In the present appeal filed by the assessee, it is
seeking refund of duty which was initially paid by
M/s.Bharat Petroleum Corporation Limited (hereinafter
referred to as 'BPCL'). According to the appellant, this
duty was paid by it to the BPCL on purchase of Naphtha
from BPCL. The period involved is 25.09.1996 to
16.10.1996. Under Rule 192 of the Central Excise Rules JUDGMENT 1944, Naphtha can be procured without payment of duty as
provided under Notification No. 75/84-CE dated 01.03.1984
as well as Notification No. 8/96-CE dated 23.07.1996, in
case the purchaser is in possession of CT-2 certificate
and an L6 licence issued by the Departmental authorities.
The appellant did not have this certificate at the
material time and that is why duty was paid. However, the
appellant was also simultaneously requesting the
authorities to issue CT-2 certificate to enable it to
procure Naphtha without payment of duty. This certificate
was initially refused by the Departmental authorities vide
Order-in-Original dated 08.07.1997 passed by Assistant
Commissioner of Central Excise, Sitapur Division. Against
that order, the appellant had preferred the appeal before
the Commissioner (Appeals) in which the appellant
succeeded as the said appeal was allowed by the
Commissioner (Appeals) on 30.10.1998, thereby granting
permission to the appellant to procure Naphtha without
payment of duty.
It is not in dispute that, thereafter, armed with the
said certificate the appellant has been purchasing Naphtha
without payment of duty. However, for the period from
25.09.1996 to 16.10.1996, which is the subject matter of
the present appeal, since the appellant had paid the duty
to BPCL and BPCL had paid the same, in turn, to the respondent-authorities,JUDGMENTthe appellant sought refund of the said duty. This refund application was rejected by the
Assistant Commissioner of Central Excise, Durgapur-I
Division vide Order-in-Original dated 19.01.2000 on two
grounds. The first reason given by the authority was that
since it is the manufacturer which had paid the duty to
the authorities, the appellant had no locus standi to
claim the refund. The second reason given was that the
application filed under Section 11B of the Central Excise
Act, 1944 (hereinafter referred to as 'Act') was not
preferred within six months and therefore, was time
barred.
The appellant filed the appeal before the
Commissioner of Central Excise (Appeals) challenging the
aforesaid order. This appeal was, however, dismissed on
14.08.2001. Further appeal was preferred before the
Customs, Excise and Service Tax Appellate Tribunal, New
Delhi, (hereinafter referred to as 'CESTAT'). Again
unsuccessfully, as by the impugned orders dated
20.11.2003, the appeal of the appellant has been
dismissed.
The CESTAT has not decided the issue of limitation
and authoritatively dismissed the appeal giving two other
reasons. First reason is the same as which was the basis
of the dismissal of appeal by the Commissioner (Appeals)
as well, namely, the appellant lacked locus standi to file
the refund claim. Another reason which had persuaded the JUDGMENT
CESTAT to dismiss the appeal was that the refund claim was
preferred before a wrong authority.
Insofar as dismissing the application on the ground
that the appellant did not have locus standi, we find that
view taken by the authorities below is clearly erroneous
in law. Section 11B of the Act which contains the
provision for making a claim for refund of duty uses the
expression “any person” who is eligible to claim refund of
the duty. The relevant portion of Section 11B reads as
under:
“Section 11B. Claim for refund of duty. - (1) Any
person claiming refund of any duty of excise may
make an application for refund of such duty to the
Assistant Commissioner of Central Excise before the
expiry 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:
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 six
months shall not apply where any duty has been paid
under protest.”
The said provision is made for obvious reasons.
Though the duty under Section 11B of the Act is payable by
the manufacturer, a manufacturer would generally pass on
the burden of the excise duty to the buyer or it may be
some other person. It is for this reason, a person who is
ultimately aggrieved with the payment of the said duty and
challenges the order successfully can seek the refund.
This becomes apparent from the reading of clause (e) to
Explanation (B) appended to the aforesaid provision which
is as under:
“Explanation. - For the purposes of this section, -
(B) “relevant date” means, -
(e) in the case of a person, other than the
manufacturer, the date of purchase of the goods by
such person;
Explanation (B) defines “relevant date”. Though this
date has reference to the calculation of limitation period
for the purposes of seeking refund of the duty under the
aforesaid provision. However, clause (e) while stating
the “relevant date” clarifies that in case of a person,
other than the manufacturer, the date of purchase of goods
by other person would be the relevant date. This itself JUDGMENT
indicates that the person can be other than the
manufacturer and Explanation (B) caters to such other
person. It is not even necessary to embark on detailed
discussion on this aspect inasmuch as we note that the
Constitution Bench of this Court in 'Mafatlal Industries
Ltd. and others v. Union of India and others' [1997(5) SCC
536] has already settled this aspect in the following
words: -
“(xii) Section 11-B does provide for the purchaser
making the claim for refund provided he is able to
establish that he has not passed on the burden to
another person. It, therefore, cannot be said that
Section 11-B is a device to retain the illegally
collected taxes by the State. This is equally true of
Section 27 of the Customs Act, 1962.”
We are, therefore, of the opinion that the appellant
who had paid the excise duty to the manufacturer, viz.,
M/s Indian Oil Corporation Ltd. (hereinafter referred to
as 'IOCL') and BPCL in the instant case, had the necessary
locus standi to file the application claiming the refund
of the duty.
The second reason given by the CESTAT, as mentioned
above, is that the appellant had preferred this
application before a wrong authority. Here we find that
the appellant had filed the refund claim before the
Central Excise Authorities at Durgapur. The appellant had
purchased the material from IOCL which is having its
refinery at Durgapur. The show cause notice was also JUDGMENT
issued by the Superintendent of Central Excise at
Durgapur. It appears that the CESTAT is influenced by the
reason that the depot is located at Haldia and on that
ground, it has come to the conclusion that the authorities
at Durgapur had no jurisdiction. The aforesaid reason
given by the CESTAT is factually incorrect. We find that
the purchases were from depot at Rajbandh under the IOCL
refinery at Durgapur and therefore, the Central Excise
authorities at Durgapur had the requisite jurisdiction
over IOCL Depot located at Rajbandh, as it comes under
Durgapur Commissionerate.
Our aforesaid discussion leads to the conclusion that
the two reasons given by the CESTAT in dismissing the
appeal of the assessee are not correct. As noted above,
insofar as the question of limitation is concerned, the
CESTAT did not give final pronouncement thereupon. In
normal course, we could have remitted the case back to the
CESTAT for decision on that issue. However, we have
necessary factual details before us and as the matter is
quite old, we deem it apposite to decide this issue of
limitation in these proceedings itself rather than
remanding the case back to the CESTAT.
It is not in dispute that in terms of Section 11B,
the application for refund is to be made within six
months. The assessee is claiming refund for the period JUDGMENT from 25.09.1996 to 16.10.1996. An application for refund
was made on 30.04.1999 which was beyond six months period.
The appellant however, is relying upon the second proviso
to Section 11B which stipulates that the limitation of six
months would not apply where any duty has been paid under
the protest. The question is as to whether the protest
was lodged by the appellant. It is sought to be argued by
the learned counsel for the appellant that the appellant
had filed the appeal against the Order-in-Original passed
by the Assistant Commissioner denying CT-2 certificate
which should be treated as protest. It is argued that the
protest as stipulated under Rule 233B of the Rules refers
only to a manufacturer and since the appellant is not the
manufacturer for whom no mode of protest is stipulated,
even filing of the appeal should be treated as protest.
That may be so and to that extent, we agree with
Mr.Lakshmikumaran, learned counsel appearing for the
appellant. He is right in his submission that protest as
per Rule 233B refers only to a manufacturer and therefore,
a person like the appellant, who was only a purchaser
could not have made any protest in terms of Rule 233B.
Therefore, if protest is lodged in one form or the other
that should be construed as satisfying the condition
stipulated in second proviso to Section 11B.
Having said that, in the present case, we find that the appeal was filed only in September, 1997 or
thereafter, though exact date of filing the appeal is not
disclosed. Even if this appeal is treated as a form of
protest that was much beyond six months period from the
date of purchase that is 25.09.1996 to 16.10.1996.
Therefore, the so-called protest would not come to the aid
of the appellant. We therefore, are of the opinion that
application for refund was time barred and on this ground
alone, the appellant will not be entitled to refund of the
amount.
The appeal of the appellant therefore, stands
dismissed, though, on a different ground than the reasons
stated in the order of the CESTAT. No costs.
[ A.K. SIKRI ]
New Delhi; March 30, 2015.