2017 (7) TMI 288 - AT - Central Excise

Doctrine of merger - refund claim - Payment of duty through CENVAT account - required balance was not available on due dates in CENVAT account - Held that - in view of the Principles of Doctrine of Merger no refund of Cenvat Credit, as ordinarily debited for payment of duty wrongly, arises. Thus, the refund of such amount of ₹ 10,30,893/- have been rightly rejected by the Adjudicating Authority - appeal allowed - decided in favor of Revenue.

Summary

Issues:
1. Refund claim rejection on grounds of being time-barred
2. Interpretation of relevant date under Section 11 B of the Act for refund claims
3. Doctrine of Merger in the context of Cenvat account debits and duty payment

Issue 1: Refund claim rejection on grounds of being time-barred
The respondent sought a refund of duty and penalty amounts totaling &8377; 10,30,893/- deposited via TR6 challans in January 2005. The Adjudicating Authority rejected the refund claim citing it as time-barred under Section 11 B of the Act. The Authority considered the date of the original order in 2002 as relevant, deeming the refund claim filed in 2005 as beyond the statutory time limit.

Issue 2: Interpretation of relevant date under Section 11 B of the Act for refund claims
The Commissioner (Appeals) differed, holding that the relevant date for the refund claim should be the Tribunal's order date in 2004. The Revenue, however, contended that the relevant date should align with the payment of duty as per the Act's provisions. The dispute centered on whether the refund claim arose solely due to the Tribunal's order or was linked to the duty wrongly debited in the Cenvat account.

Issue 3: Doctrine of Merger in the context of Cenvat account debits and duty payment
The Tribunal, after an ex-parte hearing due to the respondent's absence, analyzed the Doctrine of Merger and its application to the refund claim. It noted that no refund of Cenvat Credit, used for duty payment, should be granted as it was debited erroneously. Consequently, the Tribunal set aside the Order-in-Appeal, upholding the rejection of the refund claim amounting to &8377; 10,30,893/-. The decision was based on the Doctrine of Merger principles and the circumstances surrounding the duty payment from the Cenvat account.

In conclusion, the Tribunal ruled in favor of the Revenue, rejecting the refund claim based on the Doctrine of Merger and the erroneous debiting of the Cenvat account for duty payment. The decision highlighted the importance of aligning refund claims with statutory timelines and the legal principles governing duty payments and Cenvat accounts.