2007 (11) TMI 59 - HC - Central Excise

Sec. 11B Central Excise Act provides that period of limitation is not to apply where duty is deposited under protest Incidence of duty has not been passed so retention of such amount by dept. would be non-accordance with provisions of Article of Constitution Refund allowed.

Summary

Issues:
1. Whether a refund claim can be filed after the expiry of six months from the date of payment under Section 11B of the Central Excise Act, 1944?

Analysis:
The appeal in question was filed under Section 35G of the Central Excise Act, challenging an order passed by the Customs, Excise, and Service Tax Appellate Tribunal, which allowed a refund claim made by the assessee-respondent amounting to Rs. 2,37,716. The revenue contended that a substantial question of law arises regarding the filing of a refund claim after the expiration of six months from the date of payment under Section 11B of the Act. The Tribunal's decision in favor of the assessee-respondent was based on the premise that the duty had been deposited under protest, thus falling under the second proviso of Section 11B, which exempts such cases from the limitation period. The Tribunal also considered the issue of unjust enrichment and relied on previous judgments to support its decision.

In its analysis, the High Court examined the facts of the case, noting that the assessee-respondent had challenged the revenue's decision not to allow deductions in respect of freight and transportation costs. The Tribunal's decision in favor of the assessee-respondent had attained finality, leading to the filing of a refund application. The adjudicating authority initially rejected the claim for refund citing time limitation and unjust enrichment. However, the Commissioner upheld the limitation aspect but reversed the finding on undue enrichment. The Tribunal, relying on its earlier judgment and the Supreme Court's decision in "Mafatlal Industries Ltd. v. Union of India," ruled in favor of the assessee-respondent, emphasizing that cases where duty was contested and settled were eligible for refunds. The High Court concurred with the Tribunal's reasoning, emphasizing that the duty had been deposited under protest and there was no unjust enrichment, as confirmed by the Commissioner's findings accepted by the revenue-appellant.

Ultimately, the High Court found no legal infirmity in the Tribunal's order and dismissed the appeal, stating that no substantial question of law arose for its determination. The Court highlighted that the second proviso to Section 11B exempted cases where duty was deposited under protest from the limitation period, and the absence of unjust enrichment further supported the assessee-respondent's claim for a refund. The appeal was deemed meritless and was consequently dismissed.