2013 (5) TMI 599 - AT - Central Excise

Refund claim rejected as time bared - amount deposited by the appellant during the investigation - Held that - An amount of Rs.1,00,000/- deposited by the appellant even under panchanama cannot be considered as a duty deposited worked out by the Central Excise Officers. The said amount can be at the most an amount deposited by the appellant to pursue his legal rights to the show cause notice and being heard by the higher judicial for on the issue. Judgment of Shree Ram Food Industries (2002 (9) TMI 646 - GUJARAT HIGH COURT) very specifically dealt with this point that payment made by an assessee in pursuant to the direction of the lower authorities is not a voluntary payment and to be treated as a payment under protest - the amount deposited by the appellant during the investigation can never be construed as a duty as the amount which has been for which the show cause notice was issued clearly indicates that the amount, deposited needs to be appropriated against the duty liability if any, will indicate that it is a deposit. In favour of assessee.

Summary

Issues:
Refund claim under Section 11B of the Central Excise Act 1944 time-barred due to late filing after a favorable judgment.

Analysis:
The appeal was filed against the rejection of a refund claim for duty paid by the appellant under Section 11B of the Central Excise Act 1944. The refund claim was based on a CESTAT order dated 4.08.2009, but it was rejected as untimely since it was filed on 23.08.2010, beyond the one-year limit from the date of the judgment. The appellant argued that the amount deposited was not duty but a pre-deposit during investigation, citing relevant case laws like Shree Ram Food Industries and decisions of the Tribunal in similar cases.

The first appellate authority upheld the original order, considering the deposited amount as duty. However, the Tribunal analyzed the facts and found that the amount of Rs.1,00,000/- deposited by the appellant was not duty but a deposit made to pursue legal rights during investigation. The Tribunal disagreed with the application of Section 11B and the definition of the relevant date, stating that the amount sought as a refund was not a duty refundable due to judgment but a deposit made during investigation, as supported by precedents such as Motorala India Pvt. Ltd. and Toyota Kirloskar Auto Parts Pvt. Ltd.

Moreover, the Tribunal referred to the judgment of the Hon'ble High Court of Gujarat in Shree Ram Food Industries, emphasizing that payments made by an assessee under authorities' direction are not voluntary but under protest. The Tribunal distinguished the case from precedents cited by the Departmental Representative, highlighting that the deposited amount in this case could not be considered duty, as it was meant to be appropriated against any potential duty liability indicated in the show cause notice.

Consequently, the Tribunal set aside the impugned order, allowing the appeal with consequential relief. The decision clarified that the refund claim was wrongly rejected, emphasizing the distinction between duty and deposits made during investigation, ultimately ruling in favor of the appellant.