2015 (11) TMI 696 - AT - Central Excise

Refund - Bar of limitation - whether amount deposited during the course of investigation should be considered as duty of excise, for which the provisions of section 11B of the Central Excise Act 1944 can be considered for the purpose of computation of the limitation period - Held that - If the duty is paid with regard to the removal of excisable goods from the factory, then obviously the provisions of section 11B of the Act will have the application, since the said section provides for filing refund application claiming refund of any duty of excise and interest, if any, paid on such duty. Since the amount paid during the course of investigation conducted by the preventive wing, which is not attributable to clearance of finished product from the factory, the amount deposited will be construed as mere deposit and not to be considered as payment of duty. Hence, in absence of non-consideration of such deposit as payment of duty of excise, in my considered view, for claiming refund of such amount, the provisions of section 11B will have no application. I also find that the refund claim in the present case has not been lodged under section 11B of the Central Excise Act. Rather, the claim application has been filed before the appropriate authority in a plain letter-form without mentioning therein any statutory provisions under which the claim is lodged. Thus, the authorities below have erroneously assumed that the claim being filed under section 11B, time limit prescribed therein should have the application and the claim having been lodged beyond one year from the relevant date, is barred by limitation of time. Such views expressed by the authority below are not in conformity with the statutory provisions. - amount not paid towards excise duty but only by way of deposit during investigation should not be considered as payment of duty; and as such, the provisions of section 11B of the Central Excise Act will have no application for refunding such amount. - impugned order dismissing the appeal on the ground of limitation is not sustainable and accordingly, the same is set aside - Decided in favour of assessee.

Summary

Issues:
Rejection of refund application on the ground of limitation.

Analysis:
The case involves the rejection of a refund application based on limitation. The appellant's factory was visited by Preventive Officials of the Central Excise Department, leading to the appellant making various payments and deposits. The appellant challenged the subsequent Order-in-Original and won the appeal, following which a refund claim was lodged. However, the refund application was rejected by the Asstt. Commissioner of Central Excise on the grounds of limitation, as it was filed beyond one year from the relevant date of the appeal decision. The main contention was whether the amount deposited during the investigation should be considered as duty of excise, affecting the application of section 11B of the Central Excise Act for the limitation period calculation.

The appellant argued that the refund claim was not filed under section 11B and that the amount paid during the investigation should not be considered as excise duty, hence the limitation period under section 11B does not apply. The Revenue countered, stating that the refund application was filed beyond the one-year limit from the relevant date, making it time-barred. The Tribunal considered whether the amount paid during investigation should be deemed as excise duty, thus affecting the application of section 11B for limitation calculation.

The Tribunal observed that the amount paid during investigation, not related to the clearance of finished products, should be seen as a deposit and not excise duty payment. As such, the provisions of section 11B do not apply for claiming a refund of such an amount. The refund claim was not filed under section 11B, and the authorities erred in assuming so. Citing relevant judgments, the Tribunal highlighted that amounts paid as deposits during investigations should not be considered as duty of excise, thus not falling under section 11B for refund purposes.

The Tribunal found that the impugned order dismissing the appeal on the limitation ground was not sustainable. Relying on settled legal principles and distinguishing previous judgments related to refund of excise duty, the Tribunal allowed the appeal in favor of the appellant, setting aside the impugned order and granting consequential relief as per the law.