SANSERA ENGINEERING LIMITED versus DEPUTY COMMISSIONER, LARGE TAX PAYER UNIT, BENGALURU on 29 November 2022

[2022] 9 S.C.R. 709

SANSERA ENGINEERING LIMITED

v.

DEPUTY COMMISSIONER, LARGE TAX PAYER UNIT,BENGALURU

Civil Appeal No. 8717 of 2022

NOVEMBER 29, 2022

[M.R. SHAH AND M.M. SUNDRESH, JJ.]

Central Excise Act, 1944: s.11B – Rebate of duty of excise –Limitation – Appellant, manufacturer of excisable goods exportedgoods on payment of excise duty between August, 2015 and October,2015 and filed claims for rebate of duty on 10.02.2017 and14.02.2017 u/r.18 of Central Excise Rules, 2002 – Claims rejectedas barred by time provided u/s.11B of the Act – Challenge against –Held: As per explanation (A) to s.11B, ‘refund’ includes rebate ofduty of excise – Therefore, s.11B shall be applicable with respect toclaim for rebate of duty also – As per s.11B(1) of the Act, any personclaiming refund of any duty of excise has to make an applicationfor refund of such duty to the appropriate authority before the expiryof one year from the relevant date – Since application for rebate ofduty is governed by s.11B of the Act, it has to be made before theexpiry of one year from the “relevant date” and in such form andmanner as may be prescribed – The form and manner are prescribedin notification dated 6.9.2004 – Merely because in r.18 of the 2002Rules, which is an enabling provision for grant of rebate of duty,there is no reference to s.11B of the Act and/or in notification dated6.9.2004 issued in exercise of powers conferred by r.18, there is noreference to the applicability of s.11B of the Act, it cannot be saidthat the provision contained in the parent statute, namely, s.11B ofthe Act shall not be applicable, which otherwise shall be applicablein respect of the claim of rebate of duty – s.11B of the Act is asubstantive provision in the parent statute and r.18 of the 2002 rulesand notification can be said to be a subordinate legislation –Subordinate legislation which is in aid of the parent statute has tobe read in harmony with the parent statute – Subordinate legislationcannot be interpreted in such a manner that parent statute maybecome otiose or nugatory – In the instant case, respective claims

709

A

B

CDEF

G

H

Awere beyond the period of limitation of one year from the relevantdate and were rightly rejected by the appropriate authority.

Dismissing the appeal, the Court

HELD: 1. On a fair reading of Section 11B of the Act, it cansafely be said that Section 11B of the Act shall be applicable withBrespect to claim for rebate of duty also. As per Explanation (A) toSection 11B, “refund” includes “rebate of duty” of excise. Asper Section 11B(1) of the Act, any person claiming refund of anyduty of excise (including the rebate of duty as defined inExplanation (A) to Section 11B of the Act) has to make anCapplication for refund of such duty to the appropriate authoritybefore the expiry of one year from the relevant date and only inthe form and manner as may be prescribed. The “relevant date”is defined under Explanation (B) to Section 11B of the Act, whichmeans in the case of goods exported out of India where a refundof excise duty paid is available in respect of the goods themselvesDor, as the case may be, the excisable materials used in themanufacture of goods….. Thus, the “relevant date” is relatableto the goods exported. Therefore, the application for rebate ofduty shall be governed by Section 11B of the Act and thereforeshall have to be made before the expiry of one year from theE“relevant date” and in such form and manner as may beprescribed. The form and manner are prescribed in the notificationdated 6.9.2004. Merely because in Rule 18 of the 2002 Rules,which is an enabling provision for grant of rebate of duty, there isno reference to Section 11B of the Act and/or in the notificationdated 6.9.2004 issued in exercise of powers conferred by RuleF18, there is no reference to the applicability of Section 11B of theAct, it cannot be said that the provision contained in the parentstatute, namely, Section 11B of the Act shall not be applicable,which otherwise shall be applicable in respect of the claim of rebateof duty. [Para 9][723-D-H; 724-A]G2. At this stage, it is to be noted that Section 11B of the Actis a substantive provision in the parent statute and Rule 18 ofthe 2002 Rules and notification dated 6.9.2004 can be said to bea subordinate legislation. The subordinate legislation cannotoverride the parent statute. Subordinate legislation can alwaysHbe in aid of the parent statute. At the cost of repetition, it is observed that subordinate legislation cannot override the parentstatute. Subordinate legislation which is in aid of the parent statutehas to be read in harmony with the parent statute. Subordinatelegislation cannot be interpreted in such a manner that parentstatute may become otiose or nugatory. If the submission on behalfof the appellant that as there is no mention/reference to Section11B of the Act either in Rule 18 or in the notification dated6.9.2004 and therefore the period of limitation prescribed underSection 11B of the Act shall not be applicable with respect toclaim for rebate of duty is accepted, in that case, the substantiveprovision – Section 11B of the Act would become otiose,redundant and/or nugatory. If the submission on behalf of theappellant is accepted, in that case, there shall not be any periodof limitation for making an application for rebate of duty. Eventhe submission on behalf of the appellant that in such a case theclaim has to be made within a reasonable time cannot be accepted.When the statute specifically prescribes the period of limitation,it has to be adhered to. [Para 10][724-B-E]

3. While making claim for rebate of duty under Rule18 ofthe Central Excise Rules, 2002, the period of limitation prescribedunder Section 11B of the Central Excise Act, 1944 shall have tobe applied and applicable. In the present case, as the respectiveclaims were beyond the period of limitation of one year from therelevant date, the same are rightly rejected by the appropriateauthority and the same are rightly confirmed by the High Court.There is no reason to interfere with the impugned judgment andorder passed by the High Court. [Para 15][730-E-F]

Mafatlal Industries Ltd. v. Union of India (1997) 5 SCC536 : [1996] 10 Suppl. SCR 585; Union of India v.Uttam Steel Limited (2015) 13 SCC 209 : [2015] 4SCR 770 – relied on.

Collector of Central Excise, Jaipur v. Raghuvar (India)Limited (2000) 5 SCC 299 : [2000] 1 Suppl. SCR 236– held inapplicable.

Everest Flavours Ltd. v. Union of India 2012 (282) ELT481 – approved.

AB

C

D

E

F

G

H

ACosmonaut Chemicals v. Union of India 2009 (233)ELT 46 (Gujarat) - referred to.

Hyundai Motors India Limited v. Department of Revenue2017 (355) ELT 342 (Madras); JSL Lifestyle Ltd. v.Union of India 2015 SCC OnLine P&H 13023 : 2015B(326) ELT 265 (P&H); Gravita India Ltd. v. Union ofIndia 2016 (334) ELT 321 (Rajasthan); Camphor andAllied Products Ltd. v. Union of India 2019 SCC OnLineAll 4705 : 2019 (368) ELT 865 (Allahabad); DeputyCommissioner of Central Excise v. M/s Dorcas MarketMakers Pvt. Ltd. 2015 SCC OnLine Mad 8492 : 2015C(321) ELT 45(Madras) – disapproved.

Case Law Reference

From the Judgment and Order dated 23.07.2021 of the High CourtEof Karnataka at Bengaluru in Writ Appeal No. 249 of 2020.

Arvind P. Datar, Harish Bindumadhavan, Pawanshree Agrawal,Advs. for the Appellant.

Siddhant Kohli, Shyam Gopal, Ms. Chinmayee Chandra, Ms.Suhasini Sen, Annirudh Sharma, Mukesh Kumar Maroria, Advs. for theFRespondent.

The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentGand order dated 23.07.2021 passed by the High Court of Karnataka atBengaluru in Writ Appeal No. 249/2020, whereby the Division Bench ofthe High Court has dismissed the said appeal preferred by the appellantherein and has confirmed the common judgment and order dated22.11.2019 passed by the learned Single Judge dismissing the writpetitions, upholding the order passed by the respondent rejecting theH

claim of the appellant for rebate on the ground that the claim was barredby time/limitation prescribed under Section 11B of the Central ExciseAct, 1944 (hereinafter referred to as the ‘Act’), the original writpetitioner/appellant herein has preferred the present appeal.

2. The facts leading to the present appeal in nutshell are as under:

That the appellant herein – M/s Sansera Engineering Limited is amanufacturer of excisable goods. It exported goods on payment of exciseduty between August, 2015 and October, 2015 and filed claims for rebateof duty paid on the goods exported on 10.02.2017 to the tune ofRs. 29,47,996/- and Rs. 42,27,928/- under Rule 18 of Central ExciseRules, 2002 (hereinafter referred to as the ‘2002 Rules’) in respect ofthese exports. Subsequently on 14.02.2017, for the period October 2015to March 2016, the appellant claimed rebate of Rs. 1,47,27,766/-.

2.1 The original authority rejected the above-mentioned rebateclaims as barred by time prescribed under Section 11B of the Act videthree different Orders-in-Original. Aggrieved by the respective Orders-in-Original rejected the respective claims as barred by time prescribedunder Section 11B of the Act, the appellant preferred writ petitions beforethe learned Single Judge. The learned Single Judge vide common orderdated 22.11.2019 dismissed the said writ petitions holding that the claimsfor rebate were made beyond the period of one year prescribed underSection 11B of the Act. The judgment and order passed by the learnedSingle Judge has been confirmed by the Division Bench of the HighCourt by the impugned judgment and order in Writ Appeal No. 249/2020. Hence, the present appeal.

3. Shri Arvind P. Datar, learned Senior Advocate appearing onbehalf of the appellant has made the following contentions in support ofhis submission that for rebate claim, the period prescribed under Section11B of the Act shall not be applicable:

i) that the grant of rebate of duty paid on excisable goods or dutypaid as provided under Rule 18 of the 2002 Rules is different thanthat of refund of duty entitled under Section 11B of the Act;

ii) that the rebate of duty is on export of the goods and is in theform of an incentive and on furnishing the form R within six monthsfrom the date of export, the exporter is entitled to the rebate ofduty on fulfilling the relevant conditions as mentioned in thenotification No. 19/2004 dated 6.9.2004; A

B

C

D

E

F

G

H

iii) that neither Rule 18 nor notification dated 6.9.2004 specificallyprovided for the applicability of Section 11B of the Act for theperiod between 2000 to 2016; A

iv) that by notification dated 1.3.2016, notification dated 6.9.2004came to be amended under heading “(3) Procedures” and thewords “before the expiry of the period specified in Section 11B ofthe Act” came to be inserted. Therefore, a conscious decisionwas taken that for the period between 2000 to 2016, the periodprescribed under Section 11B of the Act shall not be applicable; B

v) that in absence of specific provision either in Rule 18 or innotification dated 6.9.2004 which came to be issued in exerciseof powers under Section 37 of the Act specifically making Section11B of the Act applicable which provides for the limitation to makean application within six months/one year applicable, subject tofulfilling of all conditions mentioned in the notification dated6.9.2004, the exporter shall be entitled to the rebate of duty paidon excisable goods exported; C

D

vi) that as per notification dated 6.9.2004 on fulfilling of suchprocedure and the conditions as specified in the notification, thereshall be granted rebate of the whole of the duty paid on the excisablegoods falling under the First Schedule to the Central Excise TariffEAct, 1985 exported to any country other than Nepal and Bhutan.As it was found that the exporters were causing great hardship ingetting the remittance certificates within six months, a consciousdecision was taken at the time when Rule 18 of the 2002 Ruleswas enacted and when notification dated 6.9.2004 was issuedFexcluding the applicability of Section 11B. As subsequently theperiod of six months was increased to one year, it appears thatthereafter vide notification dated 1.3.2016, again the applicabilityof Section 11B of the Act was introduced; E

vii) that there is a vast difference and distinction between therefund of duty and the rebate claim; and G

viii) that as Rule 18 is a special provision for the grant of rebate ofduty, general provision of Section 11B of the Act which is forrefund of duty shall not be applicable. Reliance is placed on thedecision of this Court in the case of Collector of Central Excise, H

Jaipur v. Raghuvar (India) Limited, (2000) 5 SCC 299 =2000 (118) ELT 311 (SC).

3.1 Shri Arvind P. Datar, learned Senior Advocate appearing onbehalf of the appellant has heavily relied upon the observations made inparagraphs 13, 14 & 17 of the decision in the case of Raghuvar (India)Limited (supra), in support of his submission that Section 11B of theAct shall not be applicable while considering the claim for rebate ofduty.

Shri Datar, learned Senior Advocate has also relied upon thefollowing decisions of the High Courts of Madras, Allahabad, Punjab &Haryana and Rajasthan taking the view, after following the decision ofthis Court in the case of Raghuvar (India) Limited (supra), that theclaim for rebate of duty under Rule 18 of the 2002 Rules is different anddistinct than the claim for refund under Section 11B of the Act andtherefore the limitation prescribed under Section 11B of the Act shall notbe applicable with respect to claim for rebate of duty paid:

1. Deputy Commissioner of Central Excise v. M/s DorcasMarket Makers Pvt. Ltd., 2015 SCC OnLine Mad 8492 :2015 (321) ELT 45(Madras);

2. Camphor and Allied Products Ltd. v. Union of India, 2019SCC OnLine All 4705 : 2019 (368) ELT 865 (Allahabad);

3. JSL Lifestyle Ltd. v. Union of India, 2015 SCC OnLineP&H 13023 : 2015 (326) ELT 265 (P&H) (paragraphs14,15,16 & 17); and

4. Gravita India Ltd. v. Union of India, 2016 (334) ELT 321(Rajasthan) (Paragraphs 12, 14 & 16).

3.2 Shri Arvind P. Datar, Learned Senior Advocate appearing onbehalf of the appellant has further submitted that the decision of thisCourt in the case of Union of India v. Uttam Steel Limited, (2015) 13SCC 209 = 2015 (319) ELT 598 (SC) is distinguishable and shall notbe applicable while considering the claim for rebate of duty payableunder Rule 18 r/w notification dated 6.9.2004. It is submitted that in thecase before this Court, this Court was considering Rule 12 of the 2002Rules, which subsequently came to be deleted by insertion of Rule 18.

3.3 Learned senior counsel appearing on behalf of the appellanthas also relied upon the decision of the Gujarat High Court in the case of A

B

C

D

E

F

G

H

ACosmonaut Chemicals v. Union of India, 2009 (233) ELT 46(Gujarat) in support of his submission that as observed and held by theGujarat High Court mitigating circumstances and when the assessee isnot in a position to get the necessary documents within the prescribedperiod of limitation, the refund under Section 11B of the Act cannot bedenied. It is submitted that it is observed and held by the Gujarat HighBCourt in the aforesaid decision that any procedure prescribed by asubordinate legislation has to be in aid of justice and proceduralrequirements cannot be read so as to defeat the cause of justice. It issubmitted that applying the same to the rebate claim, many a times theexporters were facing the difficulty in getting the requisite remittanceCcertificates and therefore in such a situation the exporter who has infact exported the goods and earned the foreign remittance cannot bedenied the rebate claim.

3.4 Shri Arvind P. Datar, learned Senior Advocate appearing onbehalf of the appellant has submitted that the object and purpose of theDrebate of duty on export of goods can be termed as “incentive” to boostthe export and earn foreign remittance. It is submitted that therefore ifsuch a claim for rebate of duty is denied despite earning foreign remittanceon the goods exported on such technical grounds, it may defeat the objectand purpose for grant of rebate.

E3.5 Making the above submissions and relying upon the aforesaiddecisions, it is prayed to allow the present appeal.

4. The present appeal is vehemently opposed by Shri SiddhantKohli, learned Advocate appearing on behalf of the revenue.

4.1 It is vehemently submitted by the learned counsel appearingFon behalf of the revenue that as such the issue involved in the presentcase is squarely covered by the decision of this Court in the case ofUttam Steel Ltd. (supra). It is submitted that in the case of UttamSteel Ltd. (supra), it is specifically observed and held by this Court thatthe period of limitation prescribed under Section11B of the Act shall beGapplicable with respect to rebate of duty. It is submitted that afterconsidering the decision of this Court in the case of Mafatlal IndustriesLtd. v. Union of India, (1997) 5 SCC 536 = 1997 (89) ELT 247(SC),it is observed and held that the claim for rebate can only be made underSection 11B of the Act within the period of limitation stated therefor.

H

H

4.2 It is further submitted that the decision of this Court in thecase of Raghuvar (India) Ltd. (supra), which has been relied upon onbehalf of the appellant, shall not be applicable at all and/or the same shallnot be of any assistance to the appellant. It is submitted that in the casebefore this Court, this Court was considering Section 11A of the Act,vis-à-vis Rule 57-I. It is submitted that as it was found that Section 11Aof the Act is a general provision for recovery of duties not levied or notpaid or short-levied or short-paid or erroneously refunded, the same shallnot be made applicable with respect to recovery of credit wrongly availedof or utilized in an irregular manner under Rule 57-I. It is submitted thatthere is a vast difference and distinction between Section 11A and Section11B of the Act. It is submitted that as per Explanation (A) to Section11B of the Act, for the purpose of Section 11B, “refund” includes rebateof duty of excise… It is submitted that therefore the period of limitationof one year prescribed under Section 11B of the Act shall be applicablewith respect to the rebate of duty.

4.3 It is further submitted that as per Section 11B (1) of the Act,an application for rebate of duty has to be made before the expiry of oneyear from the “relevant date”. It is submitted that as per Explanation(B) to Section 11B of the Act, “relevant date” means in the case ofgoods exported out of India where a refund of excide duty paid is availablein respect of the goods themselves or, as the case may be, the excisablematerials used in the manufacture of such goods. It is submitted thattherefore in Section 11B of the Act, there is a specific reference to therebate of duty and such claim of rebate of duty shall have to be madebefore the expiry of one year from the relevant date. It is submitted thattherefore the period of limitation prescribed under Section 11B of theAct shall be applicable with respect to claim for rebate of duty also.

4.4 It is further submitted by the learned counsel appearing onbehalf of the revenue that Section 11B of the Act can be said to be aparent statute and Rule 18 and notification dated 6.9.2004 can be said tobe a subordinate legislation. Notification dated 6.9.2004 which has beenissued in exercise of powers under Section 37 of the Act provides for“procedure”. It is submitted that as per Section 37(xxiii) of the Act, theCentral Government may make rules to specify the form and manner inwhich application for refund shall be made under Section 11B of theAct. It is submitted that in exercise of such powers, notification dated6.9.2004 has been issued in exercise of powers conferred under Rule 18of the 2002 Rules.

A

B

C

D

E

F

G

H

A4.5 It is further submitted that Rule 18 cannot be read in isolation.It is further submitted that Rule 18 being subordinate legislation cannotoverride the main statute. It is submitted that notification dated 6.9.2004cannot be read de hors the statute and Section 11B of the Act.

4.6 It is further submitted that the rebate of duty is an exportBincentive benefit granted under the subordinate legislation and any suchbenefit has to be governed by the statute.

4.7 It is further submitted by the learned counsel appearing onbehalf of the revenue that the decision of this Court in the case ofRaghuvar (India) Ltd. (supra), which has been relied upon by theCAllahabad High Court in the case of Camphor & Allied Products Ltd.(supra), shall not be applicable to the facts of the case on hand, whileconsidering the rebate claim. It is submitted that the question involved inthe case of Raghuvar (India) Ltd. (supra) was with respect to recoveryof Modvat credit wrongly availed of. In the said case, it was themanufacturer who claimed the benefit of Section 11A of the Act byDstating that no recovery could be made from him during the period oflimitation of one year under Section 11A of the Act. It is submitted thatthis Court negated the said claim on the reasoning that recoverycontemplated under Section 11A of the Act is different and distinct fromrecovery of Modvat wrongly claimed. It is submitted that for reachingEthat conclusion this Court considered the separate nature of dutiescontemplated under Section 11A of the Act and the Modvat Schemeenvisaged by Rule 57A to 57P of the Rules prevalent at the relevanttime. It is submitted that in the present case the rebate claim shall begoverned by Section 11B of the Act. It is submitted that by virtue ofExplanation (A) appended to Section 11B of the Act, the claims of rebateFof excise duty have been specifically included in the statutory definitionof claims for refund.

4.8 Learned counsel appearing on behalf of the revenue has alsorelied upon the subsequent decision of the Madras High Court in thecase of Hyundai Motors India Limited v. Department of Revenue,G2017 (355) ELT 342 (Madras) (paras 24 & 25) as well as the decisionof the Bombay High Court in the case of Everest Flavours Ltd. v.Union of India, 2012 (282) ELT 481 (Bombay) (paras 10,11 &12).

4.9 Learned counsel appearing on behalf of the Revenue hasHfurther submitted that if the submission on behalf of the appellant that the period of limitation of one year prescribed under Section 11B of theAct shall not be applicable with respect to claim for rebate is accepted,in that case, there shall not be any limitation at all and at any time, exportercan make an application for rebate claim. It is submitted that thereforeRule 18 and notification dated 6.9.2004 are to be read harmoniouslywith the parent statute – Section 11B of the Act.

4.10 Making above submissions and relying upon the decision ofthis Court in the case of Uttam Steel Ltd. (supra) and the decision ofthe Madras High Court in the case of Hyundai Motors India Ltd.(supra) and the decision of the Bombay High Court in the case ofEverest Flavours Ltd. (supra), it is prayed to dismiss the present appeal.

5. In rejoinder, Shri Arvind P. Datar, learned Senior Advocateappearing on behalf of the appellant has submitted that if the contentionon behalf of the appellant that the period of limitation of one yearprescribed under Section 11B of the Act shall not be applicable withrespect to rebate claim is accepted, in that case also, the exporter has tomake an application within a reasonable time.

6. We have heard Shri Arvind P. Datar, learned Senior Advocateappearing on behalf of the appellant and Shri Siddhant Kohli, learnedAdvocate appearing on behalf of the Revenue at length.

The short question which is posed for consideration of this Courtis, “whether the claim for rebate of duty provided under Rule 18 of theCentral Excise Rules, 2002, the period of limitation prescribed underSection 11B of the Central Excise Act, 1994 shall be applicable or not?

7. It is the case on behalf of the appellant that as in Rule 18 of the2002 Rules and notification dated 6.9.2004, there is no mention to theapplicability of Section 11B of the Act and that the claim for rebate ofduty under Rule 18 is different and distinct than that of the claim forrefund of duty under Section 11B of the Act, the period of limitationprescribed under Section 11B of the Act shall not be applicable, whileconsidering the claim for rebate of duty under Rule 18 of the 2002 Rules.

8. While considering the aforesaid issue, first of all, relevantprovisions of Section 11B of the Act are required to be referred to andconsidered. Section 11B of the Act is as under:

“11-B. Claim for refund of [duty and interest, if any, paid onsuch duty].— (1) Any person claiming refund of any [duty of A

B

C

D

E

F

G

H

A

B

C

D

E

F

G

H

excise and interest, if any, paid on such duty] may make anapplication for refund of such [duty and interest, if any, paid onsuch duty] to the [Assistant Commissioner of Central Excise orDeputy Commissioner of Central Excise] before the expiry of [oneyear] [from the relevant date] [in such form and manner] as maybe prescribed and Provided that where an application for refund has been madebefore the commencement of the Central Excises and CustomsLaws (Amendment) Act, 1991 (40 of 1991), such application shallbe deemed to have been made under this sub-section as amendedby the said Act and the same shall be dealt with in accordancewith the provisions of sub-section (2) as substituted by that Act:]

Provided further that the limitation of [one year] shall not applywhere any [duty and interest, if any, paid on such duty] has beenpaid under protest.

[* * *]

[(2) If, on receipt of any such application, the[Assistant Commissioner of Central Excise orDeputy Commissioner of Central Excise is satisfied that the wholeor any part of the [duty of excise and interest, if any, paid on suchduty] paid by the applicant is refundable, he may make an orderaccordingly and the amount so determined shall be credited to theFund:

Provided that the amount of [duty of excise and interest, if any,paid on such duty] as determined by the [Assistant Commissionerof Central Excise or Deputy Commissioner of Central Excise]under the foregoing provisions of this sub-section shall, instead ofbeing credited to the Fund, be paid to the applicant, if such amountis relatable to—

(a) rebate of duty of excise on excisable goods exported out ofIndia or on excisable materials used in the manufacture of goodswhich are exported out of India; (b) unspent advance deposits lying in balance in the applicant’saccount current maintained with the [Principal Commissioner ofCentral Excise or Commissioner of Central Excise];

(c) refund of credit of duty paid on excisable goods used as inputsin accordance with the rules made, or any notification issued, underthis Act; (d) the [duty of excise and interest, if any paid on such duty] paidby the manufacturer, if he had not passed on the incidence ofsuch [duty and interest, if any, paid on such duty] to any otherperson; (e) the [duty of excise and interest, if any paid on such duty]borne by the buyer, if he had not passed on the incidence ofsuch [duty and interest, if any, paid on such duty] to any otherperson; (f) the [duty of excise and interest, if any paid on such duty] borneby any other such class of applicants as the Central Governmentmay, by notification in the Official Gazette, specify:

Provided further that no notification under clause (f) of the firstproviso shall be issued unless in the opinion of the CentralGovernment the incidence of [duty and interest, if any, paid onsuch duty] has not been passed on by the persons concerned toany other person.

(3) Notwithstanding anything to the contrary contained in anyjudgment, decree, order or direction of the Appellate Tribunal orany Court or in any other provision of this Act or the rules madethereunder or any other law for the time being in force, no refundshall be made except as provided in sub-section (2).

(4) Every notification under clause (f) of the first proviso to sub-section (2) shall be laid before each House of Parliament, if it issitting, as soon as may be after the issue of the notification, and, ifit is not sitting, within seven days of its reassembly, and the CentralGovernment shall seek the approval of Parliament to the notificationby a resolution moved within a period of fifteen days beginningwith the day on which the notification is so laid before the Houseof the People and if Parliament makes any modification in thenotification or directs that the notification should cease to haveeffect, the notification shall thereafter have effect only in suchmodified form or be of no effect, as the case may be, but withoutprejudice to the validity of anything previously done thereunder.

AB

C

D

E

F

G

H

(5) For the removal of doubts, it is hereby declared that anynotification issued under clause (f) of the first proviso to sub-section (2), including any such notification approved or modifiedunder sub-section (4), may be rescinded by the CentralGovernment at any time by notification in the Official Gazette.]

A

[Explanation. — For the purposes of this section, —

B

(A) “refund” includes rebate of duty of excise on excisable goodsexported out of India or on excisable materials used in themanufacture of goods which are exported out of India; (B) “relevant date” means, —

C

(a) in the case of goods exported out of India where a refund ofexcise duty paid is available in respect of the goods themselvesor, as the case may be, the excisable materials used in themanufacture of such goods, —

(i) if the goods are exported by sea or air, the date on which theship or the aircraft in which such goods are loaded, leaves India,or D

(ii) if the goods are exported by land, the date on which suchgoods pass the frontier, or E(iii) if the goods are exported by post, the date of despatch ofgoods 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 anyfactory, the date of entry into the factory for the purposesFaforesaid;

(c) in the case of goods to which banderols are required to beaffixed if removed for home consumption but not so required whenexported outside India, if returned to a factory after having beenremoved from such factory for export out of India, the date ofentry into the factory; G

(d) in a case where a manufacturer is required to pay a sum, fora certain period, on the basis of the rate fixed by the CentralGovernment by notification in the Official Gazette in full dischargeof his liability for the duty leviable on his production of certaingoods, if after the manufacturer has made the payment on the H

basis of such rate for any period but before the expiry of thatperiod such rate is reduced, the date of such reduction; [(e) in the case of a person, other than the manufacturer, the dateof purchase of the goods by such person;]

[(ea) in the case of goods which are exempt from payment ofduty by a special order issued under sub-section (2) of Section 5-A, the date of issue of such order;]

[(eb) in case where duty of excise is paid provisionally under thisAct or the rules made thereunder, the date of adjustment of dutyafter the final assessment thereof;]

[(ec) in case where the duty becomes refundable as a consequenceof 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.]”

9. On a fair reading of Section 11B of the Act, it can safely besaid that Section 11B of the Act shall be applicable with respect to claimfor rebate of duty also. As per Explanation (A) to Section 11B, “refund”includes “rebate of duty” of excise. As per Section 11B(1) of the Act,any person claiming refund of any duty of excise (including the rebate ofduty as defined in Explanation (A) to Section 11B of the Act) has tomake an application for refund of such duty to the appropriateauthority before the expiry of one year from the relevant dateand only in the form and manner as may be prescribed. The “relevantdate” is defined under Explanation (B) to Section 11B of the Act, whichmeans in the case of goods exported out of India where a refund ofexcise duty paid is available in respect of the goods themselves or, as thecase may be, the excisable materials used in the manufacture of goods…..Thus, the “relevant date” is relatable to the goods exported. Therefore,the application for rebate of duty shall be governed by Section 11B ofthe Act and therefore shall have to be made before the expiry of oneyear from the “relevant date” and in such form and manner as may beprescribed. The form and manner are prescribed in the notification dated6.9.2004. Merely because in Rule 18 of the 2002 Rules, which is anenabling provision for grant of rebate of duty, there is no reference toSection 11B of the Act and/or in the notification dated 6.9.2004 issued inexercise of powers conferred by Rule 18, there is no reference to the A

B

C

D

E

F

GH

Aapplicability of Section 11B of the Act, it cannot be said that the provisioncontained in the parent statute, namely, Section 11B of the Act shall notbe applicable, which otherwise as observed hereinabove shall beapplicable in respect of the claim of rebate of duty.

10. At this stage, it is to be noted that Section 11B of the Act is aBsubstantive provision in the parent statute and Rule 18 of the 2002 Rulesand notification dated 6.9.2004 can be said to be a subordinate legislation.The subordinate legislation cannot override the parent statute. Subordinatelegislation can always be in aid of the parent statute. At the cost ofrepetition, it is observed that subordinate legislation cannot override theparent statute. Subordinate legislation which is in aid of the parent statuteChas to be read in harmony with the parent statute. Subordinate legislationcannot be interpreted in such a manner that parent statute may becomeotiose or nugatory. If the submission on behalf of the appellant that asthere is no mention/reference to Section 11B of the Act either in Rule 18or in the notification dated 6.9.2004 and therefore the period of limitationDprescribed under Section 11B of the Act shall not be applicable withrespect to claim for rebate of duty is accepted, in that case, the substantiveprovision – Section 11B of the Act would become otiose, redundant and/or nugatory. If the submission on behalf of the appellant is accepted, inthat case, there shall not be any period of limitation for making anapplication for rebate of duty. Even the submission on behalf of theEappellant that in such a case the claim has to be made within a reasonabletime cannot be accepted. When the statute specifically prescribes theperiod of limitation, it has to be adhered to.

11. It is required to be noted that Rule 18 of the 2002 Rules hasbeen enacted in exercise of rule making powers under Section 37(xvi)Fof the Act. Section 37(xxiii) of the Act also provides that the CentralGovernment may make the rules specifying the form and manner inwhich application for refund shall be made under section 11B of the Act.In exercise of the aforesaid powers, Rule 18 has been made andnotification dated 6.9.2004 has been issued. At this stage, it is requiredGto be noted that as per Section 11B of the Act, an application has to bemade in such form and manner as may be prescribed. Therefore, theapplication for rebate of duty has to be made in such form and manneras prescribed in notification dated 6.9.2004. However, that does not meanthat period of limitation prescribed under Section 11B of the Act shallnot be applicable at all as contended on behalf of the appellant. MerelyH

because there is no reference of Section 11B of the Act either in Rule18 or in the notification dated 6.9.2004 on the applicability of Section11B of the Act, it cannot be said that the parent statute – Section 11B ofthe Act shall not be applicable at all, which otherwise as observedhereinabove shall be applicable with respect to rebate of duty claim.

12. As such, the issue involved in the present appeal is squarelycovered by the decision of this Court in the cases of Mafatlal IndustriesLtd. (supra) and Uttam Steel Limited(supra). After taking intoconsideration Section 11B of the Act and the notification and procedureunder Rule 12, it is specifically observed and held that rebate of duty ofexcise on excisable goods exported out of India would be covered underSection 11B of the Act. After referring to the decision of this Court inthe case of Mafatlal Industries Ltd. (supra), it is further observed inthe case of Uttam Steel Limited(supra) that such claims for rebatecan only be made under Section 11B within the period of limitation statedtherefor. On the argument based on Rule 12, this Court has specificallyobserved that such argument has to be discarded as it is not open tosubordinate legislation to dispense with the requirements of Section 11B.The aforesaid observations made by this Court in the case of UttamSteel Limited(supra) clinches the issue. The said decision has beensubsequently rightly followed by the Madras High Court in the case ofHyundai Motors India Limited (supra).

13. Now so far as the reliance placed upon the decision of thisCourt in the case of Raghuvar (India) Ltd. (supra), relied upon by thelearned senior counsel on behalf of the appellant is concerned, onconsidering the relevant provisions of Central Excise Act, namely, Sections11A & 11B of the Act, we are of the opinion that the said decision shallnot be applicable with respect to the period of limitation prescribed underSection 11B of the Act with respect to claim for rebate of duty. Thequestion involved in the Raghuvar (India) Ltd. (supra) was with respectto recovery of Modvat wrongly availed. In that case, it was themanufacturer who claimed the benefit under Section 11A of the Act bystating that no recovery could be made beyond the period of one yearlimitation under Section 11A of the Act. This Court negated that claimby observing that recovery contemplated under Section11A is differentand distinct from the Modvat wrongly availed. For reaching thatconclusion, this Court considered that the recovery of Modvat would begoverned by a special provision contained in Rule 57-I and therefore the A

B

D

E

F

G

H

Aprovision of Section 11A of the Act, which is a general provision, shallnot be applicable. In the present case, as observed hereinabove, section11B of the Act shall be specifically applicable with respect to claim forrebate of duty. Therefore, as such, section 11B of the Act cannot be saidto be a general provision. Therefore, the period of limitation prescribedunder Section 11B of the Act shall have to be made applicable withBrespect to claim for rebate of duty.

The decision of the Allahabad High Court in the case of Camphorand Allied Products Ltd. (supra) and other decisions of the MadrasHigh Court, Punjab & Haryana High Court and Rajasthan High Courttaking a contrary view, relying upon the decision of this Court in the caseCof Raghuvar (India) Ltd. (supra), are not a good law and shall not beof any assistance to the appellant.

14. At this stage, the decision of the Bombay High Court in thecase of Everest Flavours Ltd.(supra) is required to be referred to. Inthe said case, the Bombay High Court was considering the limitationDprescribed under Section 11B of the Act with respect to rebate of exciseduty. In the said decision, it is specifically observed that since statutoryprovision for refund in Section 11B ibid brings within its purview, a rebateof excise duty, Rule 18 of the 2002 Rules cannot be read independent ofrequirement of limitation prescribed in Section 11B. Before the BombayEHigh Court, the decision of the Madras High Court in the case of DorcasMarket Makers Pvt. Ltd. (supra), which is relied upon on behalf of theappellant was also pressed into service by the assessee. However, theBombay High Court did not agree with the said decision. The BombayHigh Court also distinguished the decision of this Court in the case ofRaghuvar (India) Ltd. (supra). In paragraphs 7 to 10, it is observedFand held as under:

“7. Counsel appearing on behalf of the petitioner sought to placereliance on a decision of the Supreme Court in Collector ofCentral Excise v. Raghuvar (India) Ltd. – (2000) 5 SCC299. The issue which fell for determination before the SupremeGCourt, inter alia, was whether action for the recovery of MODVATcredit wrongly availed of or utilised in an irregular manner underRule 57-I would be governed by the period of limitation of sixmonths (at the relevant time) prescribed in Section 11A. TheSupreme Court noted that Section 11A is not an omnibus provisionwhich provides any period of limitation for all or any and every H

kind of action to be taken under the Act or the Rules but would beattracted only to cases where any duty of excise has not beenlevied or paid or has been short-levied or short-paid or erroneouslyrefunded. The judgment of the Supreme Court holds that Rule57-I envisages disallowance of the credit and consequentialadjustment in the credit account or the account current maintainedby the manufacturer and it is only if such adjustments are notpossible, that an amount equivalent to the credit illegally availedof could be recovered. Consequently Rule 57-I, it was held, couldnot involve a case of manufacture and removal of excisable goodswithout subjecting such goods to levy or payment in the variouscircumstances enumerated in Section 11-A. Hence, on its ownterms, it was held that Section 11A will have no application oroperation to cases covered under Rule 57-I. The Supreme Courtruled that the situation on hand and the one which is to be dealtwith under Rule 57-I as it stood prior to amendment, did not fallunder any of those contingencies provided in Section 11A.

8. In contrast, in so far as Section 11B is concerned, the provisioncategorically comprehends a rebate of excise duty on excisablegoods exported out of India or on excisable materials used in themanufacture of goods which are exported out of India. Since thestatutory provision for refund in Section 11B brings within its

purview, a rebate of excise duty on goods exported out of India ormaterials used in the manufacture of such goods, Rule 18 cannotbe read independent of the requirement of limitation prescribed inSection 11B. The Judgment of the Supreme Courtin Raghuvar dealt with a situation where Section 11A did not bringwithin its purview an action for the recovery of MODVAT creditwrongly availed of which formed the subject matter of Rule 57-I.It was in this view of the matter that the Supreme Court held thatthe period of limitation prescribed under Section 11A would notapply to an action for recovery of MODVAT credit under Rule57-I. This can have no application in the present situation which isclearly distinctive, in the sense that Section 11B specificallycomprehends an application for rebate of excise duty on goodsexported or materials used in their manufacture.

9. A judgment of the Madras High Court in Dorcas MarketMakers Private Limited, Chennai v. CIT (Appeals) 2012 (281)

A

B

C

D

E

F

G

H

A

B

C

D

E

F

G

H

E.L.T. 227 (Mad.) was sought to be relied upon to submit thatSection 11B of the Central Excise Act would not operate in respectof an application under Rule 18 of the Central Excise Rules, 2002.The learned Single Judge of the Madras High Court held thatwhen a statutory Notification which was issued under Rule 18does not prescribe any time limit, Section 11B would not beattracted. With respect, the learned Single Judge of the MadrasHigh Court has not had due regard to the specific provision ofExplanation (A) to Section 11B of the Act under which theexpression “refund” is defined to include rebate of duty of exciseon excisable goods exported out of India or on excisable materialsused in the manufacture of such goods. The judgment of theSupreme Court in Raghuvar which has been relied upon by thelearned Single Judge of the Madras High Court has already beenconsidered hereinabove.

10. In exercise of the powers conferred by Rule 18, the CentralGovernment has issued a Notification[3]. The Notification prescribesthe conditions and limitations upon which a claim for rebate canbe granted. Among the conditions and limitations under Clause(2) of the Notification is the requirement that the excisable goodsshall be exported within six months from the date on which theywere cleared from the factory of manufacture or warehouse.The procedures are stipulated in Clause (3). Sub-clause (iv)provides for the sealing of goods intended for export, at the placeof dispatch and the exporter shall present goods along with fourcopies of an application in Form ARE-I specified in the Annexureto the Notification to the Superintendent or Inspector of CentralExcise having jurisdiction over the factory of production ormanufacture or warehouse. Sub-clause (v) then stipulates thatthe Superintendent or Inspector shall verify the identity of goodsmentioned in the application, the particulars of the duty paid orpayable and if found in order, shall seal each package or thecontainer and endorse each copy of the application in token ofhaving carried out the examination. The original and duplicatecopies of the application are returned to the exporter. The triplicatecopy of the application is to be sent to the Officer with whom arebate claim is to be filed either by post or by handing over to theexporter in a sealed cover after posting the particulars in the officialrecord or to be sent to the Excise Rebate Audit Section at the place of export in case rebate is to be claimed by electronicdeclaration. Sub-clause (b) of Clause (3) of the Notification makesa provision for presenting a claim for rebate of Central Exciseduty in the following terms:

“(b) Presentation of claim for rebate to Central Excise: —

(i) Claim of the rebate of duty paid on all excisable goods shall belodged along with original copy of the application to the AssistantCommissioner of Central Excise or the Deputy Commissioner ofCentral Excise having jurisdiction over the factory of manufactureor warehouse or, as the case may be, the Maritime Commissioner;

(ii) The Assistant Commissioner of Central Excise or the DeputyCommissioner of Central Excise having jurisdiction over thefactory of manufacture or warehouse or, as the case may be,Maritime Commissioner of Central Excise shall compare theduplicate copy of the application received from the officer ofcustoms with the original copy received from the exporter andwith the triplicate copy received from the Central Excise Officerand if satisfied that the claim is in order, he shall sanction therebate either in whole or in part.”

The provisions of the Notification thus make it abundantly clearthat a mere submission of the ARE-I form does not constitute thepresentation of a claim for rebate of Central Excise. Form ARE-1 in turn has various parts including Part A which deals with thecertification by Central Excise Officer, Part B which deals withcertification by the Officer of Customs and Part D which is theactual Rebate Sanction Order. Moreover, it would be necessaryto take note of the fact that under Section 11BB of the Act, interestis liable to be paid if any duty which is ordered to be refundedunder sub-section (2) of Section 11B to any applicant is notrefunded within three months from the date of receipt of applicationunder sub-section (1) of Section 11B. For the purpose of Section11BB, presentation of the application is the relevant date fromwhich the period of three months has to be reckoned. If thesubmission of the petitioner were to be accepted, viz. that themere presentation of the ARE-1 form would constitute anapplication for rebate of Central Excise Duty, that would defeatthe whole scheme that has been enunciated in Section 11B and A

B

C

D

E

F

G

H

ASection 11BB. Before the application for rebate can be allowed,an exporter has to furnish various documents including a requeston the letterhead of the exporter containing a claim for rebate, theARE-1 numbers and dates, corresponding invoice numbers anddates, the original copy of the ARE-1, invoice issued under Rule11, self-attested copy of shipping bill and self-attested copy of billBof lading together with a Disclaimer Certificate in case where aclaimant is other than the exporter. These requirements have beenspelt out in para 8.3 of the CBEC Excise Manual. The merepresentation of an ARE-1 form does not, therefore, constitute thefiling of a valid application for rebate. An application for refundChas to be filed, together with documentary material as required.We, therefore, do not accept the second submission which hasbeen urged on behalf of the petitioner.”

We are in complete agreement with the view taken by the BombayHigh Court in the case of Everest Flavours Ltd. (supra). ContraryDdecisions of Madras High Court, Allahabad High Court, Punjab &Haryana High Court and Rajasthan High Court, referred to hereinabove,are hereby overruled.

15. In view of the above and for the reasons stated above, it isobserved and held that while making claim for rebate of duty under RuleE18 of the Central Excise Rules, 2002, the period of limitation prescribedunder Section 11B of the Central Excise Act, 1944 shall have to beapplied and applicable. In the present case, as the respective claimswere beyond the period of limitation of one year from the relevant date,the same are rightly rejected by the appropriate authority and the sameare rightly confirmed by the High Court. We see no reason to interfereFwith the impugned judgment and order passed by the High Court. Underthe circumstances, the present appeal fails and deserves to be dismissedand is accordingly dismissed. However, there shall be no order as tocosts.

GDevika Gujral(Assisted by : Shevali Monga, LCRA)

Appeal dismissed.

H