2016 (5) TMI 895 - AT - Central Excise

Rejection of refund claim - duty was paid twice, once from cash and again from cenvat credit - Whether suo-motu credit of ₹ 3,46,820/ taken by the appellant on 28/2/2011 was legally correct or appellant was required to file a refund claim under Sec 11B ibid - Held that - by relying on the decision of Larger Bench of the CESTAT in the case of BDH Industries Ltd. Vs. CCE (Appeals) Mumbai-I 2008 (7) TMI 78 - CESTAT MUMBAI whose decision was taken by relying upon the ratio laid by Supreme Court in the case of Mafatlal Industries Ltd Vs UOI 1996 (12) TMI 50 - SUPREME COURT OF INDIA , suo-motu credit of duty paid excess / twice can not be taken & a refund claim was required to be filed. However, as the issue was disputable & conflicting views were expressed by the court s penalty imposed upon the appellant is not justified and is set aside. Period of limitation - Whether relevant date for the purpose of calculating period of limitation under Sec 11B of the Central Excise Act 1944 should be calculated from 16/3/2012 (the date appellant paid the amount at the instance of the department) or 31/1/2011 when duty was paid twice by the appellant - Held that - by respectfully following the ratio laid down by the CESTAT Ahmedabad in the case of Neptune Industries Ltd Vs CCE Ahmedabad 2011 (12) TMI 368 - CESTAT, AHMEDABAD and Raj Petro Specialties P. Ltd Vs CCE Vapi 2009 (5) TMI 603 - CESTAT, AHMEDABAD , it is held that relevant date for filing the refund claim in the existing facts will be 16/3/2012 and accordingly refund claim was not time barred. - Decided in favour of appellant with consequential relief

Summary

Issues:
1. Whether the appellant was legally correct in taking suo-motu credit of duty paid excess twice or was required to file a refund claim under Sec 11B of the Central Excise Act 1944?
2. Whether the "relevant date" for calculating the period of limitation under Sec 11B of the Central Excise Act 1944 should be considered as the date when the duty was paid at the instance of the department or when the duty was originally paid twice by the appellant?

Analysis:

Issue 1:
The appellant contended that the duty paid on 16/3/2012 should be considered as the "relevant date" for filing a refund claim, citing relevant case laws. However, the Revenue argued that the first date of payment of duty (31/1/2011) should be considered as the "relevant date." The CESTAT held that all types of refunds must be filed under Sec 11B, and no suo-motu credit can be taken, as per the BDH Industries Ltd. case. The CESTAT also noted conflicting views but set aside the penalty imposed on the appellant as the issue was disputable.

Issue 2:
Regarding the "relevant date" for the period of limitation under Sec 11B, the appellant argued for 16/3/2012, while the Revenue supported 31/1/2011. The CESTAT referred to relevant case laws like Neptune Industries Ltd and Raj Petro Specialties P. Ltd, holding that the "relevant date" should be 16/3/2012. The CESTAT observed that the appellant had not passed on the excess duty paid to the buyer and, based on the settled proposition of law, allowed the appeals filed by the appellant.

In conclusion, the CESTAT allowed the appeals filed by the appellant, considering the "relevant date" for the refund claim as 16/3/2012 and setting aside the penalty imposed.