2010 (9) TMI 325 - AT - Central Excise

Refund limitation - pending finalisation of the show-cause notice - lower appellate authority held that the payment has to be treated as pre-deposit in respect of which time-limit provided under Section 11B of the Central Excise Act not attracted order upheld sanctioning the refund claim and reject the appeal of the Revenue

Summary

Issues:
1. Exemption under Notification No. 60/88-C.E. for newsprint clearance without entitlement certificate.
2. Recovery of duty on newsprint cleared without payment.
3. Rejection of refund claim based on unjust enrichment.
4. Time-bar limitation under Section 11B of the Central Excise Act for refund claim.

Analysis:

1. The assessees, engaged in the manufacture of 'paper' and 'paper boards', cleared newsprint during Apr. '95 to Aug. '95 under an exemption from duty, subject to producing an entitlement certificate from the Registrar of Newspapers in India. Two show-cause notices were issued for newsprint cleared without the required certificate. The Assistant Commissioner directed payment pending adjudication, leading to a partial confirmation of duty demand by the Assistant Commissioner and subsequent orders by the Commissioner (Appeals) dropping certain demands.

2. A claim for refund of Rs. 36,022/- was initially rejected on the grounds of unjust enrichment. However, the Commissioner (Appeals) set aside this rejection, instructing the assessees to provide evidence that duty was not collected from their buyers, subsequently directing the Assistant Commissioner to verify and sanction the refund. Following this, a claim for refund of Rs. 87,727/- was filed, which was rejected as time-barred under Section 11B of the Central Excise Act.

3. The Commissioner (Appeals) determined that the time limitation under Section 11B was not applicable to the refund amount, considering it as a pre-deposit during the pendency of the show-cause notices from 1995. The Tribunal upheld this decision, emphasizing that the payment made by the assessees during the notice period should be treated as a pre-deposit, exempt from the time-limit provision under Section 11B, thereby sanctioning the refund claim and dismissing the Revenue's appeal.

4. Additionally, a cross objection by the respondents was dismissed as it was deemed to be a response to the Revenue's appeal. The Tribunal pronounced the operative part of the order on 15-9-2010, finalizing the decision on the issues raised in the case.