CX – It does not appear to be purpose of Notf. irrespective of amount forked out by way of duty paid on cement & steel, appellant would be entitled to claim refund @ 6% of cost of construction: HC
By TIOL News Service
CHENNAI, JUNE 29, 2017: THE entire appeal is pivoted on the interpretation of the Notification bearing No. 32/2005-CE, as amended.
The authorities below have restricted the refund claimed by the appellant to the extent of duty paid on cement and steel, utilised in the construction of houses, which were affected by tsunami.
The appellant contends that as per clause 3(d) of the Notification the refund ought to have been sanctioned at the rate of 6% of the cost of construction of such like houses, subject to a maximum of Rs.9,000/- per house.
The High Court extracted the impugned notification which reads –
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In exercise of the powers conferred by subsection (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with section 91 and section 93 of the Finance (No.2) Act, 2004, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts cement falling under Chapter 25, and steel falling under Chapters 72 or 73 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as said goods) used in construction of houses, in tsunami affected districts of States of Tamil Nadu, Andhra Pradesh, Kerala and Union Territories of Pondicherry and Andaman and Nicobar Islands (hereinafter referred to as said areas), from the whole of the duty of excise leviable thereon under the said Acts (hereinafter referred to as the said duties).
2. x x x
3. The exemption contained in this notification shall be given effect to in the following manner:-
(a) The manufacturer of the said goods shall pay duties as applicable at the time of clearance and shall not be eligible for the refund of said duties.
(b) x x x;
(c) The approved construction agency shall file a claim for refund of the said duties paid on the said goods procured and utilised in construction of such houses by it along with a self certified consumption certificate of the said goods to the jurisdictional excise officer, on a quarterly basis, within sixty days from the end of the relevant quarter and such period may be extended by the jurisdictional excise officer by another sixty days;
(ca) x x x;
(d) The jurisdictional excise officer shall, after satisfying himself that the said goods have been used for the specified purposes, and on production of documentary evidence about the duty paid on the said goods, and the completion certificate and the consolidated consumption certificate as specified in clause (ca) above, by the approved construction agency, sanction the refund claim, at the rate of 6% of the cost of construction of such house or houses, as the case may be, subject to a maximum of Rs.9000 per house constructed ; and
(e) x x x.
4. The amount of refund shall not exceed 6% of the cost of construction or Rs.9000 per house constructed, whichever is less, in any case.
5. The exemption contained in this notification shall only be in respect of said duties paid on the said goods, which have been used in such houses constructed on or after the 1st April, 2005 and on or before 31st July, 2007.
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The High Court observed –
++ The purpose of issuing the Notification, which is an exemption Notification, was to reimburse the specified goods from "whole of the duty of excise leviable" under the Central Excise Act, 1944.
++ It is made clear that the exemption would apply only, if, the said goods, which would be steel and cement, are used in the construction of houses, which would include temporary shelters.
++ The clause, on which, though, emphasis is placed by the appellant, as indicated at the very outset, is clause 3(d). Based on the said clause, … the appellant, says that the refund had to be allowed to the appellant at the rate of 6% of the cost of construction, subject to a maximum of Rs.9,000/- per house.
++ The said submission fails to take note of clause 5, as rightly pointed out by the Tribunal, which, clearly, provides that the exemption contained in the Notification shall only be in respect of the duties paid on the cement and steel.
++ If the opening part of the Notification is read along with clause 5, the only conclusion one could reach is that the entire object and purpose of the Notification was to reimburse the whole of the duty in respect of cement and steel, which was used in construction of tsunami affected houses and/or temporary shelters.
++ It does not appear to be the purpose of the Notification that irrespective of amount forked out by the appellant by way of duty paid on cement and steel, it would be entitled to claim refund at the rate of 6% of the cost of construction, subject to a maximum of Rs.9,000/- per house, whichever is less.
++ Upon the notification being read in the manner, as indicated above, the only conclusion one can reach, is that, it envisages reimbursement of duty paid on cement and steel used in the construction of tsunami affected houses and/or temporary shelters.
Concluding that there is no reason to interfere with the judgments of the Tribunal, the Questions of law were answered in favour of the Revenue and against the assessee/appellant.
Accordingly, the appeals were dismissed.
In passing: There is no greater impediment to the advancement of knowledge than the ambiguity of words – Thomas Reid .
(See 2017-TIOL-1208-HC-MAD-CX)
