2008 (11) TMI 226 - AT - Central Excise

Refund refund of per deposit period of limitation - The appellants pre-deposited an amount of Rs. 50, 000/- ordered by the Commissioner (A). However in the appeal before the Commissioner (A) an order was passed in favour of the appellant. Consequently they were entitled for refund of the pre-deposit made in the year 2001. The appellants made a claim for refund of the pre-deposit only in the year 2007 held that - where pre-deposits are made under Section 35F of the Central Excise Act the decision goes in favour of the appellant and the pre-deposited amount should be refunded suo motu by the department without much delay. In any case there is no justification for rejecting refund claim by applying the general limitation act. As the amount claimed as refund is a pre-deposit the limitation under Section 11B will not be applicable in terms of the decided case-laws cited by the learned counsel refund allowed.

Summary

Issues:
Refund claim of pre-deposit made under Section 35F of the Central Excise Act - Application of law of limitation - Applicability of Section 11B - Jurisdiction of Appellate Tribunal in applying general law of limitation.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore involved a dispute regarding the refund claim of a pre-deposit made by the appellants in the year 2001, which was ordered by the Commissioner of Central Excise (Appeals-II), Bangalore. The issue at hand was the delay in claiming the refund, as the appellants only made the claim in 2007, resulting in a nearly six-year delay. The Original Authority rejected the refund claim citing the law of limitation, a decision which was upheld by the Commissioner (A), leading the appellants to seek relief from the Tribunal.

The learned advocate for the appellant referred to a Board's Circular stating that for refund of pre-deposit, no formal claim is required, and a mere letter would suffice. Additionally, reliance was placed on a Tribunal decision which held that the Tribunal is not competent to apply the general law of limitation for refund claims. Furthermore, it was argued that since the amount in question was a deposit, Section 11B, which deals with the limitation for refund claims, was not applicable. Reference was also made to a Supreme Court decision emphasizing the obligation of public bodies to return erroneously recovered money without being bound by a law of limitation.

In the Tribunal's analysis, it was highlighted that when pre-deposits are made under Section 35F of the Central Excise Act, the decision typically favors the appellant, and the pre-deposited amount should be refunded by the department without delay. The Tribunal concluded that there was no justification for rejecting the refund claim based on the general limitation act. Considering the nature of the amount claimed as a pre-deposit, the Tribunal ruled that the limitation under Section 11B would not be applicable, as supported by various case laws cited by the appellant's counsel. Consequently, the Tribunal ordered the refund claim of the pre-deposit to be processed without further delay, allowing the appeal in favor of the appellants.