In the case of M/s. Oswal Chemicals & Fertilizers Ltd. Vs Commissioner of Central Excise, Bolpur, it was held that a person who is ultimately aggrieved with the payment of the duty and challenges the order successfully can seek the refund as per Rule 11B of the act. It has been further pointed out that in case, the refund application is filed by the person other than manufacturer then even filing of the appeal should be treated as protest as per Rule 233B.
The appellant purchased Naphtha from BPCL and IOCL on payment of duty. Under Rule 192 of the Central Excise Rules 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 passed by Assistant Commissioner of Central Excise. 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) thereby granting permission to the appellant to procure Naphtha without payment of duty.
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 IOCL and BPCL and IOCL had paid the same, in turn, to the respondent-authorities, the appellant sought refund of the said duty. This refund application was rejected by the Assistant Commissioner of Central Excise, Durgapur-I Division. The appellant filed the appeal before the Commissioner of Central Excise (Appeals) challenging the aforesaid order. This appeal was dismissed by Commissioner (Appeals). Further appeal was preferred before the Customs, Excise and Service Tax Appellate Tribunal. The CESTAT appeal of the appellant has been dismissed.
The department contended that since it is the manufacturer which had paid the duty to the authorities, the appellant had no locus standi to claim the refund. Secondly, the application filed under Section 11B of the Central Excise Act, 1944 was not preferred within six months and therefore, was time barred.
Held by Hon’ble Supreme Court of India
The Hon’ble Supreme Court states that 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 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.
The Hon’ble Court further states that the appellant who had paid the excise duty to the manufacturer (BPCL & IOCL) had the necessary locus standi to file the application claiming the refund of the duty.
The Hon’ble Court pointed out that the reason given by the CESTAT is that the appellant had preferred this application before a wrong authority. In this regard the Hon’ble court noted that the appellant had filed the refund claim before the Central Excise Authorities at Durgapur. The appellant had also purchased the material from IOCL which is having its refinery at Durgapur. The show cause notice was also issued by the Superintendent of Central Excise at Durgapur. The Hon’ble court further noted that 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.
The Hon’ble Court further states that the assessee is claiming refund for the period 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 relied 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 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.
Further, the Hon’ble Court states that 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.
The Hon’ble Supreme Court held that application for refund was time barred and on this ground alone, the appellant will not be entitled to refund of the amount.