CX - Car registered for use solely as taxi - Time limit for suomotu self-crediting of refund amount should have kept pace with s.11B of CEA, 1944: CESTAT
By TIOL News Service
MUMBAI, DEC 22, 2017: THE appellant M/s Mercedes Benz Ltd. had cleared a car to their dealer, M/s T&T, on 30th March 2010 but filed refund claim of Rs.5,75,750/- only on 3rd December 2010 in terms of notification 6/2006-CE (which exempts duty in excess of 10% subject to compliance with the conditions prescribed therein).
The dealer had not, admittedly, sold it to the taxi operator, M/s Maan Tourist Transport Services Pvt. Ltd, till 23rd July 2010 and was sent for registration only on 24th July 2010. Both the deadlines stipulated in the notification viz. for registration as well as for filing the claim had not been complied with leading to issue of notice dated 18th February 2011 for denial of refund claim which was confirmed by original authority and upheld by the lower appellate authority.
The appellant is, therefore, before the CESTAT and submits that the limitation prescribed in section 11B of CEA, 1944 cannot be truncated by a procedural notification for which reliance is placed on the decision in Sony India Pvt. Ltd - 2014-TIOL-532-HC-DEL-CUS.
Countering this plea, the AR argued that the ground of strict compliance with conditions of exemption as the basis of the decision of lower authorities is not amenable to dilution in view of the following decisions viz. Mihir Textiles Ltd - 2002-TIOL-833-SC-CUS, Kalyani Hayes Lemmerz Ltd - 2012-TIOL-1021-CESTAT-MUM and Amee Castor & Derivatives Ltd - 2009-TIOL-1463-CESTAT-AHM.
After adverting to the case laws cited, the Bench observed that the decision of the Delhi High Court could not be ignored.
It is further observed –
+ the higher rates of duty are leviable on motor vehicles which when put to private use would, in the language of contemporary discourse, be termed as demerit goods justifying the extra burden both for garnering revenue and as a disincentive; obviously, legislature did not intend to saddle a public conveyance with that disincentive.
+ it is, therefore, necessary to ascertain if the time prescribed in the notification has any significance that can lead to an interpretation detrimental to the use of the motor vehicle as a public conveyance. That the notification enshrines the intention of not subjecting public conveyances to the burden that tasks private vehicles is to state the obvious.
+ however, it does not appear to be reasonable that legislature intended only vehicles that were procured as taxis within six months of clearance from the premises of the manufacturer to be beneficiaries of the exemption. It would appear that the general law which prescribes a reasonable time frame for grant of refund should govern the suomotu provisional availment of refund by assessee.
+ the exemption has been vogue for long and must have been so crafted as to be in consonance with the general law relating to refunds i.e. section 11B of Central Excise Act, 1944 which for long limited claims to six months from date of payment of duty and, later, from relevant date. With effect from 12th May 2000, this bar of limitation was extended to one year.
+ that the time limit for suomotu self-crediting of refund amount should also have kept pace does appear to be a reasonable construction. That it was by oversight or disinclination to subject the purpose of the limitation in the procedure for refund in the impugned notification may not be far from the truth.
+ the motor vehicle having been consumed for the purpose for which the exemption was intended and there being no reasonable cause to presume that legislature intended the withholding of the burden only for such consumption within a limited period, the failure to file the refund claim within the time frame prescribed in the impugned notification should not lead to denial of the claim if it did not exceed the limit prescribed in section 11B of Central Excise Act, 1944.
The appeal was allowed.
Incidentally, the Tribunal also noted - Assessee has, apparently, taken credit of the refund amount in the account currentand it does not appear to have been reversed. The rejection of refund claim should have been followed up with recovery under section 11A of Central Excise Act, 1944… The decision in this appeal merely confirms the correctness of the credit so taken.
(See 2017-TIOL-4508-CESTAT-MUM)
