2023 (7) TMI 1308 - AT - Central Excise

Refund claim of duty paid under protest - rejection of refund claim on the ground that claim was barred by limitation - HELD THAT - There is no dispute to the fact that it is not the appellant who at their own sou-moto paid the excise duty on the other charges. The said duty was deposited on the behest of department. The matter was further agitated by the appellant of their other unit on merit hence the issue on merit attained finality in favour of the appellant vide Tribunal s order dated 29.09.2011. Firstly the duty was deposited on the behest of department and it is in the nature of payment of duty under protest for this reason, time limit of one year prescribed under Section 11B is not applicable in the facts of this case. Secondly, the issue on merit whether the other charges are liable for duty has been decided by this Tribunal vide its order dated 29.09.2011. The appellant s refund rejected by lower authorities on the ground of limitation is not sustainable. The sanctioning authority is at liberty to ascertain other aspects of unjust-enrichment, duty payment aspect etc. while sanctioning the refund - appeal allowed.

Summary

Issues involved:
The issues in the judgment involve the inclusion of State Sales Tax in the assessable value for excise duty payment and the refund claim of duty paid under protest being rejected on the ground of limitation.

State Sales Tax Inclusion Issue:
The appellant cleared warehoused goods by paying excise duty and included State Sales Tax paid to the State Government under the head of 'Other Charges'. The audit raised an objection, leading the appellant to pay a significant amount under protest. The Adjudicating Authority demanded interest on this amount, which was later set aside by the Commissioner (Appeals) and upheld by the Tribunal. The Tribunal found that the duty was paid under protest at the behest of the department and that the issue on merit had been settled in favor of the appellant in a previous order. As the duty was paid under protest and the issue on merit was finalized in favor of the appellant, the one-year time limit under Section 11B did not apply. The Tribunal allowed the appeal, stating that the refund claim was not time-barred and should be considered without limitation.

Refund Claim Issue:
The appellant filed a refund claim for duty paid under protest, which was rejected on the grounds of limitation by the Deputy Commissioner and Commissioner (Appeals). The appellant argued that since the amount was not voluntarily deposited but paid at the behest of the department, it should be considered as duty paid under protest, making the limitation under Section 11B inapplicable. They contended that the issue on merit had been settled in their favor in a previous Tribunal order, thus the one-year period should be calculated from that date. The Tribunal agreed with the appellant, stating that the duty was paid under protest and the issue on merit had been conclusively decided in their favor, rendering the refund claim not time-barred. The Tribunal allowed the appeal, directing the sanctioning authority to consider other aspects while granting the refund.