Apotex Judgment and Scope of Rule 14 of CCR, 2004

I beg to differ with the learned and highly respected Mr Gururaj on his view regarding the decision of the Hon'ble CESTAT on the applicability of Section 11B of the CEA to refund claims filed by exporters under Rule 5 of the CCR, 2004. With due respects to the Hon'ble CESTAT, I find it disturbing that the Bench did not find it necessary to follow the ratio laid down in the decision of the jurisdictional Karnataka High Court, in the mPortal case, which has been followed in several CESTAT decisions including, in the KPIT Cummins decision. Given the fact that, the Bench chose to follow the non-jurisdictional Madras High Court's decision in the GTN Industries case, I am sure the affected appellants would approach the Hon'ble Karnataka High Court for relief as the High Court's decision has not been followed by the Bangalore CESTAT.

Given the fact that certain other CESTAT decisions that have followed the mPortal decision rather than the GTN Industries decision, my humble view is that, the matter, at least, in so far as the applicability of Section 11B to refund claims under Rule 5 is concerned, could have been referred to a larger Bench and the larger Bench's decision could have served as a binding precedent for other CESTAT Benches.

The dispute related to the applicability of Section 11B for refund claims under Rule 5 is far from over and I am sure that the matter will go up to the Karnataka High Court (at least, in so far as appellants from Karnataka are concerned). Of course, if the Department loses in the High Court, it is bound to take the matter to the Supreme Court.

I agree with Mr Gururaj on his views on the nexus. Yet another positive aspect of this decision is that, the Bench has held that refund is available under Rule 5, in respect of 'deemed sales'.

S Sivakumar
Advocate, Bangalore

SUBRAMANI SIVAKUMAR 01/10/2014