX, LALBAGH ROAD, BENGALURU - 560 027. …RESPONDENT [BY SRI JEEVAN J. NEERALAGI, ADV.] THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER DATED 23.01.2017 PASSED BY THE RESPONDENT WHEREBY REBATE CLAIM OF RS.1,37,23,479/- OF THE PETITIONER WAS REJECTED AS BARRED BY BAR UNDER RULE 18 OF CENTRAL EXCISE RULES, 2002 READ WITH SECTION 11B OF CENTRAL EXCISE ACT, 1944 (ANNEXURE-A).
THESE PETITIONS HAVING BEEN HEARD AND RESERVED, IS COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY, THE COURT PASSED THE FOLLOWING:
O R D E R These petitions involving similar and akin issues, have been considered together and are disposed of by this common order.
2. The petitioners are before this Court challenging the orders passed by the original Authority rejecting the rebate claim made by them as barred by time under Rule 18 of the Central Excise Rules, 2002 [‘Rules’ for short] read with Section 11-B of the Central Excise Act, 1944 [‘Act’ in short]. It is contended that no time limit has been prescribed for filing a rebate claim under Rule 18 of Rules and Section 11-B of the Act is not applicable to the Notification No.19/2004/CE(NT) dated 6.9.2004 issued by the Central Government under Section 18 of the Rules. The petitioners had claimed the refund of rebate for the exports made during periods prior to the amendment effected on 01.03.2016 to the Notification No.19/2004 whereby Section 11-B of the Act was made applicable to the said Notification. It was argued that Notification No.41/94 CE did contain the time limit referring to Section 11-B of the Act. Consciously, the same was omitted in the Notification No.19/2004 CE (NT), issued superseding the previous Notification No.41/1994.
3. It was contended that in the absence of any time limit prescribed under Rule 18 of the Rules and the Notification No.19/2004, amendment brought to Notification of 19/2004, applying Section 11-B of the Act vide Notification No.18/2016/CE(NT) dated 1.3.2016 is prospective in nature. The respondent Authorities cannot apply the amended Notification retrospectively for the exports made prior to the said amendment. Learned counsel placing reliance on the judgment of the Hon’ble Madras High Court in the case of Deputy Commissioner of Central Excise, Chennai Vs. Dorcas Market Makers Pvt. Ltd., reported in 2015 (321) E.L.T 45 (Mad) confirmed by the Hon’ble Apex Court, submitted that the very issue was the subject matter of the petitions considered by the Hon’ble Madras High Court which have been decided in favour of the assessee holding that the rebate of duty under Rule 18 should be as per the Notification issued by the Central Government which prescribes the conditions, limitations and procedures for considering the claim for refund. The limitation prescribed under Sub-section(1) of 11-B of the Act has not been made applicable under the Notification No.19 of 2004 during the relevant period. The entitlement to refund not being in doubt, in the absence of any time prescription in the scheme, the rejection of the application for refund as time barred, is unjust. It is submitted that similar view has been taken by the Hon’ble High Court of Judicature for Rajasthan at Jodhpur and Hon’ble High Court of Punjab and Haryana at Chandigarh. Reliance is placed on the following decisions:
1. Deputy Commissioner of Central Excise V/s. Dorcas Market Makers Pvt. Ltd., reported in [2015][321] ELT. 45.
2. JSL Lifestyle Limited Vs. Union of India, reported in 2015(326) ELT 265 (P & H).
3. Collector of Central Excise V/s. Raghuvar [India] Ltd., reported in 2000 [118] ELT 311 [SC] 4. The Commissioner of Central Excise and Service Tax Large Taxpayer Unit, Chennai V/s. M/s. Ford India Pvt. Ltd., reported in 2017-VIL-311- MAD-CE 5. Banswara Syntex Limited Vs. Union of India, reported in 2017 (349) ELT 90 (Raj).
4. Learned counsel appearing for the Revenue justifying the order impugned submitted that neither the Rules nor the Notification issued under the Rules could run contrary to the provisions of the Act. Section 11-B of the Act clearly specifies the time limit for claiming the refund of duty. Placing reliance on the judgment of the Hon’ble Apex Court in the case of Union of India and others Vs. Uttam Steel Limited reported in (2015)13 SCC 209, it was argued that claims for rebate/refund requires to be made in accordance with Section 11-B strictly adhering to the limitation period prescribed therein.
5. It is not open to subordinate legislation to dispense with the requirements of Section 11-B. Even if the Notification is silent inasmuch as the prescription of time limit, it has to be implied that the time limit prescribed under Section 11-B shall apply.
6. Learned counsel has placed reliance on the Division Bench judgment of the Hon’ble Madras High Court in the case of M/s Hyundai Motors India Limited Vs. The Department of Revenue and another reported in (2017)355 ELT 342.
7. I have carefully considered the rival submissions of the learned counsel for the parties and perused the material on record.
8. The primary ground of challenge to the orders impugned is relating to the applicability of Section 11-B of the Act to the Notification No.19/2004 issued under Rule 18 of the Rules. It is not in dispute that the Notification No.41 of 1994/CE holding the field for about 10 years did prescribe the time limit for availing the refund of duty. The omission of the time limit in the subsequent Notification 19/2004 was considered by the Hon’ble High Court of Madras in the case of Dorcas Market Makers Pvt. Ltd., supra, it was held that the rebate of duty under Rule 18 should be as per the Notification issued by the Central Government. Notification No.19/2004 did not contain the prescription regarding limitation, a conscious decision taken by the Central Government.
9. Much emphasis was placed by the learned counsel on the decision of Dorcas Market Makers Pvt. Ltd., supra. The challenge made to the said decision by the Revenue before the Hon’ble Apex Court was dismissed at the admission stage. In view of the recent judgment of the Hon’ble Apex Court in Uttam Steels supra, the decision of Dorcas Market Makers Pvt. Ltd., supra as well as the other judgments referred to by the learned counsel for the petitioners would not come to the aid of the petitioner. The Division Bench of the Hon’ble Madras High Court has considered the same in its later decision of M/s. Hyundai Motors India Ltd., supra and following the recent judgment of M/s. Uttam Steels Ltd., supra has answered the issue in favour of the Revenue.
10. In the case of Uttam Steels, supra, the Hon’ble Apex Court has observed thus:
“11. The effect of the amendment of Section 11-B on 12-5-2000 is that all claims for rebate pending on this date would be governed by a period of one year from the date of shipment and not six months. This, however, is subject to the rider that the claim for rebate should not be made beyond the original period of six months. On the facts of the present case, respondents cannot avail of the extended period of one year on the subsequent amendment to Section 11-B.
12. The effect of Section 11-B, and in particular, applications for rebate being made within time, has been laid down in Mafatlal Industries Ltd. V. Union of India, thus: (SCC pp. 631-33, para 108) "108. The discussion in the judgment yields the following propositions. We may foreman that these propositions are set out merely for the sake of convenient reference and are not supposed to be exhaustive. In case of any doubt or ambiguity in these propositions, reference must be had to the discussion and propositions in the body of the judgment.
(i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff-whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter – by misinterpreting or misapplying the provisions of the Central Excises an Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or by misinterpreting or misapplying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactments before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 226 – and of this Court under Article 32 – cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11-B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it.
The said enactments including Section 11-B of the Central Excises and Salt Act and Section 27 of the Customs Act do constitute ‘law’ within the meaning of Article with the said provisions must be held to be collected, retained or not refunded, as the case may be, under the authority of law. Both the enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties imposed thereunder. Section 11-B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasis in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal – which is not a departmental organ – but to this Court, which is a civil court.”
(emphasis in origional) From the law laid down by this decision it is clear that all claims for rebate/refund have to be made only under Section 11-B with one exception – where a statue is struck down as unconstitutional. Further, the limitation period of six months has to be strictly applied.
13. xxxx 14. Shri Bagaria’s argument based on the proviso to rule 12(1) would obviously not have any force if Section 11B were to apply of its own force. It is clear from Section 11B(2) proviso (a) that a rebate of duty of excise on excisable goods exported out of India would be covered by the said provision. A reading of Mafatlal Industries (supra) would also show that such claims for rebate can only be made under Section 11B within the period of limitation stated therefor. This being the case, the argument based on Rule 12 would have to be discarded as it is not open to subordinate legislation to dispense with the requirements of Section 11B. Equally, the argument that on a bond being provided under Rule 13, the goods would have been exported without any problem of limitation would not hold as the exporter in the present case chose the route under Rule 12 which, as has been stated above, is something that can only be done if the application for rebate had been made within six 18 months. We, therefore, allow the appeal and set aside the Bombay High Court judgment dated 12.8.2003”.
11. It was argued by the learned counsel for the petitioners that the order passed in M/s Hyundai Motors India Limited, supra, is inconsistent with the decision of M/s Ford India limited, supra, whereby it has been held that Section 11-B would not govern the provisions of the special scheme and therefore, there is no scope for invoking Section 11-B of the Act. In this context, it is significant to note that the Hon’ble Madras High Court while considering the exemption notification issued under Section 5A of the Act, has held that section 11-B of the Act would not apply, whereas while rendering the judgment in M/s. Hyundai Motors supra, considering the Notification No.19 of 2004 issued under Rule 18 of the Rules, placing reliance on M/s. Uttam Steels Limited, supra, has held that Section 11-B of the Act is applicable. It is apt to refer to paragraph 26 of M/s. Hyundai Motors supra, which reads thus:
“26. Therefore, the contention of the appellant that no time limit is prescribed in the notification could not be accepted in view of proviso [a] to subsection [ii] of Section 11B of the Central Excise Act. Therefore, reading of Rule 18, there is no specific relevant date prescribed in the Notification to the effect that the relevant date on which final products or goods was cleared for export.”
12. Thus, the two decisions [M/s.Ford India and M/s.Hyundai Motors] are rendered in different context. In the circumstances, Hyundai Motors India Limited, supra would squarely applicable to the facts of the present case. In Hyundai Motors India Limited, supra the judgment of Raghuvar [India] Limited is also considered and distinguished.
13. The reference made by the learned counsel for the petitioners to the circular instructions issued by the Central Board of Excise and Customs, New Delhi, is of little assistance to the petitioners since there is no estoppel against a statute. It is well settled principle that the claim for rebate can be made only under section 11-B and it is not open to the subordinate legislation to dispense with the requirements of Section 11-B. Hence, the notification dated 01.03.2016 bringing amendment to the Notification No.19/2004 inasmuch as the applicability of Section 11-B is only clarificatory.
14. It is not in dispute that the claims for rebate in the present cases were made beyond the period of one year prescribed under Section 11-B of the Act. Any Notification issued under Rule 18 has to be in conformity with section 11-B of the Act.
15. The decision of Original Authority rejecting the claim of rebate made by the petitioners as time barred applying Section 11-B of the Act to the Notification No.19 of 2004 cannot be faulted with.
For the reasons aforesaid, no exception can be found with the orders impugned. Accordingly writ petitions stand dismissed.
Sd/- JUDGE Dvr: