Dorcas Market Makers Pvt. Ltd. vs Commissioner of Central Excise

N. Kirubakaran, J.—The petitioner, who is aggrieved by the denial of rebate of the excise duty already paid, is before this Court. The petitioner exported Medimix Ayurvedic Toilet Soaps during the period 21-4-2006 to 26-10-2006. The excise duty was already paid by the manufacturer and the petitioner only sought for rebate of the said excise duty as the petitioner was a Merchant Exporter of the said goods. The petitioner made an application vide Form C dated 17-6-2008 to the tune of Rs. 28,26,974/- under Rule 18 of Central Excise Rules, 2002 for rebate of the duty paid on the said exported goods, before the Assistant Commissioner of Central Excise. After receipt of said application, a show cause notice dated 24-6-2008 was issued and a reply was sent by the petitioner in respect of the said show cause notice. After adjudication, the second respondent rejected the rebate claim on 21-2-2008 and the same was confirmed by the first respondent by an order-in-appeal No. 8/2010 (M-IV), dated 30-7-2010. The said order passed by the first respondent is under challenge before this Court.

Mr. M. Joseph Prabakar, learned counsel appearing for the petitioner submits that the petitioner is entitled to rebate as per the Notification No. 19 of 2004 dated 6-9-2004, wherein, no limitation has been prescribed for claiming rebate. However, the respondents, by relying upon Section 11B of Central Excise Act 1944, erroneously rejected the claim on the basis of limitation. The learned counsel pointed out that from clause iv of the earlier Notification No. 41/94, dated 12-9-1994 which dealt with the rebate of duty at the relevant point of time, that claim has to be made within the time limit prescribed u/s 11B of Central Excise and Salt Act, 1944. Whereas in the present Notification No. 19/2004 no such limitation has been prescribed. In this regard, the learned counsel relied upon the judgment of the Apex Court in the case Collector of Central Excise, Jaipur Vs. M/s. Raghuvar (India) Ltd., wherein, the Apex Court dealt with the question as to whether the limitation prescribed u/s 11A of the Central Excise and Salt Act 1944 would be applicable to any action taken under Rule 57(i) of the Central Excise Rules, 1944. The Supreme Court categorically held that the time limit prescribed under Rule 57-I of the Central Excise Rules alone is applicable and the said rule is not subject to Section 11Aof the Act. Similarly Section 11B is not applicable and only Rule 18 alone is applicable. Therefore, he seeks for setting aside the order dated 30-7-2010 and prays for rebate.

On the other hand, Mr. P. Mahadevan, Standing counsel for Customs and Central Excise Department would submit that when the statute prescribes the time limit u/s 11B of Central Excise and Salt Act, the Notification issued under the Act and the Rules cannot be construed independently. He would further submit that when there is a conflict, the statute alone will prevail over the rules. If an application is filed beyond one year time as prescribed u/s 11B of the Act, the same shall be rejected and that was done by the authorities. Therefore, no interference is called for.

Heard both sides and perused the records.

There is no dispute as regards the export made by the petitioner as Merchant Exporter during the relevant period, namely, 21-4-2006 and 26-10-2006 and filing an application on 17-6-2008. The question to be decided is whether the time limit prescribed u/s 11B of Central Excise Act, 1944 is applicable to the rebate claim filed under Rule 18 of the Central Excise Rules or to go by the notification issued under Rule 18 of the Central Excise Rules which prescribes no time limit. Rule 18 of the Central Excise Rules, 2002 speaks about rebate of duty and the same is extracted as follows:

Rule 18. Rebate of duty. - Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification.

Explanation - "Export" includes goods shipped as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft.

As per Rule 18 rebate of duty paid on excisable goods would be as per the notification issued under Rule 18. The Notification No. 19 of 2004 dated 6-9-2004 prescribes conditions, limits and procedures and other details elaborately. Clause 2d of the notification deals with rebate claim, which is extracted as follows:-

2d. the rebate claim by filing electronic declaration shall be allowed from such place of export and such date, as may be specified by the Board in this behalf;

The Notification No. 41/94 dated 12-9-1994 which was the previous notification in respect of the rebate duty for the earlier periods gives the details about the procedures. In the earlier Notification No. 41 of 1994 in clause (iv), it has been specifically stated that the claim for rebate of duty has to be made within time limit as specified u/s 11B of the Central Excise and Salt Act, 1944 whereas, no such condition has been prescribed in the present Notification No. 19 of 2004.

A comparison of earlier Notification No. 41/94 dated 12-9-1994 and Notification No. 19/2004 dated 6-9-2004, shows that an apparent omission is the time limit in the later notification, viz., the omission of the time limit as per Section 11B of the Central Excise Act. It is only a conscious omission when all other conditions are retained in the Notification No. 19 of 2004. Once Rule 18 of the Central Excise Rules gives the power to the authorities to issue notification prescribing conditions, limitation and procedures, the same have to be followed. What is not prescribed in the notification cannot be imported into the said notification. No time limit has been prescribed in the relevant Notification No. 19 of 2004 dated 6-9-2004. When the statutory notification issued under Rule 18 does not prescribe any time limit. Section 11B is not applicable, and based on which the benefit cannot be denied to the petitioner. The Hon''ble Supreme Court in Collector of Central Excise, Jaipur Vs. M/s. Raghuvar (India) Ltd., dealt with a question whether 6 months time prescribed u/s 11A of the Central Excise Act would be applicable or under Rule 57-I of the Central Excise and Salt Rules, 1944 for the recovery from the manufacturer. The manufacturer took a defence that the recovery could be made u/s 11A of the Central Excise Act within 6 months and not under Rule 57-I and that the claim of the department was beyond 6 months, the amount could not be recovered. The Supreme Court elaborately dealt with the matter and held that Section 11A of the Central Excise and Salt Act, 1944 would have no application to any action taken under Rule 57-I of the Central Excise and Salt Rules, 1944 and Rule 57-I is not in any manner subject to Section 11A of the Act. The above judgment would make it clear that Rule will act independently and any action taken under the rule to be considered independently. Therefore, Rule 18-B is not subject to Section 11A of the Act. In this case, the claim is with regard to the rebate of the excise duty already paid by the manufacturer under Rule 18. If the said judgment is taken into consideration, the notification issued under Rule 18 of the Central Excise Rules which prescribes no time limit alone is applicable and Section 11B of Central Excise Act which prescribes 6 months time for claiming rebate would not be applicable to deny the rebate claim of the petitioner.

Though learned counsel Mr. Mahadevan contended that there is an alternative remedy available to the petitioner, there is no necessity to send the petitioner to avail alternative remedy, as facts are before this Court. Moreover, the question of application of either statue or notification issued under rule is the only issue which has been done by this Court. Availability of alternative remedy is not an absolute bar for this Court to exercise powers under Article 226.

In view of the above, the order passed by the second respondent is quashed and the 2nd respondent is directed to pay the rebate amount claimed by the petitioner within six weeks from the date of receipt of a copy of this order. With the above direction, the writ petition is allowed.