2016 (6) TMI 153 - AT - Central Excise

Refund claim - Period of limitation - claim was filed on 29.07.2004 which was returned on the ground of pre-mature inasmuch as investigation about the valuation work was still going on, accordingly, appellant resubmitted their claim on 28.10.2005, after the completion of the investigation - Held that - there is no date available on record with regard to completion of the investigation. Otherwise also we note that when an assessee deposits the amount by making a debit entry in their PLA account during the course of investigation, when some dispute on the valuation is going on, such debit has to be held as deposit and not as duty. In any case the assessee has no legal obligation to make a deposit of said amount during the pendency of the investigation which dispute ultimately got resolved in their favour. As such application filed by the respondent on 29.07.2004 in respect of the deposit made by them on 22.03.2004, is required to be taken into consideration for the purpose of limitation. Inasmuch as the same was within the period of limitation, we agree with the views of the Commissioner (Appeals). Unjust enrichment - deposit was made by the appellant as a lumpsum amount by making debit entry in their PLA account without raising any supplementary invoice or any other document - Held that - if no invoice was ever raised by the respondent, the question of recovery of the said amount from any other person does not arise. Further, the Commissioner (Appeals) has also observed that the goods were cleared to their sister unit who has not availed any cenvat credit of the same. This fact reflect upon the fact that no invoice was raised, nor was any amount recovered from the customer and no credit of the same was availed. In such a scenario the appellate authority was right that refund claim was not hit by unjust enrichment. Payment of interest on account of delay in payment of refund amount - original claim filed on 29.07.2004 in terms of the provisions to Section 11BB of the Act - Held that - it is found that there was no order on the valuation and it is during the investigation itself , the valuation was found in favour of the assessee. Otherwise also, the assessee was under no legal obligation to make the deposit during the investigation. As such we agree with the order passed by the ld. Commissioner (Appeals) that having filed the refund application on 29.07.2004, the respondent would be entitled to the interest. Therefore, no reason found to interfere in the order of the Commissioner (Appeals). - Decided against the revenue

Summary

Issues:
1. Bar of limitation on the refund claim.
2. Unjust enrichment regarding the refund claim.
3. Entitlement to interest on the refund amount.

Analysis:
1. Bar of Limitation: The case involved a dispute over a refund claim filed by the respondent, which was initially rejected by the Revenue on the grounds of being premature. The appellant had debited the duty in their PLA account on a specific date and filed the claim within the statutory period. The Tribunal noted that the deposit made during the investigation, in the absence of a legal obligation, should be considered a deposit and not a duty payment. As the claim was within the limitation period, it was upheld, concurring with the Commissioner (Appeals).

2. Unjust Enrichment: The Tribunal examined the issue of unjust enrichment concerning the refund claim. It was observed that the duty payment was made through a lump sum debit entry in the PLA account without any supplementary invoice. Since no invoice was raised, there was no question of recovering the amount from any other entity. Additionally, the goods were cleared to the respondent's sister unit without availing any cenvat credit, indicating no recovery or credit availed. Consequently, the refund claim was deemed not to be impacted by unjust enrichment, aligning with the appellate authority's decision.

3. Entitlement to Interest: The Revenue contested the direction to pay interest to the respondent for the delay in refund payment, arguing that interest should be calculated from a later date. However, the Tribunal found no basis for the Revenue's claim, as there was no specific order triggering the refund claim apart from the investigation's outcome favoring the assessee. Given that the deposit was not obligatory during the investigation and the refund application was timely filed, the Tribunal upheld the Commissioner (Appeals)'s decision to grant interest as per Section 11BB of the Act.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the Commissioner (Appeals)'s order. The decision highlighted the acceptance of the refund claim within the limitation period, the absence of unjust enrichment due to the payment method, and the entitlement to interest for the delayed refund payment.