By CA Rajiv Luthia
1) [2022] 145 taxmann.com 220 (SC) [29-11-2022]
CASE: Sansera Engineering Ltd. v. Deputy Commissioner, Large Taxpayer Unit
Background and Facts of the Case:
- 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 on 10-2-2017 to the tune of Rs. 29,47,996/- and Rs. 42,27,928/- under Rule 18 of Central Excise Rules, 2002 (hereinafter referred to as the ‘2002 Rules’) in respect of these exports. Subsequently on 14-2-2017, for the period October 2015 to March 2016, the appellant claimed rebate of Rs. 1,47,27,766/-.
- The original authority rejected the above-mentioned rebate claims as barred by time prescribed under section 11B of the Act. The appellant preferred writ petitions before the learned Single Judge. The learned Single Judge vide common order dated 22-11-2019 dismissed the said writ petitions holding that the claims for rebate were made beyond the period of one year prescribed under section 11B of the Act.
- The judgment and order passed by the learned Single Judge has been confirmed by the Division Bench of the High Court by the impugned judgment and order in Writ Appeal No. 249/2020. Hence, the present appeal.
Arguments put forth:
The Appellants submitted as under:
- Learned Senior Advocate appearing on behalf of the appellant has made the following contentions in support of his submission that for rebate claim, the period prescribed under section 11B of the Act shall not be applicable. 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.
- The rebate of duty is on export of the goods and is in the form of an incentive and on furnishing the form R within six months from the date of export, the exporter is entitled to the rebate of duty on fulfilling the relevant conditions as mentioned in the notification No. 19/2004 dated 6-9-2004.
- Neither Rule 18 nor notification dated 6-9-2004 specifically provided for the applicability of section 11B of the Act for the period between 2000 to 2016;
- Notification dated 1-3-2016, notification dated 6-9-2004 came to be amended under heading “(3) Procedures” and the words “before the expiry of the period specified in section 11B of the Act” came to be inserted. Therefore, a conscious decision was taken that for the period between 2000 to 2016, the period prescribed under section 11B of the Act shall not be applicable.
- In absence of specific provision either in Rule 18 or in notification dated 6-9-2004 which came to be issued in exercise of powers under section 37 of the Act specifically making Section 11B of the Act applicable which provides for the limitation to make an application within six months/one year applicable, subject to fulfilling of all conditions mentioned in the notification dated 6-9-2004, the exporter shall be entitled to the rebate of duty paid on excisable goods exported.
- As per notification dated 6-9-2004 on fulfilling of such procedure and the conditions as specified in the notification, there shall be granted rebate of the whole of the duty paid on the excisable goods falling under the First Schedule to the Central Excise Tariff Act, 1985 exported to any country other than Nepal and Bhutan. As it was found that the exporters were causing great hardship in getting the remittance certificates within six months, a conscious decision was taken at the time when Rule 18 of the 2002 Rules was enacted and when notification dated 6-9-2004 was issued excluding the applicability of section 11B. As subsequently the period of six months was increased to one year, it appears that thereafter vide notification dated 1-3-2016, again the applicability of section 11B of the Act was introduced.
- Rule 18 is a special provision for the grant of rebate of duty, general provision of section 11B of the Act which is for refund of duty shall not be applicable. Reliance is placed on the decision of this Court in the case of CCE v. Raghuvar (India) Ltd. 2000 taxmann.com 1349/[2000] 5 SCC 299 =2000.
- Below mentioned case laws were relied upon by the Authorized Representative
• Deputy Commissioner of Central Excise Commissionrate v. Dorecas Market Makers (P.) Ltd. [2015] 56 taxmann.com 401/50 GST 643/2015 SCC
• Camphor and Allied Products Ltd. v. Union of India 2019 SCC
• JSL Lifestyle Ltd. v. Union of India [2015] 62 taxmann.com 46/52 GST 373/2015 SCC OnLine P&H 13023: 2015 (326) ELT 265 (P&H)
• Gravita India Ltd. v. Union of India [2016] 69 taxmann.com 195/2016 (334) ELT 321 (Rajasthan)
The Respondents submitted as under:
- Section 11B of the Act can be said to be a parent statute and Rule 18 and notification dated 6-9-2004 can be said to be a subordinate legislation. Notification dated 6-9-2004 which has been issued 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, the Central Government may make rules to specify the form and manner in which application for refund shall be made under section 11B of the Act. It is submitted that in exercise of such powers, notification dated 6-9-2004 has been issued in exercise of powers conferred under rule 18 of the 2002 Rules.
- Rule 18 cannot be read in isolation. Rule 18 being subordinate legislation cannot override the main statute. Notification dated 6-9-2004 cannot be read de hors the statute and section 11B of the Act. The decision of this Court in the case of Raghuvar (India) Ltd. (supra), which has been relied upon by the Allahabad High Court in the case of Camphor & Allied Products Ltd. (supra), shall not be applicable to the facts of the case on hand, while considering the rebate claim.
- Below mentioned case laws were relied upon by the Respondent and prayed to dismiss the Appeal
• Mafatlal Industries Ltd. v. Union of India 1997 (89) ELT 248 (SC)
• Union of India v. Uttam Steel Ltd., (2015) 13 SCC 209 = 2015 (319) ELT 598 (SC)
Decision:
- It is to be noted that section 11B of the Act is a substantive provision in the parent statute and rule 18 of the 2002 Rules and notification dated 6-9-2004 can be said to be a subordinate legislation. The subordinate legislation cannot override the parent statute. Subordinate legislation can always be in aid of the parent statute.
- Merely because there is no reference of section 11B of the Act either in rule 18 or in the notification dated 6-9-2004 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 hereinabove shall be applicable with respect to rebate of duty claim.
- The decision held in the case of Raghuvar (India) Ltd. (supra), relied upon by the learned senior counsel on behalf of the appellant shall not be applicable with respect to the period of limitation prescribed under section 11B of the Act with respect to claim for rebate of duty.
- After referring to the decision of this Court in the case of Mafatlal Industries Ltd. (supra), it is further observed in the case of Uttam Steel Ltd. (supra) that such claims for rebate can only be made under section 11B within the period of limitation stated therefor.
- Therefore, the decision was upheld, and the Appeal was dismissed.
2) [2022] 145 taxmann.com 648 (TELANGANA)
CASE: District Roads and Buildings v. Union of India
Background and Facts of the Case:
- The petitioner is a State Government department and is engaged in activities related to State Government roads and buildings and providing services in relation thereto, but it was not registered with the service tax department, nor did it make any service tax payment under section 69 of Chapter V of the Finance Act, 1994, though it was a service provider.
- The department issued a show cause notice by invoking the extended period of limitation and alleged the demand of tax on the payments received for road cutting restoration charges from various parties on the right of way for laying optic fibre cables passing through Government land under their jurisdiction during the period from August 2012 to March, 2016. The petitioner did not file any reply to the same.
- The services rendered by the petitioners were classified as taxable viz “Renting of Immovable Property Service” and the order confirmed the demand of Rs. 49,25,373/- along with applicable interest and penalty and late fees. The said Order in Original was appealable. However, no appeal was filed by the petitioner within the limitations period for filing Appeal.
- Long after the limitation period for filing appeal was over, the present writ petition came to be filed.
Arguments put forth:
The Appellants submitted as under:
- Because of lapse on the part of certain officials, appeal could not be filed against the impugned order-in-original dated 16-11-2018 and the limitation period had long expired. Insofar the impugned notice dated 17-3-2021 is concerned, the Authorized Representative submitted that petitioner was not aware of this notice as a copy of the said notice was not marked to the petitioner.
The Respondents submitted as under:
- Learned Special Government Pleader further submits that if an interim stay is not granted, the account of the petitioner may be attached under section 87(B) of the Act.
Proceedings:
- On the next date, petitioner shall inform the Court about the officials, who were responsible for not filing the appeal against the impugned order-in-original dated 16-11-2018 and what steps have been taken against them.
- Petitioner shall deposit 25% of the tax levied in terms of the impugned order-in-original dated 16-11-2018 within thirty days from today.
- On such deposit, respondents shall not act upon the notice dated 17-3-2021.
Decision:
- Since the Petitioner did not furnish the names of the officers responsible for the present state of affairs, even after providing an opportunity, and also considering the fact that the writ petition has been filed long after expiry of the limitation period for filing appeal, the Writ Petition was not entertained and hence dismissed.