Limitation period under Excise Act not applicable to rebate claim filed

CA Bimal Jain

Deputy Commissioner of Central Excise, Chennai Vs. Dorcas Market Makers Pvt. Ltd and Commissioner of Central Excise (Appeals), Chennai [2015-TIOL-820-HC-MAD-CX]

Limitation period prescribed under Section 11B of the Excise Act is not applicable for the rebate claim filed under Rule 18 of the Excise Rules

Dorcas Market Makers Pvt. Ltd. (the Respondent) is engaged in the export of ‘Medimix‘ brand of Ayurvedic Toilet Soap, falling under CSH 3401.11.10 of the Central Excise Tariff Act. The Respondent filed a rebate claim on June 17, 2008 under Rule 18 of Excise Rules for refund of the duty paid for goods exported during the period July 1, 2006 to January 31, 2007 (rebate claim”. The Deputy Commissioner of Central Excise, Chennai rejected the rebate claim as time barred in terms of Section 11B of the Excise Act.

Later on, the denial of rebate claim was upheld by the Commissioner of Central Excise (Appeals), Chennai. Being aggrieved the Respondent filed a Writ Petition before the Hon’ble Madras High Court, wherein the matter was decided in favour of the Respondent and it was held that rebate claim filed is not time barred as Rule 18 of the Excise Rules is self-contained and has to be construed independently. Being aggrieved, the Department preferred an appeal before the Hon’ble Supreme Court.

The Hon’ble Supreme Court held as under:

• No dispute exist that the Respondent actually exported the goods in the instant case as the same is evident from ARE-1 forms;
• Even, the facts that whether the exports have taken place and duty had been paid or not, can be ascertained from facility of online filing of applications;
• Rule 18 of the Excise Rules itself does not stipulate a period of limitation;
• Rebate Claim under Rule 18 of the Excise Rules should be as per notification issued by the Central Government and in this regard Notification No. 19/2004-CE (NT) dated September 6, 2004 (Notification 19/2004) was issued;
• Further, Notification 19/2004 has superseded the previous Notification No. 41/94-CE (NT) dated September 12,1994 which prescribed the time limit for filing claim. But, Notification 19/2004 does not contain the stipulation regarding limitation. This was a conscious decision taken by the Central Government and hence, the view taken by the learned Judge of the Hon’ble High Court that Rule 18 of the Excise Rules is to be construed independently is fair and reasonable;

Thus, the Hon’ble Supreme Court allowed the appeal in favour of the Respondent holding that period of limitation prescribed under Section 11B of the Excise Act is not applicable to rebate claim filed as both Rule 18 of the Excise Rules and Notification 19/2004 does not prescribe the time limit for filing rebate claim.

Download High Court Judgment- Deputy Commissioner of Central Excise Vs. Dorcas Market Makers Pvt. Ltd (Madras High Court)

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)

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