The Supreme Court ruled that section 11B of the Central Excise Act, 1944 shall be specifically applicable with respect to claim for rebate of duty.
Feeling aggrieved and dissatisfied with the judgment and order passed by the High Court of Karnataka at Bengaluru, whereby the Division Bench of the High Court dismissed the said appeal preferred by the appellant and has confirmed the common judgment and order passed by the Single Judge dismissing the writ petitions, upholding the order passed by the respondent rejecting the claim of the appellant for rebate on the ground that the claim was barred by time/limitation prescribed under Section 11B of the Central Excise Act, 1944, the original writ petitioner/appellant preferred the appeal.
That the appellant M/s Sansera Engineering Limited is a manufacturer of excisable goods. It exported goods on payment of excise duty between August, 2015 and October, 2015 and filed claims for rebate of duty paid on the goods exported under Rule 18 of Central Excise Rules, 2002 in respect of these exports. Subsequently for the period October 2015 to March 2016, the appellant claimed rebate.
Senior Advocate Arvind P. Datar, appearing for the appellant, submitted that for rebate claim, the period prescribed under Section 11B of the Act shall not be applicable.
He contended that the grant of rebate of duty paid on excisable goods or duty paid as provided under Rule 18 of the 2002 Rules is different than that of refund of duty entitled under Section 11B of the Act.
Advocate Siddhant Kohli, appearing for the revenue, submitted that in the case of Uttam Steel Ltd., it is specifically observed and held by the Court that the period of limitation prescribed under Section 11 B of the Act shall be applicable with respect to rebate of duty.
He contended that as it was found that Section 11A of the Act is a general provision for recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded, the same shall not be made applicable with respect to recovery of credit wrongly availed of or utilized in an irregular manner under Rule 57-I.
The division bench of Justice M.R. Shah and Justice M.M. Sundresh noted that Rule 18 of the 2002 Rules has been enacted in exercise of rule making powers under Section 37(xvi) of the Act. Section 37(xxiii) of the Act also provides that the Central Government may make the rules specifying the form and manner in which application for refund shall be made under section 11B of the Act.
The court said that the application for rebate of duty has to be made in such form and manner as prescribed in notification.
“However, that does not mean that period of limitation prescribed under Section 11B of the Act shall not be applicable at all as contended on behalf of the appellant” the court said.
It was observed by the court that merely because there is no reference of Section 11B of the Act either in Rule 18 or in the notification on the applicability of Section 11B of the Act, it cannot be said that the parent statute – Section 11B of the Act shall not be applicable at all, which otherwise as observed shall be applicable with respect to rebate of duty claim.
It was further observed that after taking into consideration Section 11B of the Act and the notification and procedure under Rule 12, it is specifically observed and held that rebate of duty of excise on excisable goods exported out of India would be covered under Section 11B of the Act.
The bench held that section 11B of the Act cannot be said to be a general provision. The period of limitation prescribed under Section 11B of the Act shall have to be made applicable with respect to claim for rebate of duty.
It was observed and held that while making a claim for rebate of duty under Rule 18 of the Central Excise Rules, 2002, the period of limitation prescribed under Section 11B of the Central Excise Act, 1944 shall have to be applied and applicable.
The court dismissed the appeal.
Case title: Sansera Engineering Limited v/s Deputy Commissioner, Large Tax Payer Unit, Bengaluru
Citation: Civil appeal no. 8717 of 2022