2010 (12) TMI 88 - AT - Central Excise

Refund - period of limitation - unjust enrichment - duty paid at the instance of department through cenvat credit - Held that - Apparently, it was a voluntarily payment without protest. - the cause of action for their refund claim dated 16/08/2007 was the show-cause notice dated 02/08/2007 issued by the department for recovery of differential duty on DTA clearances of the month of July 2006. It would mean that, had the show-cause notice not been issued, the refund claim would not have been filed. The only cause of action for refund claim can be payment of duty despite non-liability for payment of duty. Section 11B of the Central Excise Act provides complete machinery for claiming refund of an amount of Central Excise duty on this ground. The provision clearly states that any such claim should be filed within a period of one year from the relevant date. It is not in dispute that the payment was made by way of debit in CENVAT account. Therefore, it is not open to the respondent to argue that what they paid on 24/07/2006 was not an amount of duty / education cess but a mere deposit.

Summary

Issues:
1. Refund claim filed by the assessee for duty paid on DTA clearances.
2. Time-barred refund claim and unjust enrichment.

Analysis:
1. The appeal involved a refund claim by the assessee, a 100% Export-Oriented Unit, for duty paid on clearances to the Domestic Tariff Area. The dispute arose when the Superintendent of Central Excise pointed out an error in the quantification of duty paid by the assessee, leading to a demand for a differential amount of duty and Education Cess. The assessee paid the differential amount voluntarily and later filed a refund claim, which was rejected by the Assistant Commissioner as time-barred. The Commissioner (Appeals) reversed this decision, leading to the Revenue's present appeal.

2. The main argument raised by the learned SDR was that the refund claim was filed beyond the one-year limitation period, the payment was not under protest, and thus, the claim should be time-barred. Reference was made to a previous case law to support this position. On the contrary, the respondent's consultant argued that the payment should be considered under protest or as a deposit, making the refund claim valid. Case laws were cited to justify this stance, emphasizing that the payment was made based on advice and not voluntarily.

3. The Tribunal analyzed the circumstances and concluded that the payment made by the respondent was not under protest. The Superintendent's letter demanding the differential duty was specific and appealable, yet the respondent did not challenge it. The Tribunal dismissed the argument that the payment should be treated as a deposit, as it was clearly made towards duty and Education Cess. Hence, the time-bar provision of Section 11B of the Central Excise Act applied, rendering the refund claim beyond the limitation period and justifying the rejection by the original authority.

4. The Tribunal emphasized that in taxation matters, statutory provisions govern refund claims, not the doctrine of cause of action. Therefore, the Commissioner (Appeals) decision based on cause of action was deemed inapplicable in this context. Consequently, the Tribunal set aside the appellate Commissioner's decision and allowed the Revenue's appeal, upholding the rejection of the refund claim as time-barred.