Limitation Period U/Section 11B Central Excise Act Applicable To Claims For Rebate Of Duty U/Rule 18 Central Excise Rules : Supreme Court

The Supreme Court held that while making claim for rebate of duty under Rule 18 of the Central Excise Rules, 2002, the period of limitation prescribed under Section 11B of the Central Excise Act, 1944 shall have to be applied and applicable.

The bench of Justices MR Shah and MM Sundresh approved the view taken by the Bombay High Court in the case of Everest Flavours Ltd. v. Union of India, 2012 (282) ELT 481 and also overruled contrary decisions of Madras High Court, Allahabad High Court, Punjab & Haryana High Court and Rajasthan High Court.

In this case, the Karnataka High Court upheld the order passed by the Deputy Commissioner, Large Tax Payer Unit, Bengaluru rejecting the claim of the Sansera Engineering Limited for rebate on the ground that the claim was barred by time/limitation prescribed under Section 11B of the Central Excise Act, 1944

The issue raised before the Apex Court was whether the claim for rebate of duty provided under Rule 18 of the Central Excise Rules, 2002, the period of limitation prescribed under Section 11B of the Central Excise Act, 1994 shall be applicable or not?

As per Section 11B(1) of the Act, any person claiming refund of any duty of excise (including the rebate of duty as defined in Explanation (A) to Section 11B of the Act) has to make an application for refund of such duty to the appropriate authority before the expiry of one year from the relevant date and only in the form and manner as may be prescribed. As per Explanation (A) to Section 11B, "refund" includes "rebate of duty" of excise. However, the appellant's contention was that in Rule 18 of the 2002 Rules and notification dated 6.9.2004, there is no mention to the applicability of Section 11B of the Act and that the claim for rebate of duty under Rule 18 is different and distinct than that of the claim for refund of duty under Section 11B of the Act.

"Merely because in Rule 18 of the 2002 Rules, which is an enabling provision for grant of rebate of duty, there is no reference to Section 11B of the Act and/or in the notification dated 6.9.2004 issued in exercise of powers conferred by Rule 18, there is no reference to the applicability of Section 11B of the Act, it cannot be said that the provision contained in the parent statute, namely, Section 11B of the Act shall not be applicable, which otherwise as observed hereinabove shall be applicable in respect of the claim of rebate of duty.", the bench observed.

The court observed that a subordinate legislation cannot be interpreted in such a manner that parent statute may become otiose or nugatory.

"The subordinate legislation cannot override the parent statute. Subordinate legislation can always be in aid of the parent statute. At the cost of repetition, it is observed that subordinate legislation cannot override the parent statute. Subordinate legislation which is in aid of the parent statute has to be read in harmony with the parent statute. Subordinate legislation cannot be interpreted in such a manner that parent statute may become otiose or nugatory.", the court added.

In the present case, the court noted that the respective claims were beyond the period of limitation of one year from the relevant date. Dismissing the appeals, the bench said that the claims were rightly rejected by the appropriate authority.

Case details

Sansera Engineering Limited vs  Deputy Commissioner, Large Tax Payer Unit, Bengaluru | 2022 LiveLaw (SC) 997 | CA 8717 OF 2022 | 29 Nov 2022 | Justices MR Shah and MM Sundresh

For Appellant(s) Mr. Arvind P. Datar, Sr. Adv. Mr. Harish Bindumadhavan, Adv. Mr. Pawanshree Agrawal, AOR Mr. Manmohan Ellapan, Adv. Mr. Deepak Rao, Adv. Mr. Shrayashree Thiyagarajan, Adv.

For Respondent(s) Mr. Siddhant Kohli Adv. Mr. Shyam Gopal, Adv. Ms. Chinmayee Chandra, Adv. Ms. Suhasini Sen, Adv. Mr. Annirudh Sharma, Adv. Mr. Mukesh Kumar Maroria, AOR

Headnotes

Central Excise Act, 1944 ; Section 11B - Central Excise Rules, 2002 ; Rule 18 - While making claim for rebate of duty under Rule 18 of the Central Excise Rules, 2002, the period of limitation prescribed under Section 11B of the Central Excise Act, 1944 shall have to be applied and applicable. (Para 15)

Subordinate Legislation - Subordinate legislation cannot override the parent statute. Subordinate legislation which is in aid of the parent statute has to be read in harmony with the parent statute. Subordinate legislation cannot be interpreted in such a manner that parent statute may become otiose or nugatory. (Para 10)

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