Page 1

C.A. No. 2807 of 2004 1

'REPORTABLE' IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2807 OF 2004

M/S. OSWAL CHEMICALS & FERTILIZERS LTD.     ... Appellant VERSUS

COMMISSIONER OF CENTRAL EXCISE, BOLPUR      ... Respondent

J U D G M E N T A. K. SIKRI, J.

In the present appeal filed by the assessee, it is  seeking  refund  of  duty  which  was  initially  paid  by  M/s.Bharat  Petroleum  Corporation  Limited  (hereinafter  referred to as 'BPCL').  According to the appellant, this  duty was paid by it to the BPCL on purchase of Naphtha  from  BPCL.   The  period  involved  is  25.09.1996  to  16.10.1996.  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

Page 2

C.A. No. 2807 of 2004 2

procure Naphtha without payment of duty.  This certificate  was initially refused by the Departmental authorities vide  Order-in-Original  dated  08.07.1997  passed  by  Assistant  Commissioner of Central Excise, Sitapur Division.  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)  on  30.10.1998,  thereby  granting  permission  to  the  appellant  to  procure  Naphtha  without  payment of duty.   

It is not in dispute that, thereafter, armed with the  said certificate the appellant has been purchasing Naphtha  without payment of duty.  However, 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  BPCL  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  vide  Order-in-Original  dated  19.01.2000  on  two  grounds.  The first reason given by the authority was that  since it is the manufacturer which had paid the duty to  the  authorities,  the  appellant  had  no  locus  standi to  claim the refund.  The second reason given was that the  application filed under Section 11B of the Central Excise  Act,  1944  (hereinafter  referred  to  as  'Act')  was  not

Page 3

C.A. No. 2807 of 2004 3

preferred  within  six  months  and  therefore,  was  time  barred.   

The  appellant  filed  the  appeal  before  the  Commissioner of Central Excise (Appeals) challenging the  aforesaid order.  This appeal was, however, dismissed on  14.08.2001.   Further  appeal  was  preferred  before  the  Customs, Excise and Service Tax Appellate Tribunal, New  Delhi,  (hereinafter  referred  to  as  'CESTAT').   Again  unsuccessfully,  as  by  the  impugned  orders  dated  20.11.2003,  the  appeal  of  the  appellant  has  been  dismissed.  

The CESTAT has not decided the issue of limitation  and authoritatively dismissed the appeal giving two other  reasons.  First reason is the same as which was the basis  of the dismissal of appeal by the Commissioner (Appeals)  as well, namely, the appellant lacked locus standi to file  the refund claim.  Another reason which had persuaded the  CESTAT to dismiss the appeal was that the refund claim was  preferred before a wrong authority.   

Insofar as dismissing the application on the ground  that the appellant did not have locus standi, we find that  view taken by the authorities below is clearly erroneous  in  law.   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

Page 4

C.A. No. 2807 of 2004 4

the duty.  The relevant portion of Section 11B reads as  under:  

“Section 11B. Claim for refund of duty. - (1) Any  person claiming refund of any duty of excise may  make an application for refund of such duty to the  Assistant Commissioner of Central Excise before the  expiry of six months from the relevant date in such  form  and  manner  as  may  be  prescribed  and  the  application shall be accompanied by such documentary  or other evidence (including the documents referred  to in Section 12A) as the applicant may furnish to  establish  that  the  amount  of  duty  of  excise  in  relation  to  which  such  refund  is  claimed  was  collected from, or paid by, him and the incidence of  such duty had not been passed on by him to any other  person:  

Provided that where an application for refund  has been made before the commencement of the Central  Excises and Customs Laws (Amendment) Act, 1991, such  application shall be deemed to have been made under  this sub-section as amended by the said Act and the  same  shall  be  dealt  with  in  accordance  with  the  provisions of sub-section (2) substituted by that  Act:

Provided further that the limitation of six  months shall not apply where any duty has been paid  under protest.”

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.  This becomes apparent from the reading of clause (e) to

Page 5

C.A. No. 2807 of 2004 5

Explanation (B) appended to the aforesaid provision which  is as under:  

“Explanation. - For the purposes of this section, - .......................... .......................... (B) “relevant date” means, -

..........................

.......................... (e) in the case of a person, other than the  

manufacturer, the date of purchase of the goods by  such person;

..........................”

Explanation (B) defines “relevant date”.  Though this  date has reference to the calculation of limitation period  for the purposes of seeking refund of the duty under the  aforesaid provision.  However, clause (e) while stating  the “relevant date” clarifies that in case of a person,  other than the manufacturer, the date of purchase of goods  by other person would be the relevant date.  This itself  indicates  that  the  person  can  be  other  than  the  manufacturer  and  Explanation  (B)  caters  to  such  other  person.  It is not even necessary to embark on detailed  discussion on this aspect inasmuch as we note that the  Constitution Bench of this Court in 'Mafatlal Industries  Ltd. and others v. Union of India and others' [1997(5) SCC  536]  has  already  settled  this  aspect  in  the  following  words: -

Page 6

C.A. No. 2807 of 2004 6

“(xii) Section  11-B  does  provide  for  the  purchaser  making the claim for refund provided he is able to  establish  that  he  has  not  passed  on  the  burden  to  another person.  It, therefore, cannot be said that  Section  11-B  is  a  device  to  retain  the  illegally  collected taxes by the State.  This is equally true of  Section 27 of the Customs Act, 1962.”

We are, therefore, of the opinion that the appellant  who had paid the excise duty to the manufacturer, viz.,  M/s Indian Oil Corporation Ltd. (hereinafter referred to  as 'IOCL') and BPCL in the instant case, had the necessary  locus standi to file the application claiming the refund  of the duty.   

The second reason given by the CESTAT, as mentioned  above,  is  that  the  appellant  had  preferred  this  application before a wrong authority.  Here we find that  the  appellant  had  filed  the  refund  claim  before  the  Central Excise Authorities at Durgapur.  The appellant had  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.  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.  We find that  the purchases were from depot at Rajbandh under the IOCL  refinery  at  Durgapur  and  therefore,  the  Central  Excise

Page 7

C.A. No. 2807 of 2004 7

authorities  at  Durgapur  had  the  requisite  jurisdiction  over IOCL Depot located at Rajbandh, as it comes under  Durgapur Commissionerate.   

Our aforesaid discussion leads to the conclusion that  the  two  reasons  given  by  the  CESTAT  in  dismissing  the  appeal of the assessee are not correct.  As noted above,  insofar as the question of limitation is concerned, the  CESTAT  did  not  give  final  pronouncement  thereupon.   In  normal course, we could have remitted the case back to the  CESTAT  for  decision  on  that  issue.   However,  we  have  necessary factual details before us and as the matter is  quite old, we deem it apposite to decide this issue of  limitation  in  these  proceedings  itself  rather  than  remanding the case back to the CESTAT.

It is not in dispute that in terms of Section 11B,  the  application  for  refund  is  to  be  made  within  six  months.  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, is relying 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 question is as to whether the protest  was lodged by the appellant.  It is sought to be argued by  the learned counsel for the appellant that the appellant

Page 8

C.A. No. 2807 of 2004 8

had filed the appeal against the Order-in-Original passed  by  the  Assistant  Commissioner  denying  CT-2  certificate  which should be treated as protest.  It is argued that 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.  That  may  be  so  and  to  that  extent,  we  agree  with  Mr.Lakshmikumaran,  learned  counsel  appearing  for  the  appellant.  He is right in his submission that protest as  per Rule 233B refers only to a manufacturer and therefore,  a  person  like  the  appellant,  who  was  only  a  purchaser  could not have made any protest in terms of Rule 233B.  Therefore, if protest is lodged in one form or the other  that  should  be  construed  as  satisfying  the  condition  stipulated in second proviso to Section 11B.   

Having said that, in the present case, we find that  the  appeal  was  filed  only  in  September,  1997  or  thereafter, though exact date of filing the appeal is not  disclosed.  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.  We therefore, are of the opinion that  application for refund was time barred and on this ground  alone, the appellant will not be entitled to refund of the

Page 9

C.A. No. 2807 of 2004 9

amount.   

The  appeal  of  the  appellant  therefore,  stands  dismissed, though, on a different ground than the reasons  stated in the order of the CESTAT.  No costs.     

........................, J. [ A.K. SIKRI ]

........................, J. [ ROHINTON FALI NARIMAN ]

New Delhi; March 30, 2015.