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Limitation Period U/s 11B Central Excise Act Applicable To Claims For Rebate Of Duty U/Rule 18 Central Excise Rules: Supreme Court

Aditi Rai ,
  02 December 2022       Share Bookmark

Court :
Supreme Court of India
Brief :

Citation :
CIVILL APPEAL NO.8717of 2022

CASE TITLE:
Sansera Engineering Limited Vs. Deputy Commissioner, Large Tax Payer Unit, Bengaluru

DATE OF ORDER:
29November 2022

JUDGE(S):
MR Shah, J
MM Sundresh, J

PARTIES:
Appellant- Sansera Engineering Limited
Respondent- Deputy Commissioner, Large Tax Payer Unit, Bengaluru

SUBJECT

In the present case, the Hon’ble Apex Court of the country held that the limitation period prescribed under section 11B of the Central Excise Act, 1994 is applicable to claims for rebate of duty under Rule 18 of the Central Excise Rules, 2002. The Apex Court also pressed upon the need to always interpret subordinate legislations in harmony with the main statute.

IMPORTANT LEGAL PROVISION

CENTRAL EXCISE ACT, 1994

Section 11B-prescribes one year from the relevant date as the period of limitation to apply for a refund/ rebate of duty of excise.

BRIEF FACTS OF THE CASE

  • The appellant is a manufacturer of excisable goods.
  • The appellant in the present case claimed for rebate of duty on goods exported by them in the year 2015 and 2016.
  • The Karnataka High Court had upheld the order passed by the Deputy Commissioner, Large Tax Payer Unit, Bengaluru rejecting the claim of the appellant.
  • The respondent as well as the Karnataka High Court based its decision in the ground that the claim was barred by time/limitation prescribed u/s 11B of the Central Excise Act, 1944.

ARGUMENTS RAISED BY THE APPELLANT

  • It was contended by the learned counsel for the appellant that the applicability of section 11B of the Act to Rule 18 of the 2002 Rules has not been expressly provided for in the rule.
  • As such, he argued that the claim for rebate of duty under Rule 18 is not the same as the claim for refund of duty u/s 11B

ARGUMENTS RAISED BY THE RESPONDENT

  • It was contended by the learned counsel for the respondent that section 11B expressly provides the period of limitation for filing an application for rebate as 1 year from the relevant date.
  • And Rule 18 is a subordinate legislation so it can not override the section of the main statute i.e. section 11B.

LEGAL ISSUE

  • Whether the claim for rebate of duty provided under rule 18 of the Central Excise Rules, 2020, the period of limitation prescribed u/s 11B of the Central Excise Act, 1994 shall be applicable or not?

ANALYSIS BY THE COURT

  • The Hon’ble Court referred to the applicability of section 11B (1) of the Act to any person claiming a refund of excise duty(including the rebate of duty as per Explanation (A) of the said section).
  • The Court observed that, as per the provisions contained in section 11B, such a person has to make an application for refund to the appropriate authority before the expiry if a period of one year from the relevant date.
  • Such application should be in conformity with the form and manner as may be prescribed.
  • While adjudicating upon the main legal issue in question, the Apex Court observed that Rule 18 is merely an enabling provision and as such non mention of the applicability of section 11B in Rule 18 would not make section 11B inapplicable to the said rule, which otherwise as observed herein shall be applicable in respect of the claim of rebate of duty.
  • The Court held the similar view for the non mention of applicability of section 11B in the notification dated 6.9.2004 issued in exercise of powers conferred by Rule 18.
  • The Court while relying upon the ratio of Everest Flavours Ltd. v. Union of India [(2012) 282 ELT 481] made the following observation –
  • “since statutory provision for refund in section 11B brings within its purview, a rebate of excise duty, Rule 18 of the 2002 Rules can not be read independent of requirement of limitation prescribed in section 11B.”
  • The Court further observed that it is a settled principle of law that a subordinate legislation can never override the parent statute. The Court, while commenting on the need to interpret subordinate legislation in harmony with the parent statute held that-

“ Subordinate legislation which is an aid of the parent statute has to be read in harmony with the parent statute. Subordinate legislation can not be interpreted in such a manner that the parent statute may become otiose or nugatory.”

CONCLUSION

The Apex Court, in light of the above observation, finally concluded that the limitation period of 1 year as prescribed in section 11B is applicable to Rule 18 and as such the appropriate authority was right in rejecting the claim of appellant for refund of excise duty.

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