M/S. OSWAL CHEMICALS & FERTILIZERS LTD.versusCOMMISSIONER OF CENTRAL EXCISE, BOLPUR

                   [2015] 4 S.C.R. 487


    M/S. OSWAL CHEMICALS & FERTILIZERS LTD.                  A

                            v.

   COMMISSIONER OF CENTRAL EXCISE, BOLPUR

              (Civil Appeal No.2807 of 2004)                 B

                    MARCH 30, 2015

          [A.K. SIKRI AND R. F. NARIMAN, JJ.]

     Central Excise Act, 1944 - s.118 - Application by C
purchaser of 'Naphtha' - For refund of duty paid by it to the
manufacturer of 'Naphtha' - After obtaining CT-2 certificate
- Entitlement of the purchaser for refund - Appellate
Tribunal rejected the claim for refund on the grounds that
                                                              0
the purchaser lacked locus standi to claim and that the
claim was made before wrong authority - On appeal, held:
        •
Though the purchaser had the locus standi to make the
claim and the claim was also made before the authority
having requisite jurisdiction - But the purchaser is not E
entitled to the claim as the same was time-barred - Central
Excise Rules, 1944 - r. 192 - Notification No. 75184-CE
dated 01.03.1984 - Notification No.8196-CE dated 23.07.
1996.
                                                             F
    Dismissing the appeal, the Court

     HELD: 1. Section 118 of the Central Excise 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 the duty. Though the duty G
u/s. 11 B 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
                           487                               H
488         SUPREME COURT REPORTS                 [2015] 4 S.C.R.


A 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 Explanation (8) appended to s.118 which defines
B "relevant date". This indid'dtes that the person can be
  other than the manufacturer and Explanation (8) caters
  to such other person. Therefore, the appellant who
  had paid the excise duty to the manufacturer had the
  necessary locus standi to file the application claiming
C the refund of the duty. [Paras 5, 6, 7 and 8] (491-G; 492-
  G-H; 493-A, D-F]

          Mafatlal Industries Ltd. and others v. Union of India and
      others 1996 (10) Suppl. SCR 585: 1997(5) SCC 536 -
      followed.
0
      2. The reason given by the CESTAT that the
  appellant had preferred the application before a wrong
  authority, is factually incorrect. The purchases were
  from depot at Rajbandh under the IOCL refinery at
E Durgapur and therefore, the Central Excise authorities
  at Durgapur had the requisite jurisdiction over IOCL
  Depot located at Rajbandh, as it comes under
  Durgapur Commissionerate. [Para 8] (494-C,F,G]
       3. In terms of Section 118, the application for
F 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
  protest as per Rule 2338 refers only to a manufacturer
G and therefore, a person like the appellant, who was
  only a purchaser could not have made any protest in
  terms of Rule 2338. Therefore, if protest is lodged in
  one form or the other that should be construed as
  satisfying the condition stipulated in second proviso to
H
OSWAL CHEM. & FERT. LTD. v. COMMNR. OF CENTRAL489
               EXCISE, BOLPUR

Section 118. In the present case, the appeal against A
order denying CT-2 certificate was filed only in
September, 1997 or thereafter. 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 B
protest would not come to the aid of the appellant.
Thus, the application for refund was time-barred and
on this ground alone, the appellant will not be entitled
to refund of the amount. [Paras 10 and 11] [495-B, C,
496-A-C, G-H, 496-A-C]                                   C

                   Case Law Reference
   1996 (10) Suppl. SCR 585         Followed.     Para 7
    CIVIL APPELLATE JURISDICTION: Civil Appeal No.              D
2807 of 2004.
    From the Judgment and Order dated 20.11.2003 of the
Customs, Excise and Service Tax Appellate Tribunal, New
Delhi in Appeal No. E/41/2002-C.                        E
    V. Lakshmikumaran, M. P. Devanath, Vivek Sharma, L.
Charanaya, Aditya Bhattacharya, R. Ramachandran, Hemant
Bajaj, Ambarish Pandey, Rajesh Kumar, Anandh K., for the
Appellant.
                                                                F
    N. K. Kaul, ASG, Raghavendra M. Sajaj, Silpa Nair, Arijit
Prasad, B. Krishna Prasad, for the Respondent.

    The Judgment of the Court was delivered by

     A. K. SIKRI, J. 1. In the present appeal filed by the G
assessee, it is seeking refund of duty which was initially paid
by Mis.Bharat 1--'etroleum 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 H
490       SUPREME COURT REPORTS                    (2015] 4 S.C.R.


A 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
8 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
C also simultaneously requesting the authorities to issue CT-2
  certificate to enable it to procure Naphtha without payment of
  duty. This certificate was initially refused by the Departmental
  authorities vide Order-in-Original dated 08.07.1997 passed
D 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
E Commissioner (Appeals) on 30.10.1998, thereby granting
  permission to the appellant to procure Naphtha without
  payment of duty.·

       2. It is not in dispute that, thereafter, armed with the said
F 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
G respondent-authorities, the appellant sought refund of the
  said duty. This refund application was rejected by the
  Assistant Commissioner of Central Excise, Durgapur-1
  Division vide Order-in-Original dated 19.01.2000 on two
H grounds. The first reason given by the authority was that
OSWAL CHEM. & FERT. LTD. v. COMMNR. OF CENTRAL491
        EXCISE, BOLPUR [A. K. SIKRI, J.]

since it is the manufacturer which had paid the duty to the A
authorities, the appellant had no locus standi to claim the
refund. The second reason given was that the application
filed under Section 11 B of the Central Excise Act, 1944
(hereinafter referred to as 'Act') was not preferred within six 8
months and therefore, was time barred.

    3. The appellant filed the appeal before the
Commissioner of Central Excise (Appeals) challenging the
aforesaid order. This appeal was, however, dismissed on C
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, D
the appeal of the appellant has been dismissed.

     4. 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          E
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.                           F

    5. 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.       G
Section 11 B 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 the duty. The
relevant portion of Section 11 B reads as under:
                                                                  H
492       SUPREME COURT REPORTS                 [2015] 4 S.C.R.


A        "Section 118. 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
 B       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
c        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:
D
         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
 E       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
 F       not apply where any duty has been paid under protest."

      6. The said provision is made for obvious reasons.
  Though the duty under Section 11 B of the Act is payable by
G 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
H apparent from the reading of clause (e) to Explanation (B)
OSWAL CHEM. & FERT. LTD. v. COMMNR. OF CENTRAL493
        EXCISE, BOLPUR [A. K. SIKRI, J.]

appended to the aforesaid provision which is as under:          A

     "Explanation. - For the purposes of this section, -



                                                                8

     (8) "relevant date" means, -


                                                                c

      (e) in the case of a person, other than the
     manufacturer, the date of purchase of the goods by
     such person;                                               D

    Explanation (8) 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      E
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       F
(8) 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' G
[1997(5) sec 536] has already settled this aspect in the
following words: "(xii) Section 11-8 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        H
494         SUPREME COURT REPORTS                   [2015] 4 S.C.R.


A          is a device to retain the illegally collected taxes by the
      State. This is equally true of Section 27 of the Customs Act,
      1962."

            7. We are, therefore, of the opinion that the appellant
 8    who had p~id 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.
c
       8. 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
D 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
E 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
F depot at Rajbandh under the IOCL refinery at Durgapur and
  therefore, the Central Excise authorities at Durgapur had the
  requisite jurisdiction over IOCL Depot located at Rajbandh,
  as it comes under Durgapur Commissionerate.
G
      9. 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
H CESTAT did not give final pronouncement thereupon. In
OSWAL CHEM. & FERT. LTD. v. COMMNR. OF CENTRAL495
        EXCISE, 80LPUR [A. K. SIKRI, J.]

normal course, we could have remitted the case back to the A
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 8
the case back to the CESTAT.

     10. It is not in dispute that in terms of Section 118, the
application for refund is to be made within six months. The
assessee is claiming refund for the period from 25. 09 .1996 c
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 118 which stipulates that the limitation of six months
                                                                0
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 had filed
the appeal against the Order-in-Original passed by the E
Assistant Commissioner denying CT-2 certificate which
should be treated as protest. It is argued that the protest as
stipulated under Rule 2338 of the Rules refers only to a
manufacturer and since the appellant is not the manufacturer F
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 2338 refers only to a G
manufacturer and therefore, a person like the appellant, who
was only a purchaser could not have made any protest in
terms of Rule 2338. Therefore, if protest is lodged in one
form or the other that should be construed as satisfying the H
496         SUPREME COURT REPORTS                    [2015] 4 S.C.R.


A     condition stipulated in second proviso to Section 118.

            11. 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
 B    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
c     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 amount.

           12. The appeal of the appellant therefore, stands
D     dismissed, though, on a different ground than the reasons
      st~ted in the order of the CESTAT. No costs.
      Kalpana K. Tripathy                            Appeal dismissed.


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