Summary
An exporter paid excise duty on goods exported in 2015-16 and claimed rebate under Rule 18 of the Central Excise Rules, 2002 in February 2017. The claims were rejected as filed beyond the one year allowed by Section 11B of the Central Excise Act. The exporter argued that a Rule 18 rebate is distinct from a refund, and that neither the Rule nor the 2004 notification imported Section 11B until 2016. The Supreme Court rejected this. Explanation (A) to Section 11B defines refund to include rebate on exported goods. The parent statute cannot be made otiose by silence in subordinate legislation, and a statutory limitation cannot be replaced by a 'reasonable time'. Following Mafatlal and Uttam Steel, and approving the Bombay High Court in Everest Flavours, it held Raghuvar inapplicable and overruled contrary High Court decisions.
Issues
- Whether the one-year limitation in Section 11B of the Central Excise Act, 1944 applies to claims for rebate of duty on exported goods under Rule 18 of the Central Excise Rules, 2002 and notification dated 06.09.2004.
Provisions considered
- Section 11B and Explanations (A) and (B), Central Excise Act, 1944'Refund' includes rebate of duty on exported goods, and the relevant date is linked to export; a rebate application must be made within one year of the relevant date in the prescribed form and manner. (¶¶ 8, 9)
- Rule 18 and Notification No. 19/2004-CE(NT) dated 06.09.2004, Central Excise Rules, 2002As subordinate legislation made under Section 37, they prescribe the form and manner of rebate claims and must be read in harmony with Section 11B; their silence on limitation does not exclude it. (¶¶ 10, 11)
Held
- Section 11B applies to rebate claims, since Explanation (A) includes rebate of duty on exported goods within refund; the absence of any reference to Section 11B in Rule 18 or the 2004 notification does not exclude the parent statute. (¶¶ 9, 11)
- Subordinate legislation cannot override or render otiose the parent statute; accepting the appellant's case would leave rebate claims without limitation, and where a statute fixes a period the plea of 'reasonable time' cannot be accepted. (¶ 10)
- The issue is covered by Mafatlal Industries and Uttam Steel; Raghuvar (India), which concerned Section 11A and recovery of Modvat credit under Rule 57-I, does not apply, and the Madras, Allahabad, Punjab and Haryana and Rajasthan High Court decisions following it are overruled, while Everest Flavours (Bombay) is approved. (¶¶ 12, 13, 14)
Result
Civil Appeal No. 8717 of 2022 dismissed, upholding the Karnataka High Court judgment dated 23.07.2021 in Writ Appeal No. 249 of 2020 and the rejection of the rebate claims as time-barred; no costs.