2014 (3) TMI 945 - AT - Service Tax

Denial of refund claim - Refund on monthly basis as per the provisions contained in Notification No.5/2006-C.E.(N.T.) dt. 14.03.2006 and refund claims for the period April 2007 & May 2007 - Held that - It is evident from the above provisions that refund claims under this notification are required to be filed once in a quarter. However, a proviso is also existing that is case of EOU such refund claims may be submitted for each calendar month. The word used in the relevant proviso is may and not shall which means that EOU s are given an additional facility that such refund claims could be filed on monthly basis. But such a proviso does not exclude EOU s from the fact that quarterly refund claims under the notification cannot be filed by them. Commr.(A) order to that extent is required to be set aside. Whether non filing of monthly refunds will make such refund claims time barred under Section 11B of the Central Excise Act, 1944 - Held that - Commr.(A) has not discussed this aspect at all and has only held that refund filed by the appellant is time barred. It is observed from the main body of Notification No.5/2006-C.E.(N.T.) dt. 14.03.2006 that the same is issued under Rule 5 of the Cenvat Credit Rules, 2004 and does not link this refund procedure in any way to the provisions of relevant date under Section 11B of the Central Excise Act, 1944. No time limit has been prescribed in this notification also as to within which time the refund claims (monthly basis or quarterly basis) are required to be filed. In view of the above and the case laws relied upon by the appellant, it has to be held that time limit prescribed under Section 11B of the Central Excise Act, 1944 will not be applicable to the refund claims filed under Notification No.5/2006-C.E.(N.T.) dt. 14.03.2006 which is issued under Rule 5 of the Cenvat Credit Rules, 2004 - Decided in favour of assessee.

Summary

Issues:
1. Obligation to file refund claims on a monthly or quarterly basis under Notification No.5/2006-C.E.(N.T.) dt. 14.03.2006.
2. Applicability of time limit under Section 11B of the Central Excise Act, 1944 to refund claims filed under the notification.

Analysis:

Issue 1:
The appellant contested the obligation to file refund claims only on a quarterly basis under Notification No.5/2006-C.E.(N.T.) dt. 14.03.2006. The appellant argued that the notification allowed for monthly filing of refund claims as an additional facility for a 100% Export Oriented Unit (EOU). The Tribunal noted that while the general requirement was to file claims once in a quarter, the proviso allowed EOUs to submit claims on a monthly basis, using the term "may" instead of "shall." This indicated that EOUs had the option to file monthly claims but were not excluded from filing quarterly claims. Therefore, the Tribunal set aside the order of the first appellate authority that insisted on monthly filing for the appellant.

Issue 2:
The second issue revolved around whether the non-filing of monthly refunds would render the claims time-barred under Section 11B of the Central Excise Act, 1944. The Tribunal observed that the notification under consideration, No.5/2006-C.E.(N.T.) dt. 14.03.2006, issued under Rule 5 of the Cenvat Credit Rules, 2004, did not specify any time limit for filing refund claims, either on a monthly or quarterly basis. Additionally, the notification did not link the refund procedure to the provisions of Section 11B of the Central Excise Act, 1944. Citing relevant case laws, the Tribunal held that the time limit prescribed under Section 11B was not applicable to the refund claims filed under the said notification. Consequently, the Tribunal allowed the appeal by setting aside the order of the first appellate authority that deemed the appellant's refund claims as time-barred.

In conclusion, the Tribunal ruled in favor of the appellant, clarifying the obligations regarding the filing frequency of refund claims under Notification No.5/2006-C.E.(N.T.) dt. 14.03.2006 and establishing that the time limit under Section 11B of the Central Excise Act, 1944 did not apply to the specific refund claims governed by the notification.