Time limit for filing refund by purchaser - duty paid under protest-applicability of

PJ/Case Laws/2011-12/1286

Case: National Winder Vs Commissioner of Central Excise, Allahabad

Citation: 2003-TIOL-43-SC-CX

Issue:- Whether time limit of filing refund is same for purchaser as for supplier if duty is being paid under protest?

Brief Facts:- Assessee has filed appeal against decision of Larger Bench of the Tribunal wherein it was held that a purchaser who claims refund under Section 11B must do so within six months of the date of purchase of the goods. It was held that the purchaser is not entitled to the benefit of the proviso to that Section even if the manufacturer has paid the duty under protest.

Reasoning of the Judgment:- The Supreme Court perused the provisions of Section 11B and noted that the Section was amended in 1991. After the amendment by virtue of sub-clause (a) in Explanation “B” of Section 11B even a purchaser can claim refund. A manufacturer has to file his claim for refund within six months from the relevant date. The purchaser also has to file a claim for refund within six months from the date of purchase of the goods. The wordings of the proviso are relevant viz., “Provided further that the period of limitation of six months shall not apply where any duty has been paid under protest”.

Significantly, the proviso does not state that the period of limitation of six months will not apply where no protest has been lodged by the purchaser. Duty will always be paid by the manufacturer. Under Rule 233B, at the time the manufacturer pays duty, he has to lodge a protest. A receipt or endorsement of “duty paid under protest” is issued to the manufacturer.

There is no Rule or provision by which protest can be lodged by a purchaser. The wording of the proviso shows that the Legislature has worded the proviso in a manner which covers all claims for refund. The wide language of the proviso shows that it covers not just claims for refund by the manufacturer but also claims for refund by the purchaser. Thus, if duty is paid by a manufacturer under protest, then the limitation of six months will not apply even to a claim for refund by the purchaser.

The Supreme Court is, therefore, unable to accept the majority view. The impugned judgment accordingly set aside.

However, it was clarified that before refund can be claimed either by the manufacturer or by the purchaser, the conditions of Section 11B must be fulfilled viz., it must be shown that the amount of duty of excise in relation to which such refund is claimed was “collected from or paid” by the person claiming refund and that the incidence of such duty has not been passed on by him to any other person. Therefore, even in a claim for refund by the purchaser, he would have to satisfy the Department that these conditions are fulfilled before any refund can be made to him. Matter remanded back

Decision:- Appeal disposed off accordingly.

Comment:- This is very important decision wherein it is held that the protest filed by supplier will operate for the purchaser.

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PJ/Case Laws/2011-12/1286

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