Full Judgment Text
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CASE NO.:
Appeal (civil) 2416 of 2000
PETITIONER:
COMMISSIONER OF CENTRAL EXCISE CHENNAI
RESPONDENT:
T.V.S. SUZUKI LTD. HOSUR
DATE OF JUDGMENT: 06/08/2003
BENCH:
S. RAJENDRA BABU & B.N. SRIKRISHNA & G P. MATHUR
JUDGMENT:
JUDGMENT
2003 Supp(2) SCR 281
The Judgment of the Court was delivered by SRIKRISHNA, J.
Civil Appeal No. 2416 of 2000
On 5.7.1996 the respondent filed an application for refund claim of Rs.
1,48,58,630.94 after the final assessment was completed. The Assistant
Commissioner of Central Excise issued a show cause notice dated 9.7 1996 as
to why the claim should not be rejected for non-compliance with Section 1
IB of the Central Excise Act, 1944. After considering the reply filed by
the respondent the Assistant Commissioner of Central Excise by his order
17th July, 1996 rejected the refund claim of the respondent on the ground
that the refund claim had been made beyond the period of limitation and
that respondent was unable to show that the amount of excise duty for which
the refund was claimed, had not been passed on to any other person. On
appeal, the Commissioner of Central Excise, in his order dated 19th June,
1998 observed that on the date on which the Assistant Commissioner of
Central Excise made the above order (i.e 17.7.1996), the assessment was
only provisional and that the assessment was finalised only on 25.7.1996.
In the circumstances, the Commissioner was of the view that the refund
claim was not time barred. Following the law laid down by this Court in
Mafatlal Industries Ltd. & Ors. V. Union of India & Ors., [1997] 5 SCC 536,
he held that the concept of unjust enrichment would not be attracted on
finalisation of provisional assessments. He consequently allowed the refund
claim. On appeal the Customs, Excise and Gold (Control) Appellate Tribunal
(hereinafter referred to as ’CEGAT’) agreed with the view of the
Commissioner and dismissed the appeal. Hence, the department is in appeal
before us.
In Mafatlal Industries Ltd (supra) a Bench of nine learned Judges of this
Court held that refund claims consequent upon the adjustment under sub-rule
(5) of Rule 9B would not be governed by the restrictions of Section 11A or
Section 11B, as the case may be. This Court observed (vide paragraph 104)
as under:
"Rule 9-B provides for provisional assessment in situations specified in
clauses (a), (b) and (c) of sub-rule (1). The goods provisionally assessed
under sub-rule (1) may be cleared for home consumption or export in the
same manner as the goods which are finally assessed. Sub-rule (5) provides
that " when the duty leviable on the goods is assessed finally in
accordance with the provisions of these Rules, the duty provisionally
assessed shall be adjusted against the duty finally assessed, and if the
duty provisionally assessed falls short of or is in excess of the duty
finally assessed, the assessee shall pay the deficiency or be entitled to a
refund, as the case may be". Any recoveries or refunds consequent upon the
adjustment under sub-rule (5) of Rule 9-B will not be governed by Section
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11-A or Section 11-B, as the case may be."
In order to get over the situation arising under Mafatlal Industries Ltd.
(Supra) vide notification No. 45/99-CE (NT) dated 25.6.1999, an amendment
was made in sub-rule (5) of Rule 9B by adding a proviso thereto. The effect
of the proviso is that, even after finalisation of the provisional
assessment under Rule 9B (5), if it is found that an assessee is entitled
to refund, such refund shall not be made to him except in accordance with
the procedure established under sub-section (2) of Section 11B of the Act.
There is no dispute that the refund claim in this case was made much prior
to the addition of the proviso in sub-rule (5) of Rule 9B. On the date on
which the refund claim was made, the law applicable was the law as declared
by this Court in Mafatlal Industries Ltd. (supra) which we have reproduced
above. However, it is contended by the learned counsel Shri Verma for the
department, that the claim of refund would be governed by the proviso
introduced in sub-rule (5) of Rule 9B, and that as a consequence, the
restrictions in Section 11A and Section 11B with regard to the procedure
for refund would apply to the case of the respondent. The same question
came up for consideration of this Court in Sinkhai Synthetics & Chemicals
Pvt. Ltd. v. C.C.E., Aurangabad, (2002) 143 E.L.T. 17 SC. This Court took
the view that the case would be governed by the rule laid down in Mafatlal
Industries Ltd. (supra). This view has been reiterated in a subsequent
judgment of this Court in C.A. No. 2533 of 2001. (Commissioner of Central
Excise, Meerut v. M/s. Star Paper Mills Limited, [2003] 7 SCC 27) upholding
the view of the tribunal that the refund claim of the asseessee before the
court was justified.
Shri Verma fairly concedes that the proviso introduced in sub-rule (5) of
Rule 9B cannot be said to be retrospective in operation. He, however,
contends that on the date on which the proviso was brought into force, i.e.
25.6.1999, the refund claim was still pending with the departmental
authorities and, therefore, it had to be adjudicated in accordance with the
law as it became enforceable from 25.6.1999. In our view, this contention
cannot be accepted. Merely because the departmental authorities took a long
time to process the application for refund, the right of the asseessee does
not get defeated by the subsequent amendment made in sub-rule (5) of Rule
9B. The Commissioner of Central Excise and the CEGAT were, therefore,
justified in holding that the claim for refund made by the respondent had
to be decided according to the law laid down by this Court in Mafatlal
Industries Ltd. (supra) and would not be governed by the proviso to sub-
rule (5) of Rule 9B.
In the result, we find no merit in appeal. The appeal is accordingly
dismissed. However, there shall be no order as to costs
Civil Appeal Nos. 2891/2001, 8380/2001 and 610-611/2002
In all these appeals the question which arises for our consideration is
identical. The refund claims were made pursuant to the finalisation of
provisional assessment orders and prior to 25.6.1999, i.e. the date on
which the proviso to sub-rule (5) of Rule. 9B came into force. In our view,
therefore, all these cases would be governed by the rule in Mafatlal
Industries Limited (supra) namely that the restrictions in Section 11A and
Section 11B would not apply to refund claims consequent upon finalisation
of provisional assessment orders.
Hence, these appeals are dismissed. No. costs