2011 (8) TMI 960 - HC - Central Excise

Refund claim - whether the claim for refund of the CENVAT credit facilities should be made before the expiry of the period of one year from the relevant date - Rule 5 of CENVAT credit - there is no specific relevant date is prescribed in the notification No.5/2006-CE(N.T.) dated 14.03.2006 - Held that - the relevant date should be the date on which the export of the goods was made and for such goods - refund of CENVAT credit is claimed after one year from the date of export - The respondent would rely upon a judgment of the Gujarat High Court reported in (2008 (7) TMI 208 - HIGH COURT GUJARAT ) Commissioner of Central Excise and Customs Surat-I v. Swagat Synthetics - That was a case relating to Sub-Rule (13) of Rule 57F of Central Excise Rules 1944 - Therefore the order of CESTAT holding that the limitation is not applicable to the facts in question to the case has to be set aside. - Decided in favor of revenue.

Issues Involved:
1. Whether the Tribunal was correct in setting aside the order of the Commissioner (Appeals) and remanding the matter for fresh consideration.
2. Applicability of Section 11B to the refund of CENVAT credit.
3. Whether the Tribunal correctly held that the appellants are claiming refund of CENVAT credit, not the refund of duty paid.
4. Whether the Tribunal was right in holding that the claim for refund should be made on a quarterly basis for administrative convenience.
5. Applicability of the time limit specified in Notification No.5/2006-CE(NT) to the refund claims.
6. Reliance on a case dealing with erstwhile Central Excise Rules, 1944.

Detailed Analysis:

1. Tribunal's Remand for Fresh Consideration:
The Tribunal set aside the order of the Commissioner (Appeals) and remanded the matter for fresh consideration. The Tribunal directed that the assessee/respondent be given an opportunity to place relevant materials. The High Court upheld this decision, emphasizing the need for the respondent to be given a fair chance to substantiate their claims with necessary documentation.

2. Applicability of Section 11B to CENVAT Credit Refund:
The High Court examined whether Section 11B of the Central Excise Act, 1944, which pertains to the refund of duty and interest, is applicable to the refund of CENVAT credit. It was concluded that Section 11B is not directly applicable to CENVAT credit refunds. Instead, Rule 5 of the CENVAT Credit Rules, 2004, provides for such refunds, and the relevant notification issued under this rule prescribes the conditions and limitations for claiming refunds.

3. Refund of CENVAT Credit vs. Duty Paid:
The Tribunal held that the appellants are not claiming a refund of duty paid but are seeking a refund of CENVAT credit accumulated due to exports. The High Court agreed with this interpretation, distinguishing between the two types of refunds and affirming that the claim pertains to CENVAT credit.

4. Quarterly Basis for Refund Claims:
The Tribunal's view that the claim for refund on a quarterly basis is for administrative convenience and does not specify any time limit was scrutinized. The High Court noted that the relevant notification does prescribe a time limit, aligning with the period specified in Section 11B of the Central Excise Act, 1944.

5. Time Limit for Refund Claims:
The High Court emphasized that the notification under Rule 5 of the CENVAT Credit Rules, 2004, mandates that refund applications must be filed within the period specified in Section 11B. The Tribunal's decision that no period of limitation could be prescribed in the absence of a notification by the Central Government was overturned. The High Court held that the relevant date for filing the claim should be the date on which the final products are cleared for export.

6. Reliance on Previous Case Law:
The Tribunal relied on a case dealing with the erstwhile Central Excise Rules, 1944, which the High Court found not entirely relevant to the present issue. The High Court clarified that the procedural rules and notifications applicable to CENVAT credit refunds must be strictly followed, and the limitation period prescribed must be adhered to.

Conclusion:
The High Court allowed the appeals in C.M.A.Nos.2182, 2183, and 2184 of 2011, setting aside the Tribunal's final orders regarding these cases, as the claims were time-barred. However, the appeals in C.M.A.Nos.2185, 2186, and 2187 of 2011 were dismissed, confirming the Tribunal's orders for remand and fresh consideration, allowing the respondent to present necessary documentation.

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