2015 (1) TMI 503 - AT - Service Tax

Rejection of refund claim u/s 11B - Bar of limitation - Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 05/2006-CX (NT) dated 01.3.2006 - whether the provision of Section 11B of Central Excise Act, 1944 does not cover refund of Cenvat credit and whether Notification No. 5/2006-C.E. (N.T.) will be applicable for that purpose - Held that - While going through the judgment of Hon ble High Court of Madras in the case of Commissioner of Central Excise, Coimbatore Vs. GTN Engineering (I) Ltd. 2011 (8) TMI 960 - MADRAS HIGH COURT . It is observed that issue have been examined in detail in para 11 to para 15 as referred above clearly indicating the mind of Hon ble High Court that claim of refund has to be restricted under Section 11B of the Central Excise Act, 1944, under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 05/2006-CX (NT). Hon ble High Court also distinguished judgement of Madhya Pradesh High Court at Indore reported in 2008 (10) TMI 246 - HIGH COURT OF MADHYA PRADESH AT INDORE in the case of STI India Ltd. Vs. Commissioner of Customs and Central Excise, Indore. - case is clearly established against the appellants - Decided against assessee.

Summary

Issues:
- Whether the provision of Section 11B of the Central Excise Act, 1944 covers the refund of Cenvat credit.
- Applicability of Notification No. 5/2006-C.E. (N.T.) for the refund of Cenvat credit.

Analysis:

Issue 1:
The Appellant appealed against the rejection of their refund claim under Section 11B of the Central Excise Act, 1944, and Rule 5 of the Cenvat Credit Rules, 2004, due to being time-barred. The Appellant, a 100% E.O.U. engaged in the export of slate stone and sand stone, filed a refund claim for unutilized Cenvat Credit on input services from January 2010 to March 2010. The claim was reduced after scrutiny, and a portion was deemed time-barred. The Adjudicating Authority rejected the refund claim of a specific amount as time-barred under Section 11B and Rule 5, read with Notification No. 05/2006-CX (NT) dated 01.3.2006.

Issue 2:
The Appellant argued that the refund claim was not of duty paid but of Cenvat credit already taken, citing precedents like GTN Engineering (I) Ltd. and Swagat Synthatic Ltd., where accumulated credit was considered akin to credit in PLA, and the claim was not deemed time-barred. However, the Department cited the Madras High Court's judgment in Commissioner of Central Excise, Coimbatore Vs. GTN Engineering (I) Ltd., which held that the time limit under Section 11B was applicable. The High Court's ruling emphasized that the relevant date for the one-year period under Section 11B should be determined by applying Rule 5 of the Cenvat Credit Rules, 2004, based on the date of export of goods.

Conclusion:
The Tribunal examined the detailed analysis provided by the High Court of Madras, which clarified that the refund claim must be restricted under Section 11B of the Central Excise Act, 1944, read with Rule 5 of the Cenvat Credit Rules, 2004, and Notification No. 05/2006-CX (NT). The Tribunal dismissed the appeal, upholding the rejection of the refund claim as time-barred based on the applicable legal provisions and precedents cited.