2016 (11) TMI 15 - AT - Central Excise

Claim of refund - Interest on delayed refund - limitation bar - Section 11BB - Price variation clause - manufacture of LPG gas cylinders, for supply to oil companies such IOCL, BPCL, HPCL - Held that - Refund of any amount paid as excise duty can be refunded subject to provisions of Section 11B of the Central Excise Act. This will require filing of refund claim within the time limit prescribed therein and observance of all other conditions. It is an admitted position in the present dispute that no order of provisional assessment has been made under Rule 9B of the erstwhile Rules. If the normal time limit of one year were to be considered under Section 11B, for refund of duty paid during the period 7/99 to 10/2000, the refund claim ought to have been filed within a period of one year. In view of the price variation clause, the assessments are to be considered as deemed provisional assessment even if the formalities of Rule 9B is not observed. The time limit prescribed in Rule 9B, in cases where assessments are provisional, starts from the date of finalisation of provisional assessments. In the present case, if the assessments are deemed to be provisional, then the time limit has to start from the date of its finalisation. It has been confirmed by the learned advocate appearing for the assessee that the adjustment and finalisation of the prices were completed by October 2001. We are of the view that the deemed provisional assessments are to be deemed as finalised by this date. The refund claim can at best be allowed to be filed within the period of limitation starting from October 2001. We are afraid that such a liberal interpretation would also not come to the aid of the assessee, inasmuch as the claim has been filed only as late as 24.8.2006. Therefore the claim is hopelessly time barred. Once the refund itself has been held to be not admissible on account of time bar under Section 11B, the question of payment of interest under Section 11BB does not arise - appeal disposed off - decided against Appellant.

Summary

Issues:
1. Refund claim time-bar under Section 11B
2. Provisional assessment based on price variation clause
3. Interest on delayed refund

Analysis:
1. The judgment pertains to two appeals, E/309/2008 and E/2398/2011, directed to be heard together by the Hon'ble High Court. The primary issue in E/309/2008 revolves around a refund claim filed by the assessee for excess duty paid on gas cylinders supplied to oil companies. The claim was rejected on grounds of time bar and unjust enrichment. The Assistant Commissioner's rejection was overturned by the Commissioner (A) based on precedents. The Revenue contended that the claim, filed in 2006 for the period 1999-2000, exceeded the one-year limit under Section 11B. The Tribunal deliberated on whether the assessments could be deemed provisional due to a price variation clause in the contracts.

2. The assessee argued that despite not following Rule 9B for provisional assessments, the price revisions post-clearance implied de facto provisional assessments. The Commissioner (A) and the assessee relied on case laws supporting this interpretation. The Revenue, however, emphasized the strict adherence to Section 11B's time limits for refund claims. The Tribunal noted the finalization of prices by October 2001 and the claim's filing in 2006, deeming it time-barred even with a liberal interpretation. Consequently, the Commissioner (A)'s decision was set aside, rejecting the refund claim in E/309/2008.

3. In the second appeal, E/2398/2011, the issue of interest on delayed refund arose. The Tribunal ruled that since the refund was deemed inadmissible due to time bar, the question of interest under Section 11BB did not apply. Both appeals were disposed of accordingly, emphasizing the importance of adhering to statutory time limits for refund claims and the implications on interest payments. The judgment highlights the significance of procedural compliance and the impact on refund eligibility and related interest obligations.

Conclusion:
The judgment underscores the criticality of adhering to statutory provisions, particularly Section 11B, concerning refund claims in excise matters. It clarifies the implications of provisional assessments, emphasizing the necessity of formalities even in the presence of price variation clauses. The decision sets a precedent for time-bound refund claims and associated interest obligations, ensuring compliance with legal requirements in excise duty matters.