Full Judgment Text
NONREPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). 807 OF 2006
WESTERN COALFIELDS LTD. ……Appellant(s)
VERSUS
COMMISSIONER OF CENTRAL EXCISE
TRICHY/MADURAI .….Respondent(s)
WITH
CIVIL APPEAL NO(s). 7625 OF 2005
CIVIL APPEAL NO(s). 32173218 OF 2010
CIVIL APPEAL NO(s). 84398440 OF 2011
CIVIL APPEAL NO(s). 96939694 OF 2011
CIVIL APPEAL NO(s). 4992 OF 2012
CIVIL APPEAL NO(s). 4826 OF 2012
J U D G M E N T
Rastogi, J.
1. The present batch of appeals are directed against the
Signature Not Verified
Digitally signed by
NEETU KHAJURIA
Date: 2019.02.20
17:50:24 IST
Reason:
judgment and order passed by the Customs, Excise and Service
Tax Appellate Tribunal, at South Zonal Bench, Chennai
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(hereinafter being referred to as “Tribunal”) rejecting the claim of
the appellant (buyer) for refund of the claim of the central excise
duty under Section 11B of the Central Excise Act,
1944(hereinafter being referred to as “the Act”) which was paid
under protest by the manufacturer(M/s. Fenner (India) Ltd.).
2. The short point for consideration in the present batch of
appeals is whether the period of limitation of six months shall
apply where the refund of central excise duty has been claimed
by the buyer and paid by the manufacturer(M/s. Fenner (India)
Ltd.) under protest.
3. With the consent of the parties, we are dealing with the
facts of Civil Appeal No. 7625 of 2005 as all other are analogous
on facts and law.
4. The appellant is a Public Sector Undertaking engaged in
coal mining. The price of coal is fixed by the Coal Ministry and
the appellants sell the goods on the price fixed by the Ministry
and no central excise duty is payable on coal. M/s. Fenner
(India) Ltd.(manufacturer) cleared their finished goods viz.
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feneplsat PVC impregnated conveyor beltings classifying the same
under subheading 3920.12 on the Central Excise Tariff Act,
1985 as suggested by the department and paid the duty under
protest. The dispute with regard to classification of feneplast
PVC impregnated conveyor beltings came to this Court and
th
finally decided vide judgment dated 28 March, 1995( M/s.
Fenner (India) Ltd. Vs. Collector of Central Excise, Madurai
reported in 1995 (Suppl.) 2 SCC 567) holding that the conveyor
beltings would be classifiable under subheading 3922.90 for the
period from December 1986 to February 1987 and under sub
th
heading no. 3926.90 for the period from 10 February 1987 to
June, 1987 and also for the later period. Indisputedly, M/s.
Fenner (India) Ltd. pending classification deposited central excise
duty under protest and had never applied for its refund after the
classification dispute was finally decided by this Court of which a
reference has been made.
5. The appellant herein is the buyer of conveyor beltings from
M/s. Fenner (India) Ltd. filed application for claim of refund on
th th th
20 December, 1996 for the period 20 July 1988 to 15
January 1994 on the premise that the payment was made
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towards central excise duty by the manufacturer(M/s.
Fenner(India) Pvt. Limited, Madurai) under protest due to
pending classification of PVC impregnated conveyor beltings
dispute in the Court of law and after issue of classification has
been settled by this Court in favour of the manufacturer M/s.
th
Fenner (India) Ltd. by judgment dated 28 March, 1995, the
central excise duty collected should be refunded by the excise
department and there is no bar in claiming of refund in terms of
the amendment made under Section 11B of the Act and
limitation of six months shall not apply where duty has been paid
under protest.
6. In furtherance of the application, show cause notice dated
th
17 February, 1997 was served by the Department holding that
since the appellant did not pay any duty and, therefore, is
precluded from making any application under Section 11B of the
Act and after affording opportunity of hearing order in original
th
came to be passed by the Authority dated 4 August, 1997
rejecting the refund application filed by the appellant on the
ground of limitation and also on unjust enrichment. The appeal
th
preferred by the appellant against order dated 4 August, 1997
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before the Appellate Authority, Chennai came to be rejected on
th
the ground of limitation under Order dated 18 January, 1999
and confirmed by the Appellate Tribunal under order impugned
th
dated 8 August, 2005 placing reliance on the judgment of this
Court in
Commissioner of Central Excise, MumbaiII Vs.
Allied Photographics India Ltd. 2004(4) SCC 34. The subject
matter of challenge is in appeal before us.
7. The main thrust of submission of learned counsel for the
appellant is that since the manufacturer of the conveyor beltings
had paid duty under protest, the restriction of limitation of six
nd
months under 2 proviso to Section 11B(1) may not apply to the
refund claim filed by the appellant buyer and further submitted
that the only relevant question would be as to whether excise
duty for which refund claim is made has been paid under protest
or not and if the answer is in affirmative, the protest made by the
manufacturer at the time of payment of duty has to be taken into
consideration even to determine whether the buyer has filed the
refund claim within time.
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8. Learned counsel submits that when the duty paid by the
manufacturer is permitted to be claimed by the buyer who
ultimately bears the burden, protest made by such manufacturer
at the time of paying the central excise duty for which the buyer
can also apply for the refund and bar of limitation of six months
may not apply to the buyer claiming refund of excise duty paid by
the manufacturer under protest.
9. Per contra, learned counsel for the respondent while
supporting the order of the Tribunal submits that although the
buyer can move an application for refund of central excise duty
under the provision of Section 11B of the Act provided the duty of
excise borne by the buyer had not passed on the incidence of
such duty to any other person and application is submitted for
seeking refund claim within a period of six months from the date
of purchase of the goods which indeed in the instant appeal is
beyond the period of limitation and have been rightly rejected by
the Tribunal placing reliance on the judgment of this Court in
Commissioner of Central Excise, MumbaiII Vs. Allied
Photographics India Ltd’s case (supra) and further submitted
that claim for refund under Section 11B, the right of the
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manufacturer and the right of the buyer are separate and distinct
and indisputedly, the application was filed by the
appellant(buyer) much after the period of six months from the
nd
date of purchase of goods which was time barred in terms of 2
proviso to Section 11B(1) of the Act and rightly rejected by the
competent authority and affirmed by the Tribunal and needs no
further interference.
10. Before we proceed to examine the question, it would be
apposite to take note of relevant provision of Section 11B of the
Act applicable at the relevant time(preamended) which 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 or Deputy
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 subsection as amended by the said Act and the
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same shall be dealt with in accordance with the
provisions of subsection (2) substituted by that Act:]
[Provided further that] the limitation of [six months]
shall not apply where any duty has been paid under
protest.
(2) If, on receipt of any such application, the [Assistant
Commissioner of Central Excise or Deputy
Commissioner of Central Excise] is satisfied that the
whole or any part of the duty of excise paid by the
applicant is refundable, he may make an order
accordingly and the amount so determined shall be
credited to the Fund :
Provided that the amount of duty of excise as
determined by the [Assistant Commissioner of Central
Excise or Deputy Commissioner of Central Excise]
under the foregoing provisions of this subsection
shall, instead of being credited to the Fund, be paid to
the applicant, if such amount is relatable to –
(a)…..
(b)….
(c )….
(d)….
(e) the duty of excise borne by the buyer, if he
had not passed on the incidence of such duty
to any other person;
(f)….
(3) ….
(4) …
(5) For the removal of any notification issued under
clause (f) of doubts, it is hereby declared that the first
proviso to subsection (2), including any such
notification approved or modified under subsection
(4), may be rescinded by the Central Government at
any time by notification in the Official Gazette.]
[Explanation. — For the purposes of this section,
(A) ….
(B) “relevant date” means,
(a) …
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(i) …
(ii) …
(iii) ….
(b) ….
(c) ….
(d)….
(e) in the case of a person, other than the
manufacturer, the date of purchase of the goods by
such person;]
in the case of goods which are exempt from payment of
duty
(eb) ….
(ec) ….
(f) ….”
11. It is not disputed that the excise duty was paid by the
manufacturer(M/s. Fenner (India) Ltd.) under protest to the
department and the dispute with regard to the classification of
the product finally came to be decided by this Court in M/s.
(supra) and the manufacturer M/s. Fenner
Fenner India’s case
(India) Ltd. never moved any application for refund of the excise
duty at any given point of time. The appellant herein is the buyer
and purchased conveyor beltings from the manufacturer M/s.
th th
Fenner (India) Ltd. during the period 20 July, 1988 to 15
January, 1994 indicated in Civil Appeal No. 7625 of 2005. The
period for which the refund of excise duty has been claimed
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differs but in all the cases, applications have been filed by the
appellant(buyer) much after the period of limitation which was
six months from the date of purchase of goods at the time of
filing of the application to claim refund under Section 11B of the
Act.
12. Section 11B deals with the claim of refund of duty as paid
on his own accord by any person for refund of such duty to the
competent authority before the expiry of six months from the
relevant date as prescribed but where the duty was paid under
nd
protest in terms of the 2 proviso to Section 11B(1), the period of
limitation may not apply. Although the buyer can also apply for
refund provided the duty of excise is borne by the buyer and he
had not passed on the incidence of such duty to any other person
as referred to under Section 11B(2)(e) and the application has
been moved within the period of six months from the relevant
date of purchase of the goods by such person in terms of Section
11B(5)(B)(e) of the Act. The scheme of Section 11B makes a
distinction between right of the manufacturer to claim refund
from right of the buyer to claim refund treating them separate
and distinct for making an application for refund exercising their
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right under Section 11B of the Act and it has been examined by
the threeJudge Bench of this Court in Commissioner of
Central Excise, MumbaiII Vs. Allied Photographics India
Ltd. case (supra) as under:
“Therefore, Section 11B(3) stated that no refund
shall be made except in terms of Section 11B(2).
Section 11B(2)( e ) conferred a right on the buyer to
claim refund in cases where he proved that he had not
passed on the duty to any other person. The entire
scheme of Section 11B showed the difference between
the rights of a manufacturer to claim refund and the
right of the buyer to claim refund as separate and
distinct. Moreover, under Section 4 of the said Act,
every payment by the manufacturer whether under
protest or under provisional assessment was on his
own account. The accounts of the manufacturer are
different from the accounts of a buyer(distributor).
Consequently, there is no merit in the argument
advanced on behalf of the respondent that the
distributor was entitled to claim refund of “onaccount”
payment made under protest by the manufacturer
without complying with Section 11B of the Act.”
It was further held as under:
“Having come to the conclusion that the respondent
was bound to comply with Section 11B of the Act and
having come to the conclusion that the refund
application dated 1121997 was timebarred in terms
of Section 11B of the Act, we are not required to go into
the merits of the claim for refund by the respondent
who has alleged that it has not passed on the burden
of duty to its dealers.”
13. It may be appropriate to notice that the view earlier
expressed by the twoJudge Bench of this Court in
National
Winder Vs. Commissioner of Central Excise, Allahabad
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2003(11) SCC 361 was held to be per incuriam in Commissioner
of Central Excise, MumbaiII Vs. Allied Photographics India
Ltd. case (supra).
14. In the instant case, indisputedly the application was filed by
the appellant as a buyer of the goods(conveyor belts) from M/s.
Fenner (India) Ltd. who paid the duty under protest much after a
period of limitation(six months) as prescribed under the mandate
of law disentitles the claim of refund to the appellant as prayed
for in view of the judgment of this Court in
Commissoiner of
Central Excise, MumbaiII Vs. Allied Photographics India
Ltd. case (supra) holding that the purchaser of the goods was not
entitled to claim refund of duty made under protest by the
manufacturer without complying the mandate of Section 11B of
the Act, 1944.
15. In our considered view, the appeals are without substance
and deserve to be rejected. Consequently, the appeals fail and
are accordingly dismissed.
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………………………….J.
(A.M. KHANWILKAR)
………………………….J.
(AJAY RASTOGI)
NEW DELHI
February 20, 2019
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