2016 (12) TMI 1120 - AT - Central Excise

Default in payment of duty - Rule 8(3A) - debarring the assessee from using Cenvat credit for making payment of excise duty for a period of two months - Time limitation - Held that - it stands held in favour of the assessee that they will be entitled to use Cenvat credit during the period of two months following the default during which the Revenue had passed orders debarring them from using this Cenvat credit. Consequently, I find that this issue already stands settled in favour of the assessee. Consequent upon this fact, refund claim stands filed before the Assistant Commissioner which he rejected on grounds of time bar vide his order dated 10.10.2006, observing that the refund will be eligible on merits. However, from the facts outlined above, it is clear that the refund has also been decided in favour of the assessee on merits vide CESTAT order dated 6.7.2011 - Appeal dismissed - decided in favor of the assessee.

Summary

Issues: Default in payment of excise duty, utilization of Cenvat credit, rejection of refund claim on time-bar, eligibility of refund on merits.

Analysis:
1. The appeal was filed by Revenue against an order debarring the assessee from using Cenvat credit for payment of excise duty for two months due to default in duty payment. The department later ordered the duty paid using Cenvat credit to be debited to PLA. The CESTAT held that the assessee was entitled to use Cenvat credit even during the period of debarment and set aside the order demanding payment from PLA but directed payment of interest for the two months.

2. Following the CESTAT's decision, the assessee filed a refund claim for an amount paid in cash due to the department's order to pay duty without using Cenvat credit. The Assistant Commissioner rejected the refund claim on the grounds of being time-barred, despite acknowledging its eligibility on merits. The assessee's appeal against this rejection is pending before the High Court.

3. The Revenue appealed against the Assistant Commissioner's observation that the refund would be eligible on merit. The Commissioner (Appeals) did not accept the Revenue's appeal, leading to the present appeal before the Tribunal. The Tribunal found in favor of the assessee regarding the use of Cenvat credit during the debarment period, rendering the Revenue's appeal infructuous.

4. The Tribunal concluded that the current appeal before it was unnecessary as the issue of refund eligibility was pending before the High Court. Therefore, the Revenue's appeal was dismissed. The matter remains unresolved pending the High Court's decision on the refund claim rejection based on time-bar.