On November 29, the Supreme Court's division bench ruled that when filing a claim for duty rebate under Rule 18 of the Central Excise Rules, 2002, the period of limitation prescribed in Section 11B of the Central Excise Act, 1944 must be applied and applicable. The bench, which included Justices MR Shah and MM Sundresh, upheld the Bombay High Court's decision in Everest Flavours Ltd. v. Union of India, 2012 (282) ELT 481, and overruled contrary decisions by the Madras High Court, Allahabad High Court, Punjab & Haryana High Court, and Rajasthan High Court.

"Merely because in Rule 18 of the 2002 Rules, which is an enabling provision for grant of rebate of duty, there is no reference to Section 11B of the Act and/or in the notification dated 6.9.2004 issued in exercise of powers conferred by Rule 18, there is no reference to the applicability of Section 11B of the Act, it cannot be said that the provision contained in the parent statute, namely, Section 11B of the Act shall not be applicable, which otherwise as observed hereinabove shall be applicable in respect of the claim of rebate of duty."

The court noted that a subordinate statute cannot be interpreted in such a way that the parent statute becomes otiose or nugatory.

"The subordinate legislation cannot override the parent statute. Subordinate legislation can always be in aid of the parent statute. At the cost of repetition, it is observed that subordinate legislation cannot override the parent statute. Subordinate legislation which is in aid of the parent statute has to be read in harmony with the parent statute. Subordinate legislation cannot be interpreted in such a manner that parent statute may become otiose or nugatory."

In this case, the Karnataka High Court upheld the order of the Deputy Commissioner, Large Tax Payer Unit, Bengaluru, rejecting Sansera Engineering Limited's claim for rebate on the grounds that the claim was barred by the time/limitation prescribed under Section 11B of the Central Excise Act, 1944.

The question before the Supreme Court was whether the claim for duty rebate provided under Rule 18 of the Central Excise Rules, 2002, and the period of limitation prescribed under Section 11B of the Central Excise Act, 1994, would be applicable or not.

Case Title: Sansera Engineering Limited vs Deputy Commissioner, Large Tax Payer Unit, Bengaluru

Citation: CA 8717 OF 2022

Link: https://main.sci.gov.in/supremecourt/2022/1918/1918_2022_5_1502_40168_Judgement_29-Nov-2022.pdf