2005 (12) TMI 443 - AT - Central Excise

Summary

Issues:
1. Refund claim of duty paid voluntarily before the issue of show cause notice.
2. Applicability of time limitation for refund claim under Section 11B of the Central Excise Act.

Analysis:

Issue 1: Refund claim of duty paid voluntarily before the issue of show cause notice

The appellants had voluntarily deposited a duty liability of Rs. 7,40,833.07 before the issuance of a show cause notice. The Tribunal set aside the penalty and redemption fine but did not order a refund of duty paid. It was held that the duty voluntarily paid before the show cause notice must be claimed by the appellants under Section 11B, as per the precedent set by the Supreme Court in the case of Mafatlal Industries Ltd. v. Union of India. The Tribunal remanded the issue back for re-examination to decide the plea of the appellants in accordance with the principles of natural justice. The Joint Commissioner found that no details were furnished by the appellants regarding the seized goods and the difference in duty quantum. The appellants were directed to file a refund claim with the proper officer for further examination under Section 11B.

Issue 2: Applicability of time limitation for refund claim under Section 11B

The appellants argued that the duty of Rs. 7,40,833.07 was paid under protest, fulfilling the requirements of Rule 233B of the Central Excise Rules, and thus, the time limit of six months for refund claim should not apply. They cited precedents to support their argument that duty deposited while pursuing appellate remedies should be considered as duty paid under protest. However, the Revenue contended that the refund claim was time-barred, as the duty was not paid under protest and the claim was not filed within the stipulated period under Section 11B(2). The lower authorities upheld the time limitation for the refund claim, stating that the duty deposited voluntarily before the show cause notice was not under protest, and thus, the claim was beyond the prescribed period. The Commissioner of Central Excise (Appeals) also affirmed that the duty payment did not meet the criteria for being considered as paid under protest, leading to the rejection of the refund claim.

In conclusion, the Tribunal's decision not to order a refund of duty paid voluntarily before the show cause notice was upheld, and the time limitation for the refund claim under Section 11B was deemed applicable. The lower authorities correctly determined the claim as time-barred due to the failure to meet the criteria for duty payment under protest and the delay in filing the refund claim within the prescribed period. The appeal was rejected based on these findings.