Per. Rakesh Kumar :-
The facts leading to this appeal are, in brief, as under.
1.1 The Appellant, a private limited company, are engaged in manufacture and sale of oil field equipments and spares thereof chargeable to Central Excise Duty under sub-heading (SH) 8479.00 of the Central Excise Tariff. Notification No. 5/99-CE dated 28/2/99 (S. No. 275 of the table to the notification) prescribes a concessional rate of excise duty on goods falling under any chapter but specified in list 8 to the notification, when supplied to Oil and Natural Gas Commission (ONGC) or Oil India Ltd. (OIL), subject to condition that if the use of the goods is elsewhere than in the factory of manufacture, the procedure set out in Chapter X of the Central Excise Rules, 1944 (CER, 1944) is followed. The ONGC, Mumbai wanted to procure BOP Test unit and chart recorder alongwith accessories from the Appellant and for this purpose, as per the provisions of Chapter X of CER, 1944, they obtained the required permission from the jurisdictional Commissioner and also a CT-2 certificate from Superintendent, Uran Range, Panvel Division, Mumbai V Commissionerate. The CT-2 Certificate, however, mentioned the item to be procured as BOP accumulator unit alongwith chart recorder and accessories. Though against this CT-2 certificate, the Appellant supplied BOP Test unit and chart recorder alongwith accessories to ONGC at concessional rate of duty, the jurisdictional range Superintendent of the Appellant at Dehradun, taking the view that BOP Accumulator Unit mentioned in the CT-2 appears to be different from the goods supplied BOP Test Unit, wrote vide letter dated 9/4/99 to Superintendent Central Excise, Uran Range, Panvel for clarification and at the same time directed the Appellant to pay the differential duty amounting to Rs. 3,72,762/- which was paid by them on 9/4/99. The appellant vide letter dated 18/4/99 reported the payment of duty to Range Superintendent, Range-II, Dehradun. On the Appellant’s request, the CT-2 certificate was returned by the Range office at Dehradun to them, which, in turn, was returned by the Appellant to ONGC. On 16/11/99 the Range Superintendent, Uran informed ONGC, Mumbai that BOP Test Unit is the same as BOP accumulator unit, that the CT-2 is, therefore, valid and duty exemption under Notification No. 5/99-CE (S. No. 275) is available. ONGC, Mumbai accordingly returned the CT-2 to the Appellant informing them about Range Superintendent, Uran, Panvel’s clarification dated 16/11/99 and asking them to file refund claim with the Central excise authorities at Dehradun. The CT-2 certificate was accordingly returned by the Appellant to the Range Superintendent and on 10/2/2000, a refund application was filed by the Appellant with the jurisdictional Assistant Commissioner for refund of the duty of Rs. 3,72,762/- paid by them. However, a show cause notice dated 22/2/2000 was issued to the appellant proposing rejection of the refund claim on the grounds that
(i) Range Superintendent Uran, Panvel Division has not certified that the BOP test unit and BOP accumulator unit are the same ; and
(ii) original duty paying documents have not been enclosed.
Subsequently, an addendum dated 10/3/2000 was added to the show cause notice adding one more ground for rejection of refund claim that the same is time barred. The Deputy Commissioner, vide order-in-original dated 5/4/2000 rejected the refund on the ground of time bar.
1.2 On appeal to CCE (Appeals), the Deputy Commissioner’s order was upheld vide order-in-appeal No. 341/CE/MRT-1/03 dated 19/12/03. On appeal to CESTAT, the Tribunal, vide find order No. 554/2007/EX dated 3/10/07 dismissed the appeal.
1.3 The appellant filed an appeal to Hon’ble High Court of Uttarakhand at Nainital and Hon’ble High Court vide order dated 4/8/09 set aside the Tribunal’s order dated 3/10/07 as the same had been passed ex-parte and remanded the matter to the Tribunal for de-novo decision after granting opportunity of hearing to the Appellant. Accordingly, this matter has been taken up for de-novo decision.
2. Heard both the sides.
2.1 Shri P.R. Mullic, Advocate, the learned counsel for the Appellant made the following submissions.
(1) The clearance by the Appellant to ONGC against CT-2 certificate have to be treated as provisional under Rule 9B as, as per the requirement of Chapter X of CER, 1944, these clearances have to be made against a B-8 bond even though in this case, the buyer being a Public Sector Undertaking, the requirement of Bond had been waived in terms of the provisions of Rule 221A. In view of this, the limitation period under Section 11B is not applicable from the date of payment of duty. The refund claim was, therefore, within time.
(2) That the payment of duty was provisional is clear from the series of correspondence between the Appellant, the Range Superintendent Dehradun Range-II, the customer ONGC, Mumbai and Superintendent Uran Range, Panvel Division. Though the duty was initially paid on 9/4/99 on the instructions of Range Superintendent at Dehradun, subsequently the Department itself clarified on 16/11/99 that the goods supplied are covered by the CT-2 and the duty exemption under Notification No. 5/99-CE (Sl. No. 275) is available. The refund claim could be filed only after 16/11/99.
(3) The directions dated 9/4/99 of the Range Superintendent, Range - II Dehradun were under Rule 173I and once he was satisfied, he should have suo-moto refunded the duty under this rule.
(4) Addendum to show cause notice is bad in law and was issued after conclusion of the proceedings of adjudication. In this regard, reliance is placed on Tribunal’s judgment in case of Capricons Pvt. Ltd. vs. CCE reported in 1999 (107) E.L.T. 735.
(5) Since the cause of action for refund had arisen on 16/11/99 and the refund claim had been filed on 10/2/2000, i.e. within the limitation period prescribed under Section 11B from this date, the same has to be treated as within time.
2.2 Shri R.K. Verma, the learned DR, made the following submissions -
(1) Addendum to show cause notice adding the ground of time bar had been issued before the adjudication of the show cause notice. In view of Tribunal’s judgment in case of Wipro Information Technology vs. CCE, Bangalore reported in 1999 (107) E.L.T. 467, the addendum, at the most, can be treated as fresh show cause notice, for which there is no time limit.
(2) When the Appellant were asked by the Range Superintendent to pay the differential duty on the goods cleared under CT-2, the Appellant could have either requested for provisional assessment under Rule 9B, pending clarification from Range Superintendent, Uran Range or could have paid the duty under protest in which case, the limitation period under Section 11B would not have been applicable. But the Appellant did none of these things. Hence the refund claim having been filed beyond the limitation period from the date of payment of duty i.e. 9/4/99, has been rightly rejected as time barred. In this regard reliance is placed on Tribunal’s judgment in case of Steel Authority of India Ltd. vs. CCE, Coimbatore reported in 2004 (177) E.L.T. - 1128 wherein the Tribunal held that the rule of equity embodied in the legal maxim lex non cogit ad impossibilia cannot be invoked to get over a statutory limitation by a party who had alternative means in law to get over such limitation, but neglected to take recourse to such means.
(3) The clearances against CT-2 cannot be treated as clearances under provisional assessment. In this regard, reliance is placed on Hon’ble Supreme Court’s judgment in case of Metal Forgings vs. UOI reported in 2002 (146) E.L.T. 241 S.C..
(4) The ratio of Hon’ble Supreme Court’s judgment in case of CCE vs. Rallis India Ltd. reported in 2002 (142) E.L.T. - 19 (S.C.) was cited. In this case, the Respondent claimed the benefit of Notification No. 270/77-CE dated 20/8/77 which was applicable to an assessee whose production during the financial year was less than 360 MTs. The Respondent initially paid duty on clearance of 150 MTs of Sodium Hydrosulphite when at the end of the financial year he learnt that the clearances were less than 360 MT. Hon’ble Supreme Court held that even in such a situation, the limitation period would be computable from the date of payment of duty as neither the duty had been paid provisionally nor the payment was under protest.
(5) Since the appellant neither took recourse to provisional assessment nor paid the duty under protest, the period of limitation has to be counted from the date of payment of duty and hence the refund claim is time barred.
3. We have carefully considered the submissions from both the sides and perused the records. The points of dispute in this case are -
(1) Whether the addendum dated 10/3/2000 to the show cause notice dated 22/2/2000 proposing the rejection of the refund claim is valid; and
(2) Whether in view of the facts given in para 1.1 of this order, the refund claim is time barred.
Our findings on these points are as under.
4. Whether the addendum dated 10/3/2000 to the show cause notice dated 22/2/2000 proposing the rejection of the refund claim is valid.
4.1 The show cause notice proposing rejection of the refund claim had been issued on 22/2/2000 on the grounds that the original duty paying documents have not been enclosed and the Range Superintendent Uran Division Panvel had not certified that the BOP test unit and BOP Accumulator unit are the same. The addendum to the show cause notice dated 22/2/2000 was issued on 10/3/2000 adding one more ground of time bar for rejection of refund claim. Since the addendum dated 10/3/2000 had been issued prior to the adjudication of this matter and was based on existing facts and not based on any new facts or new documents, we do not find anything objectionable in issue of this addendum. Moreover the original show cause notice dated 22/2/2000 and addendum dated 10/3/2000 amending the show cause notice dated 22/2/2000 are only for rejection of a refund claim and, therefore, even if the amended show cause notice is treated as a fresh show cause notice, there is no question of time bar.
5. Whether in view of the facts given in para 1.1 of this order, the refund claim of the Appellant is time barred and whether the impugned order upholding the rejection of refund claim on the ground of time bar is correct.
5.1 The Assistant Commissioner, while holding that the Appellant is eligible for concessional rate of duty under notification No. 5/99-CE (S. No. 275) in respect of BOP accumulator unit, has rejected the refund claim on the ground of time bar as
(a) While the duty was paid on 9/4/99, the refund claim was filed on 10/2/2000 i.e. after the expiry of limitation period of 6 months from the relevant date ; and
(b) in this case the Appellant had neither paid the duty under protest nor had gone in for provisional assessment.
The CCE (Appeals) has upheld the above order of the Assistant Commissioner. According to the Appellant, 16/11/99 is to be treated as the relevant date for counting limitation period, and on this basis, the refund claim filed on 10/2/2000 is within time.
5.2 The provisions of Section 11B regarding limitation period and the relevant date for counting limitation period during the period of dispute were as under -
Section 11B. Claim for refund of duty (1) Any person claiming refund of duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central excise or Deputy Commissioner of Central Excise, before the expire of six months 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 in relation to which such refund is claimed, was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person.
X X X
Provided further that the limitation of six months shall not apply when any duty has been paid under protest.
X X X
(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 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 to a place outside India ;
(b) in case of goods returned for being remade, refund, reconditioned, or subjected to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid ;
(c) in case of goods to which bandroles are required to be affixed, if removed for homes consumption, but not so required when exported outside India, if returned to a factory after having been removed from such factory for export out of India, the date of entry into the factory,
(d) in a case when a manufacture is required to pay a sum, for a certain period, on the basis of the rate fixed by the Central Government in the official gazette in full discharge of his liability for duty leviable on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period, but before the expiry of that period, such rate is reduced, the date of such reduction ;
(e) in case of a person other than the manufacturer, the date of purchase of goods by such person ;
(ea) in the case of goods which are exempt from payment of duty by a special order issued under Section 5A (2), the date of issue of such order ;
(eb) in case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof ; and
(f) in any other case, the date of payment of duty.
5.2.1 For payment of duty under protest, Rule 233B of the Central Excise Rules, 1944 prescribed a procedure which involved endorsing the duty paying documents with remarks duty paid under protest and also making a representation to the proper officer. Rule 233B (5) provided that in cases where the remedy of an appeal or revision is not available to the assessee against an order or decision which necessitated him to deposit the duty under protest, he may, within three months of the date of delivery of letter of protest, give a detailed representation to the Assistant/Deputy Commissioner. Rule 233B (8) provided that if the provisions of sub-rule (1) to (7) of Rule 233B have not been followed, the duty will be deemed to have been paid without protest. As per the judgment of Hon’ble Supreme Court, in case of Dena Snuff (P) Ltd. vs. CCE, Chandigarh reported in 2003 (157) E.L.T. 500 S.C., where the duty has been paid under protest and the decision has been taken on the protest, the period of limitation would start to run from the date of final decision on the protest in the assessee’s own case. (para 5 of the judgment).
5.3 Though during the period of dispute, there was no provision as to what would be the relevant date when the refund claim arises on account of an order, judgment, decree or direction of an appellate authority, Appellate Tribunal or any court and specific provisions in this regard were made by introducing a clause (ec) in Explanation (B) to Section 11B, w.e.f. 11/5/07 by which in case of such refund claims, arising out of Tribunal’s/Appellate authority’s order, Court’s order, decrees or direction etc., the date of such appellate order, judgment, decree or order of the Appellate authority, Tribunal or court was made the relevant date, even in respect of the period prior to 11/5/2007, Hon’ble Supreme Court, in case of Mafatlal Industries Ltd. vs. UOI reported in 1997 (89) E.L.T. 247 (S.C.) held that in case of refund claim referred to in Section 11B (3) i.e. the refund claim arising due to any judgment, decree, order or direction of the Appellate Tribunal or any Court it must be deemed that the duty in such cases had been paid under protest within the meaning of the second proviso to Section 11B (1). In this regard, the relevant portion of para 107 of the judgment is reproduced below:
It is, therefore, clear that in respect of such decrees and order, the procedure and conditions prescribed in Section 11B will have to be complied with. However, under the scheme of the amended Excise Act, the application for refund, which is a pre-requisition for invoking Section 11B (2), is required to be made within six months from the payment of duty. It is obvious that this requirement cannot be complied with in respect of pending decrees and orders. But, it must at the same time be realised that in such a case, the assessee was protesting against the recovery of the excise duty from him for which he had even initiated legal proceedings. It would, therefore, be in order to assume that he had paid the duty even though he was protesting its recovery. To ensure that such orders and decrees are not frustrated, it must be deemed that the duties of excise in such cases were paid under protest within the meaning of the second proviso to clause (1) of Section 11B. This would enable the assessee in such cases to file fresh applications under Section 11B (2), thereby complying with the scheme of the amended Excise Act.”
5.4 Thus during the period of dispute, for the duty payment to be considered as under protest within the meaning of 2nd proviso to Section 11B (1), either the duty payment should have been made under protest by following the procedure prescribed under Rule 233B or the order/direction, in pursuance of which duty had been paid should have been challenged before Appellate authority/Tribunal or Court and refund claim should have arisen on account of the order, decree or direction of such Appellate authority, Tribunal or Court.
5.5 In the present case, neither the duty had been paid under protest, which is clear from the duty paying document as well as from the letter dated 18/19th April 1999 of the Appellant to the Superintendent, Range II, Dehradun, confirming the payment of duty as per his direction, nor the order dated 9/4/99 of the Superintendent directing the Appellant to pay the duty forthwith and in pursuance of which the duty was paid on 9/4/99, was challenged before any higher authority, appellate authority or court. The refund claim was filed when the Range Superintendent Uran, Panvel Division, in response to Range Superintendent, Dehradun’s letter dated 9/4/99 clarified that the BOP Accumulator Unit is same as BOP Test unit and is eligible for exemption. Therefore we hold that in this case, the duty payment cannot be said to have been made under protest.
5.6 It has been pleaded by the Appellant that since the goods had been cleared against CT-2 by following the Chapter X procedure, the Assessment of duty for them must be treated as provisional assessment. We do not agree with this plea as for an assessment to be recognised as provisional assessment under Rule 9B of CER, 1944, these must be an order passed by the Assistant/Deputy Commissioner ordering provisional assessment in response to an application made by the Assessee and in this case, neither there was any such request by the Assessee, nor any order ordering provisional assessment was passed by the Assistant Commissioner. Just because in case of clearances at nil or concessional rate having been made by an assessee against a CT-2 certificate produced by the customer and the customer has executed a bond, the assessment of duty at the assessee’s end does not become provisional.
5.7 In this case, when the Range Superintendent, Dehradun directed the Appellant on 9/4/99 to pay the differential duty on the goods cleared at concessional rate of duty under notification No. 5/99-CE (S. No. 275) against a CT-2 certificate, the appellant should have either requested for provisional assessment or should have paid the duty under protest and in that case, the limitation period would have been counted from the date of finalisation of provisional assessment or date of decision of protest in their favour. But they did not do any such things. Since this is neither a case of provisional assessment or a case of payment of duty under protest/deemed protest, the relevant date for counting limitation period for filing refund application would be the date of payment of duty and since while the date of payment of duty is 9/4/99 and the refund claim was filed on 10/2/2000, the same is time barred.
5.7.1 We are supported in the above view by the judgment of Hon ble Supreme Court in case of CCE vs. Rallis India Ltd. reported in 2002 (142) E.L.T. 19 (S.C.) wherein the Hon’ble Supreme Court has held that even when the respondent availing of SSI exemption under notification No. 270/77-CE dated 20/8/77 was not in a position to know about his eligibility for the exemption notification before the end of the financial year and could file the refund claim only after the end of the financial year, in absence of duty having been paid provisionally or under protest, the limitation was computable from the date of payment of duty.
5.7.2 In case of Steel Authority of India Ltd. vs. CCE, Coimbatore (supra), the appellant had supplied 2640 MTs of stainless steel coin blanks from their Salem plant to Government of India, Department of economic affairs, during period from 1/1/94 to 12/10/94 on payment of duty. On 21/9/94, an ad-hoc exemption order was issued by the Government under Section 5A (2) of the Central Excise Act, 1944 and on 17/11/94, SAIL filed a refund claim for refund of duty paid during 1/1/94 12/10/94 period. A part of the refund claim was rejected by the Assistant Commissioner as time barred. The Tribunal in this case, held that since clause (ea) of Explanation B to Section 11B was not there during the period of dispute, and this clause could not be given retrospective effect and since the duty had neither been paid provisionally nor under protest, the relevant date would be the date of payment of duty, not the date of ad-hoc exemption order. The Tribunal in this case also observed that the rule of equity embodied in legal maxim lex non cogit ad impossibilia cannot be invoked to get over a statutory period by a party who had alternative means in law to get over a such limitation but neglected to take such means and that where the assessee could get over the bar of limitation under Section 11B of Central Excise Act, 1944 by making duty payment either under protest or under provisional assessment, but having failed to do so, they cannot claim equity.
5.7.3 Honble Supreme Court in case of Suraj-uh-Haq Khan and others vs. Sunni Central Board of Waqf reported in AIR 1959 SC 198 has held as under -
It is true that rules of limitation are to some extent arbitrary and may frequently lead to hardship; but there can be no doubt that in construing the provisions of limitation, equitable considerations are immaterial and irrelevant and in applying them, effect must be given to the strict grammatical meaning of the words used by them.
The above principle was followed by the Hon’ble Supreme Court in case of Collector vs. Diab Co. Operative Sugar Mills reported in 1988 (37) E.L.T. 478 (S.C.) wherein it was held that -
“.. in making claims for refund before the departmental authority, an assessee is bound within four corner of the statute and the period of limitation prescribed in the Central Excise Act and the rules framed thereunder must be adhered to. The authorities functioning the Act are bound by the provisions of the Act. If the proceedings are taken under the Act, the provisions of limitation prescribed in the Act will prevail.
6. While Section 11B of Central Excise Act, 1944, prescribes a limitation period for filing refund claim, which is to be counted from relevant date as defined in Explanation B to this Section, the 2nd proviso to Section 11B (1) also provides, for the cases like the one with which we are concerned, a way to circumvent the limitation period by payment of duty under protest and if in a situation like the one in this case, an assessee while paying duty in pursuance of written or verbal directions of a central excise officers does not pay the duty under protest, or does not go in for provisional assessment under Rule 9B of CER, 1944 (in which case the relevant date would be the date of finalisation of provisional assessment), in the event of the duty paid by him becoming refundable, the relevant date for counting the limitation period would be the date of payment of duty. Since in this case, as discussed above, neither the duty payment was under protest, nor under provisional assessment under Rule 9B of CER, 1944, the relevant date would be the date of payment of duty and, therefore, the refund claim has been correctly rejected as time barred.
7. In view of the above discussion, we do not find any infirmity in the impugned order. The appeal is, therefore, dismissed.