CHAMONG TEA CO. LTD V. COMMISSIONER OF CENTRAL EXCISE

C.Ex.App./6/2021

AI Insights

The case involves Chamong Tea Co. Limited, which appealed against the order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) that rejected their refund claims for excise duty exemptions under Notification No. 33/99-CE. The appellant argued that the rejection was unjustified as the provisions of Section 11B of the Central Excise Act, 1944, which deals with the limitation period for filing refund claims, should not apply to their case. The CESTAT had restored the order of the Assessing Authority, which initially rejected the refund claims on the grounds of limitation. The High Court examined whether the procedural requirements for claiming refunds under the notification were met and concluded that the appellant failed to adhere to these requirements.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 739919 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 22-12-2021
• Assessment Year: misc
• Other Referred Cases: M/s M.K. Jokai Agri Plantations (P) Ltd Vs. Commissions of Central Excise & Service Tax, Dibrugarh, Vernerpur Tea Estate Vs. Commissioner of Central Excise, Shillong
• Laws Referred To: Central Excise Act, 1944, Central Excise Tariff Act, 1985, Notification No. 33/99-CE dated 08.07.1999
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: S C KEYAL
• Assessee Lawyers: D SAHU
• Keywords: Central Excise; Installed Capacity; Limitation; Refund claim; Notification No. 33/99-CE
• Section: 3; 5A; 11B

Judgement Text

" C. Ex. Appeal No. 6 of 2021 Page 1 of 16 GAHC010076952018 IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH) C. EX. APPEAL NO.6 OF 2021 Chamong Tea Co. Limited (Duflating Tea Estate), At & PO: Titabor, Dist: Jorhat, Assam, PIN- 785630. ……..Appellant -Versus- Commissioner of Central Excise, Dibrugarh, West Milan Nagar, F- Lane, Dibrugarh, 786003 (Assam) ……..Respondent – B E F O R E – HON’BLE THE CHIEF JUSTICE MR. SUDHANSHU DHULIA HON’BLE MR. JUSTICE SOUMITRA SAIKIA Advocate for the appellant : Mr. D. Sahu, Advocate. Advocate for the respondent : Mr. S.C. Keyal, Senior Advocate. Judgment reserved on : 30th November, 2021 Judgment delivered on : 22nd December, 2021 C. Ex. Appeal No. 6 of 2021 Page 2 of 16 JUDGMENT AND ORDER (CAV) (Soumitra Saikia, J) This Central Excise appeal arises out of order dated 30.08.2017 passed by the Customs, Excise & Service Tax Appellate Tribunal (hereinafter referred as “CESTAT”), Kolkata. The short case which arises for consideration is the rejection of the refund claims of the appellant for exemption which the appellant claims it was eligible for, after the expansion of the installed capacity in their factory in terms of Notification No. 33/99-CE dated 08.07.1999. The CESTAT restored the order of the Assessing Authority which rejected, the refund claims filed by the appellant on the ground of limitation. 2. The appellant is a manufacturer of Tea including Tea Waste falling under Chapter 9 of the Central Excise Tariff Act, 1985. The appellant submitted its application dated 13.10.2008 seeking exemption from duties of excise in terms of Notification No. 33/99-CE dated 08.07.1999 on the ground that they have increased the overall installed capacity by 53% during the period from 24.12.1997 to 05.07.1999. The assessee also submitted along with its application, the Chartered Engineer’s assessment report for installed capacity together with Invoices/Challans in respect of the new machinery installed by them, diagrammatic C. Ex. Appeal No. 6 of 2021 Page 3 of 16 representation of the machineries before and after expansion etc. The assessee has claimed that after the expansion their installed capacity of the factory had increased by 53% as on 05.07.1999. 3. A show cause notice No. C. No. V(18)24/DCJ/REF/06/6892 dated 18.12.2008 was issued by the Department asking the appellant to show-cause as to why their claims should not be rejected as the same were submitted after about nine (9) years from the date of completion of expansion. The assessee replied to the show-cause notice stating that the limitation under Section 11B of the Central Excise Act, 1944 is not applicable in respect of refunds claimed under Notification No. 33/99-CE dated 08.07.1999. According to the appellant, because of certain confusions which arose during that period, they did not press their refunds initially. 4. The Assessing Officer upon hearing the authorized representatives of the appellant vide the order dated 20.02.2009 rejected the claims of the appellant. Being aggrieved, an appeal before the Commissioner, Customs and Central Excise (Appeals) was preferred against the order of the Assessing Officer. The First Appellate authority vide order dated 10.08.2009 allowed the appeal setting aside the order passed by the Assessing Officer, C. Ex. Appeal No. 6 of 2021 Page 4 of 16 namely the Assistant Commissioner, Central Officer, Jorhat, holding that the appellant is entitled to its refund claim. The Department being aggrieved preferred an appeal against the order of the Commissioner (Appeals) before the Tribunal. The Tribunal i.e. the CESTAT vide order dated 25.08.2017 allowed the appeal of the Department by relying on an earlier order passed by the Tribunal. The CESTAT set aside the Commissioner (Appeals) order and restored the orders passed by the adjudicating authority. 5. Being aggrieved, the present appeal under Section 35G of the Central Excise Act, 1944 has been filed by the assessee as the appellant raising the following substantial questions of law:- “1. Whether the order dated 25.08.2017 passed by the Customs. Excise and Service Tax Appellate Tribunal, East Zonal Bench, Kolkata (“CESTAT”) is based on correct appreciation of provisions of Notification No. 33/99-CE dated 08.07.1999? 2. Whether the CESTAT was legally justified in holding the that claim of refund of the appellant was barred by limitation in spite of the fact that there was no requirement of filing refund application under the provision of Section 11B of the Central Excise Act, 1944, in cases of exemption under Notification No. 33/99-CE dated 08.07.1999 on payment of duty on specified goods and filing of RT 12 return in the manner prescribed under the Central Excise Rules? 3. Whether merely on the ground of delay of filing of the statement under para 2(a) of the Notification No. 33/99-CE dated C. Ex. Appeal No. 6 of 2021 Page 5 of 16 08.07.1999 showing duty payment particulars can result in denial of Excise refund benefit to the appellant under the aforesaid Notification where the RT 12 returns were regularly filed within the specified period showing Central Excise duty paid during the period in question. 4. Whether the Assessee can be denied the substantial benefit of refund available as per notification No. 33/99-CE dated 08.07.1999 merely on the grounds of lapse in following procedural requirements? 5. Whether the CESTAT was justified in not following the earlier decisions of the coordinate benches on the same issue wherein the coordinate benches of the Tribunal held in respect of Notification No. 33/99-CE dated 08.07.1999 that no formal application is required to be filed under section 11B of the Central Excise Act, 1944 for claim of refund and refund is to be allowed on the basis of monthly returns filed?” 6. The learned counsel for the appellant submits that the rejection of the refund claims of the appellant on the ground of limitation is wholly unjustified as the Central Board of Excise & Customs vide letter No. 354/8/98-TRU (Part-II) dated 06.10.1999 clarified that the provisions of Section 11B of the Central Excise Act, 1944 are not applicable in case of refunds claimed under Notification No. 33/99-CE dated 08.07.1999. He further relies upon a Judgment of a Co-ordinate Bench of this Court rendered in M/s M.K. Jokai Agri Plantations (P) Ltd Vs. Commissions of Central Excise & Service Tax, Dibrugarh reported in 2018 (361) E.L.T. C. Ex. Appeal No. 6 of 2021 Page 6 of 16 393(Gau) to submit that this High Court has also held that refund claims under Notification No. 33/99-CE dated 08.07.1999 cannot be denied/negated on account of limitation. The Tribunal, therefore, erred in interfering with the findings of the Commissioner (Appeals) and the impugned order should therefore be set aside and quashed. 7. Mr. S.C. Keyal, learned Senior counsel for the Revenue on the other hand disputes the contentions of the learned counsel for the appellant. Mr. Keyal submits that there is no infirmity in the order of the Tribunal and the Tribunal had correctly restored the order of the Assessing Authority. Therefore, no substantial question arises in this appeal and consequently this appeal should be dismissed. 8. The submissions of the learned counsel for the appellant have been noted and the pleadings on record have been carefully perused. It is seen that in response to the show-cause notice dated 18.12.2008, the appellant submitted its reply dated 08.01.2009 before the Adjudicating Authority. In its reply, there is a categorical statement by the appellant, which reads as under: “Though we have proceeded to submit our claim for exemption during the initial years but due to confusing C. Ex. Appeal No. 6 of 2021 Page 7 of 16 situation as stated above as a result of different stands taken by the Department at different time we did not submit our claims. But subsequently we came across some cases of sanction of refund and decided to submit out claim.” Such averments have also been reflected in the order dated 02.02.2009 passed by the Adjudicating Authority. 9. We have given our conscious thoughts to the submissions made by the learned counsels for the parties. The pleadings on record have also been carefully perused. Before we proceed to address the contentions made before this Court, a reference to the Notification No. 33/99-CE dated 08.07.1999 is necessary. The said Notification reads as under:- “Notification No. 33/99-CE dated 8.7.1999 Specified goods of factories in North East- Exemption In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act/ 1944 (1 of 1944), read with sub- section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), and sub-section (3) of section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978, (40 of 1.978), of the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the Schedule appended to this notification and clear from a unit located in the state of Assam or Tripura or Meghalaya or Mizoram or Manipur, or Nagaland or Arunachal Pradesh, as the case may be, from so much of the duty of excise leviable thereon under any of the said Acts as is equivalent to C. Ex. Appeal No. 6 of 2021 Page 8 of 16 the amount of duty paid by the manufacturer of goods from the account current maintained under rule 9 read with rule 173G of the Central Excise Rules, 1944. 2. The exemption contained in this notification shall be given effect to in the following manner, namely :- (a) The manufacturer shall submit a statement of the duty paid from the said account current to the Assistant Commissioner or the Deputy Commissioner of Central Excise, as the case may be, by the 7th of the next month in which the duty has been paid from the account current. (b) The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification, as may be deemed necessary, shall refund the amount of duty paid from the account current during the month under consideration to the manufacturer by the 15th of the next month. (c) If there is likely to be any delay in the verification, Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall refund the amount on provisional basis by the 15th of the next month to the month under consideration and thereafter may adjust the amount of refund by such amount as may be necessary in the subsequent refunds admissible to the manufacturer 4. The exemption contained in this notification shall apply only to the following kind of units, namely :- (a) New industrial units which have commenced their commercial production on or after the 24th day of December, 1997; (b) Industrial units existing before the 24th day of December, 1997 but which have undertaken substantial expansion by way of increase in installed capacity by undertaken substantial expansion by way of increase in installed capacity by not less than twenty five per cent on or after the 24th day of December, 1997. 5. The exemption contained in this notification shall apply to any of the said units for a period not exceeding ten years from the date of publication of this notification or from the date of commencement of commercial production whichever is later. SCHEDULE 1. ………..” C. Ex. Appeal No. 6 of 2021 Page 9 of 16 10. A perusal of the Notification No. 33/99-CE dated 08.07.1999 reveals that the procedure for claiming exemptions under the notification is provided for under Clause-2 of the said Notification. Clause 2(a) provides that a statement of duty paid from the account current is to be submitted by the manufacturer (the appellant herein) to the Assistant Commissioner or Deputy Commissioner as the case may be, by the 7th of the next month in which the duty has been paid other than the amount of difference paid by utilization of CENVAT credit under CENVAT Rules, 2001. 11. In view of the procedures laid down by the Notification No. 33/99-CE dated 08.07.1999 under Clause 2(A) of the said Notification, it is clear that refunds are to be claimed by filing a statement of duty paid to the Assistant Commissioner or Deputy Commissioner of Central Excise as the case may be, by the 7th of next month by the manufacturer. 12. A perusal of the pleadings including the reply dated 08.01.2009 filed by the appellant before the authority concerned does not reveal that such a procedure had been followed by the appellant/assessee as laid down by the Notification No. 33/99-CE dated 08.07.1999. What instead has been urged is that since the provisions of Section 11B of the Central Excise Act, 1944 are not C. Ex. Appeal No. 6 of 2021 Page 10 of 16 applicable, no limitation is applicable and therefore, the claims made by the appellant cannot be debarred on the ground of limitation. While there is no quarrel with the proposition that in view of the several clarificatory notifications issued by the Custom and Central Excise Board, that limitation provided under Section 11B of the Central Excise Act, 1944 are not applicable, however, unless the Notification No. 33/99-CE dated 08.07.1999 is amended by the Central Government, the procedure prescribed thereunder including the requirement of filing statement of duty paid by the manufacturer by the 7th of next month as prescribed under Notification cannot be waived at the instance of the manufacturers/assessee unilaterally. Such an interpretation will amount to waiver of the procedure prescribed under the Notification by the Department/Central Government. Such proposition cannot be accepted more particularly in respect of revenue matters where public finance is involved. Although in the show-cause reply, it is stated that RT-12 Returns were regularly filed but there is no pleading with regard to any statement of fact as to whether the RT-12 Returns filed by the appellant/assessee were as per the procedure prescribed under Clause-2(a) of the Notification No. 33/99-CE dated 08.07.1999. There is completely no statement to that effect. Rather categorical statement is made C. Ex. Appeal No. 6 of 2021 Page 11 of 16 in the show-cause reply that because of different stands taken by the Department at different times the manufacturer/appellant did not submit their claims at the relevant point in time. 13. In view of such undisputed facts, the question which essentially arises for a decision in this appeal is not whether limitation under Section 11B of the Central Excise Act, 1944 is applicable in respect of refund claims made under Notification No. 33/99-CE dated 08.07.1999 but rather whether the procedure prescribed under Notification No. 33/99-CE dated 08.07.1999 can be waived unilaterally at the instance of a beneficiary like the appellant while claiming refunds for duty paid. In the proceedings before the Department there is no finding that the procedure prescribed under Clause 2(a) of the Notification No. 33/99-CE dated 08.07.1999 had been duly followed by the appellant. Rather in its reply to the show-cause Notice, the appellant only cited reasons for late filing of its refund claims. 14. The Judgment of a Co-ordinate Bench of this Court rendered in M/s M.K. Jokai Agri Plantations P. Ltd Vs. Commissions of Central Excise & Service Tax, Dibrugarh does not come to the aid of the appellant. In the said Judgment, while considering whether limitation under Section 11B of Central Excise C. Ex. Appeal No. 6 of 2021 Page 12 of 16 Act, 1944 would apply to refund claims made under Notification No. 33/99-CE dated 08.07.1999, this Court held that limitation under Section 11B of the Central Excise Act, 1944 will not be applicable provided the twin conditions are fulfilled namely, (i) substantial expansion of not less than 25% on or before 24th day of December, 1997 and (ii) filing of every month’s statement of duty paid from the account current to the Assistant Commissioner by the 7th of next month in which the duty has been paid from the account current. In the facts of that case since the assessee therein had fulfilled those conditions, this Court upheld the entitlement of the refund claims of the assessee therein and had held that when the twin conditions are satisfied, refund claims cannot be denied on the ground of limitation. 15. However, in the facts of the present case, there are no clear averments made by the appellant that conditions prescribed under Clause 2(A) of the Notification No. 33/99-CE dated 08.07.1999 has been fulfilled by the appellant. Rather entire thrust of the appellant’s case is that notwithstanding the delay of about nine (9) years in claiming the refund, since limitation under Section 11B of the Central Excise Act, 1944 is not attracted for claiming benefits under the notification, the appellant is entitled to C. Ex. Appeal No. 6 of 2021 Page 13 of 16 the refund claims made. Such contention of the appellant is clearly opposed to the law laid down this Court in M/s Jokai Agri Plantations Pvt. Ltd (Supra). 16. It is also pertinent to note that the earlier order of the Tribunal rendered in Vernerpur Tea Estate Vs. Commissioner of Central Excise, Shillong and reliance upon which was placed by the Tribunal while passing the order dated 30.08.2017 impugned in the present appeal, has in the meantime being interfered with by the same Co-ordinate Bench of this Court. This Court in Vernerpur Tea Estate reported in 2018 0 Supreme (Gau) 69 also held that no limitation under Section 11B of Central Excise Act, 1944 will be applicable in refund claims under Notification No. 33/99-CE dated 08.07.1999, provided the twin conditions prescribed under Clause 2(A) of the Notification No. 33/99-CE dated 08.07.1999 are fulfilled. We respectfully concur with the Judgments rendered in M/s Jokai plantations (Supra) and Vernerpur Tea Estate Pvt Ltd (Supra). 17. We have also carefully perused the substantial questions raised by the appellant. The substantial questions do not raise any questions of law with regard to the waiver of the procedure prescribed under Notification No. 33/99-CE relating to exemption C. Ex. Appeal No. 6 of 2021 Page 14 of 16 in the absence of any clarification/waiver issued by the Department or by the Finance Ministry. Further in the absence of any specific pleadings by the appellant/assessee that both the conditions prescribed under Clause 2(A) of the Notification No. 33/99-CE dated 08.07.1999 are fulfilled by the appellant/assessee, the benefit sought to be claimed by the appellant/assessee in terms of the Judgments rendered in M/s Jokai plantations (Supra) and Vernerpur Tea Estate Pvt Ltd (Supra) will not be available to the appellant/assessee. 18. The apex Court in M. Janardana Rao vs. Joint Commissioner of Income Tax, reported in (2005) 2 SCC 324 laid down the tests to distinguish between the question of law and substantial question of law. The apex Court while dealing with the substantial questions of law under Section 260A of the Income Tax Act, the principle of law which are equally applicable in respect of provision of Section 35G of the Central Excise Act, 1944 The relevant paragraphs reads as under: “14. Without insisting on the statement of substantial question of law in the memorandum of appeal and formulating the same at the time of admission, the High Court is not empowered to generally decide the appeal under Section 260-A without adhering to the procedure prescribed under Section 260-A. Further, the High Court must make every effort to distinguish between a question of C. Ex. Appeal No. 6 of 2021 Page 15 of 16 law and a substantial question of law. In exercise of powers under Section 260-A, the findings of fact of the Tribunal cannot be disturbed. It has to be kept in mind that the right of appeal is neither a natural nor an inherent right attached to the litigation. Being a substantive statutory right, it has to be regulated in accordance with law in force at the relevant time. The conditions mentioned in Section 260-A must be strictly fulfilled before an appeal can be maintained under Section 260-A. Such appeal cannot be decided on merely equitable grounds. 15. An appeal under Section 260-A can only be in respect of a “substantial question of law”. The expression “substantial question of law” has not been defined anywhere in the statute. But it has acquired a definite connotation through various judicial pronouncements. In Sir Chunilal V. Mehta & Sons Ltd. v. Century Spg. & Mfg. Co. Ltd. [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] this Court laid down the following tests to determine whether a substantial question of law is involved. The tests are: (1) whether directly or indirectly it affects substantial rights of the parties, or (2) the question is of general public importance, or (3) whether it is an open question in the sense that the issue is not settled by pronouncement of this Court or Privy Council or by the Federal Court, or (4) the issue is not free from difficulty, and (5) it calls for a discussion for alternative view. There is no scope for interference by the High Court with a finding recorded when such finding could be treated to be a finding of fact.” 19. In view of all the above, since in the absence of facts necessary not pleaded and no finding of fact being returned by the Departmental Authorities as well as by the CESTAT, no substantial question of law arises. Therefore, this appeal is C. Ex. Appeal No. 6 of 2021 Page 16 of 16 without any merit and the same is dismissed. Parties are left appeared to bear their own costs. JUDGE CHIEF JUSTICE Comparing Assistant "