2017 (9) TMI 340 - AT - Central Excise

Refund claim - payment of duty in their code of Mumbai - rejection of refund on the ground of time limitation - case of appellant is that limitation is not applicable to something which is not a tax but a deposit made - Held that - There were no clearances from Mumbai unit. The entire amount deposited remains to the credit of the appellant until it is utilized for the purpose of payment of duty. The refund of the amount deposited cannot be claimed under Section 11B of the Central Excise Act, as the same is not a duty but a deposit - The claim of the appellant may be considered under the provisions of the law other than Section 11B, if any, applicable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appeal against rejection of refund claim due to limitation.

Analysis:
The appellant, M/s. Vinraj Plastic Industries, appealed against the rejection of their refund claim by lower authorities. The issue arose when the appellant shifted their unit from Mumbai to Daman but continued to use their Mumbai code for clearance in Daman, resulting in duty payment in Mumbai. The refund claim was rejected solely on the ground of limitation.

The learned Counsel argued that limitation should not apply to a deposit made, not a tax, citing the decision in the case of Kansai Nerolac Paints Ltd. and the High Court of Gujarat in the case of Swastik Sanitarywares Ltd. On the other hand, the learned AR supported the impugned order.

Upon reviewing the submissions, the Tribunal found that duty was indeed paid in the Mumbai unit, which could have been claimed as a refund. Referring to the Hon'ble Apex Court's observation in the case of Mafatlal Industries Ltd., the Tribunal emphasized that all claims for refund must be made under and in accordance with Rule 11/Section 11B and no other provision or forum. The Tribunal also considered the decision of the Hon'ble High Court of Gujarat in the case of Swastik Sanitarywares Ltd., which highlighted the exhaustive nature of refund provisions and the period of limitation for making such claims.

Consequently, the Tribunal ruled that the amount deposited by the appellant, which remained to their credit until utilized for duty payment, cannot be claimed as a refund under Section 11B of the Central Excise Act as it was a deposit, not a duty. The Tribunal allowed the appellant's prayer and advised that their claim be considered under other applicable laws.

In conclusion, the Tribunal's judgment emphasized the importance of following specific refund provisions under Rule 11/Section 11B for claiming refunds and distinguished between deposits and duties for refund purposes.