2011 (12) TMI 442 - AT - Central Excise

Denial of refund claim - Original authority allowed refund claim - Lower appellate authority rejected refund claim - Held that - lower appellate authority has opined that refund of excess payment of duty can only be made when an assessee opts for provisional assessment. This cannot be a valid ground for rejecting at refund claim which has been filed within time limit prescribed under the law for seeking refund of duty paid in excess of the amount due. Had the appellants opted for provisional assessment, they could have applied for refund of the entire amount of duty paid in excess. For the fact that they had not opted for provisional assessment, they have only claimed refund of the limited amount in respect of which the claims are not time-barred. I am of the view that the original authority had rightly sanctioned the refund claimed by the appellants within time limit prescribed under the law - Decided in favor of assessee.

Summary

Issues: Refund of excess duty paid, Provisional assessment, Time limit for refund claim

Refund of Excess Duty Paid:
The case involved the transfer of goods to a depot where the department requested duty payment under Rule 7 of the Central Excise Valuation Rules. Upon calculation, it was discovered that some duty was short-paid and some was overpaid by the appellants. The appellants filed a refund claim for the excess duty paid within the prescribed time limit. The lower appellate authority set aside the refund order, stating that refund of excess duty can only be made if an assessee opts for provisional assessment. However, the original authority had sanctioned the refund within the legal time limit. The judge found that not opting for provisional assessment did not invalidate the refund claim, and upheld the original authority's decision to grant the refund. The impugned Order-in-Appeal was set aside, and the Order-in-Original was restored, allowing the appeal in favor of the appellants.

Provisional Assessment:
The lower appellate authority had incorrectly interpreted that refund of excess duty could only be granted if an assessee opted for provisional assessment. However, the judge clarified that the lack of opting for provisional assessment did not bar the appellants from claiming a refund of the excess duty paid within the specified time frame. The judge emphasized that the appellants had the right to seek a refund of duty paid in excess of the amount due, even without opting for provisional assessment.

Time Limit for Refund Claim:
The judge highlighted that the appellants had filed the refund claim within the time limit prescribed by law for seeking a refund of overpaid duty. The original authority had rightly approved the refund within this legal timeframe. The judge's decision to set aside the impugned Order-in-Appeal and restore the Order-in-Original was based on the appellants' adherence to the statutory time limit for claiming the refund. The ruling emphasized the importance of complying with the legal provisions regarding the time limit for refund claims in excise duty matters.