2017 (1) TMI 711 - AT - Central Excise

Refund claim - Rule 6 (3)(a)(viii)(4) of the Cenvat Credit Rules, 2004 - Section 11B of the Central Excise Rules, 1944 - time bar - Held that - it is not the case that the provisions of the Central Excise Rules are unconstitutional. In other words, it is a case of the tax collected by the authorities under the Rules by misconstruction or wrong interpretation of the provisions of the Act and Rules and therefore, the claim of refund of amount arises under the provisions of the Act. Hence, the Commr. (Appeals) rightly observed that the refund claim would fall within the purview of Section 11B of the Central Excise Rules, 1944. Therefore, the lower authorities rightly rejected the refund claim as time barred - appeal rejected - decided against Appellant.

Summary

Issues:
- Interpretation of Rule 6 of the Cenvat Credit Rules, 2004 for refund claim.
- Applicability of Section 11B of the Central Excise Act, 1944 to the refund claim.
- Consideration of legal precedents in determining the nature of the refund claim.
- Rejection of the refund claim as time-barred.

Interpretation of Rule 6 of the Cenvat Credit Rules, 2004 for refund claim:
The appellant availed cenvat credit on inputs for manufacturing both dutiable and exempted goods, paying 10% of the value of exempted goods at clearance. A refund claim was filed, contending excess payment due to not reversing cenvat credit used in exempted goods. The Adjudicating Authority rejected the claim, later remanded, and partially sanctioned it. The Commissioner (Appeals) upheld the rejection, emphasizing the 10% deposit as per Rule 6, distinct from duty under Section 11B of the Act, leading to the claim's treatment under Section 11B.

Applicability of Section 11B of the Central Excise Act, 1944 to the refund claim:
The Commissioner (Appeals) held that refund claims, barring unconstitutional levies, fall under Section 11B or Section 27 of the Customs Act. The appellant argued the deposit was not duty, thus outside Section 11B, citing legal precedents. However, the Revenue contended the claim's nature aligns with Section 11B, following the Supreme Court's decision on refund criteria under Article 265 of the Constitution.

Consideration of legal precedents in determining the nature of the refund claim:
The appellant referenced judgments supporting their view that the amount, being a mistaken payment, does not fit Section 11B criteria. The Revenue reiterated the Commissioner's findings, aligning with the Supreme Court's distinction between unconstitutional levies and illegal collections under the Act, placing this case in the latter category. The Tribunal concurred, rejecting the appeal and upholding the lower authorities' decision on the time-barred refund claim.

Rejection of the refund claim as time-barred:
The Tribunal concluded that the refund claim, falling under the Act's provisions due to misinterpretation of rules, rightly faced rejection as time-barred. Despite the appellant's reliance on various legal decisions, the Tribunal found no merit in the appeal, dismissing it based on the Commissioner's correct classification of the claim under Section 11B. The judgment was pronounced on 10.01.2017 by Shri P. K. Choudhary, the Judicial Member.