Delhi HC rules Central Excise Duty rebate claim filed after expiry of 1 year as ineligible

Facts:

Orient Micro Abrasives Limited ('the Petitioner' or 'Orient') has filed a writ petition in the Hon'ble Delhi High Court ('the Delhi HC') vide writ petition no. W.P.(C) 7683/2019 versus the Union of India ('UOI' or 'the Respondent') seeking quashing and setting aside of Order No.692/18 - CX, December 10th, 2018, passed by the Principal Commissioner and Additional Secretary to the Government of India, in his capacity as Revisionary Authority, under Section 35EE of the Central Excise Act, 1944 ('the Excise Act').

On October 30th, 2013, the Petitioner filed a claim, for rebate of central excise duty, paid on Chlorinated Paraffin Plasticisers, exported by the Petitioner as a merchant-exporter, to USA, during the period June 6th, 2012 to June 8th, 2012.

Applications for rebate of Central excise duty paid on excisable goods, consequent on their export, are required to be filed within one year of the date of their export, under Section 11B of the Excise Act.

As such, the rebate claim, filed by the Petitioner, was rejected by the Assistant Commissioner of Customs (AC), vide Order-in-Original dated 29th January, 2014, on the ground that it was barred by time, as it had been filed after the expiry of one year from the date of export of the goods. The appeal, preferred there against by the Petitioner, was dismissed by the Commissioner of Customs (Appeals) vide Order-in-Appeal dated 11th February, 2015.

The Petitioner challenged the aforesaid Order-in-Appeal, of the Commissioner (Appeals), by way of a Revision Application, under Section 35EE of the Excise Act, before the Revisionary Authority. In the Revision Application, the Petitioner contended that the rejection of its rebate claim, on the ground of limitation, was unsustainable, as there was no stipulation of any one year time limit, either in Rule 18 of the Central Excise Rules, 2002 or in Notification 19/04 - CE (NT) dated 6th September, 2004, issued under Rule 18 of the Central Excise Rules, whereunder the rebate claim was filed.

The Petitioner also sought to contend that his inability in filing the rebate claim within 1 year of export of the goods was because the Export Promotion (EP) copy of the Shipping Bills, which were required to be filed with the rebate claim, were not made available to it. It was contended that the rebate claim was filed as soon as the EP copy became available. The non-availability of the EP copies of the shipping bills, it was further sought to be pointed out, was owing to a failure in the computer systems in the Customs house, for which the Petitioner could not be prejudiced.

These submissions were not accepted by the Revisionary Authority, who, vide the impugned Order, dated 10.12.2018, rejected the Petitioner's rebate claim, reiterating the finding, of the authorities below, that the claim was barred by time. Reliance was placed, by the Revisionary Authority, for this purpose, on the judgment of the Supreme Court in Union of India vs. Uttam Steel Ltd. [(2015) 13 SCC 209], as well as of the Bombay High Court in Everest Flavours vs. Union of India [(2012) 282 ELT 481], and of the Madras High Court in Hyundai Motors India Ltd. vs. UOI [2014 SCC Online Mad 12157].

The learned counsel appearing for the Petitioner, has, basically, urged two grounds, in support of the writ petition. Firstly that, owing to the technical fault at the end of the Respondent, because of which the EP copies of the shipping bills could not be made available to the Petitioner in time, the Petitioner could not be made to suffer prejudice. Reliance is placed for this submission, on the judgment of the High Court of Gujarat in Cosmonaut Chemicals vs. Union of India [2009 (233) ELT 46 (Guj)], as well as of the High Court of Rajasthan in Gravita India Ltd. vs. Union of India [2016 (334) ELT 321 (Raj)].

Alternatively, it has been submitted that, the date of submission of the ARE-1 form, to the customs authorities, should be regarded as the date of filing of the rebate claim.

Issue involved:

Whether the Petitioner is entitled to rebate of Central Excise Duty in the present case where the claim has been filed after the expiry of the period of 1 year post the export of goods?

Held:

The Hon'ble Delhi High Court has passed the following order in the matter ofwrit petition no. W.P.(C) 7683/2019 dated November 27th, 2019 observing that:

• In Everest Flavours Ltd. v. Union of India [(2012) 282 ELT 481], the High Court of Bombay, clearly held that the period of 1 year, stipulated in Section 11B of the Excise Act, for preferring a claim of rebate, has necessarily to be complied with, as a mandatory requirement.

• The Delhi HC also disagreed with the views expressed by the High Court of Gujarat in Cosmonaut Chemicals vs. Union of India [2009 (233) ELT 46 (Guj)] and the High Court of Rajasthan in Gravita India Ltd. vs. Union of India [2016 (334) ELT 321 (Raj)], to the effect that, where there was a delay in obtaining the EP copy of the Shipping Bill, the period of one year, stipulated in Section 11B of the Excise Act should be reckoned from the date when the EP copy of the Shipping Bill became availableas this, in their view, amounts to rewriting of Explanation (B) to Section 11B of the Excise Act, which, is not permissible.

• The Delhi HC was also unable to subscribe to the views vehemently urged by the learned counsel for the Petitioner, that the date of submission of the ARE-1, to the Customs Officer, ought to be treated as the date of filing of the rebate claim. 'ARE-1' expands to 'Application for Removal of Excisable Goods'. The ARE-1 is, therefore, an application which accompanies the removal of the excisable goods, and its submission is necessarily anterior in point of time, to the export of the goods which is apparent from Clauses 3(a) (vii), (xii), (xiv) and 3(b) of Notification 19/2004 – CE (NT), which deal with the procedure for sealing of goods, examination thereof and presentation of rebate claim.

• Clearly, the submission of the ARE-1 is anterior to the filing of the rebate claim and the date of submission of the said application cannot, therefore, be treated as the date of filing of the rebate claim. The learned counsel was unable to draw the attention to any statutory provision, or judicial authority, enabling the date of submission of the ARE-1 application to be treated as the date of filing of the rebate claim.

• Periods of limitation, stipulated in taxing statutes, are sacrosanct. It is settled, as far back as in Cape Brandy Syndicate vs. Inland Revenue Commissioners (1921) 2 K.B. 403, thus:

'... in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.'

Conclusively the Hon'ble Delhi High Court held that they are unable to accede to either submission made by the learned counsel and there is no reason to disturb the concurrent view of all three authorities i.e. the AC, the Commissioner (Appeals) and the Revisionary Authority, that the rebate claim of the Petitioner merited rejection, as it was barred by time. Resultantly, the writ petition was dismissed with no order as to costs.

Important Provisions:

Section 11B of the Excise Act: Claim for refund of duty

(1) Any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person:

• Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) substituted by that Act;
• Provided further that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest.

Explanation - For the purposes of this section,-

(A) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;

(B) "relevant date" means,-

(a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods,-

(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or
(ii) if the goods are exported by land, the date on which such goods pass the frontier, or
(iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India;

Rule 18 of Central Excise Rules, 2002: 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 - For the purposes of this rule, 'export', with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India and includes shipment of goods as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft.