2017 (10) TMI 887 - AT - Central Excise

Refund claim - Section 11B of the Central Excise Act - rejection on the ground that they have deposited ₹ 10,00,000/- towards liability of duty but they have not debited any amount from their PLA account - Held that - An amount of ₹ 10,00,000/- deposited through GAR-7 challan is only towards the duty and not for anything else and cannot be said that the amount paid through GAR-7 is not towards excise duty but for something else. It is settled position that any amount which is refundable the only provision applicable is Section 11B of the Central Excise Act - the refund cannot be denied only on the ground that the amount deposited through GAR-7 challan was not shown as credit in PLA and not debited as duty therefrom - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Refund claim rejected due to incorrect deposit of duty amount.
2. Interpretation of Section 11B of the Central Excise Act for refund eligibility.

Analysis:
1. The case involved a situation where the respondent mistakenly deposited an amount for Central Excise duty of Unit No.1 instead of Unit No.2. The respondent had sufficient CENVAT credit balance and filed a refund claim of the amount deposited. The adjudicating authority rejected the claim as the duty amount was not debited from the PLA account. However, the Commissioner (Appeals) allowed the appeal, leading to the Revenue challenging the decision.

2. The Revenue argued that since the duty amount was not debited towards payment, the refund claim was not covered under Section 11B of the Central Excise Act. On the other hand, the respondent contended that the deposit made through the challan was solely for Central Excise duty and thus eligible for a refund under Section 11B, emphasizing that there was no other provision for such refunds.

3. The Judicial Member analyzed the submissions and found that the amount deposited through the challan was indeed towards duty, making it refundable under Section 11B. It was clarified that any refundable amount falls under the purview of Section 11B only. The Member agreed with the Commissioner's finding that the deposit, even if not debited from the PLA account, was eligible for a refund as per the provisions of the Act.

4. The Commissioner's decision was supported by the Member's observation that the deposit, though mistakenly made for Unit No.1, was in the nature of an advance lying in the account and thus refundable under Section 11B. The Member dismissed the Revenue's appeal, upholding the impugned order and emphasizing that the rejection of the refund claim was unwarranted based on the provisions of the Central Excise Act.

In conclusion, the judgment clarified the applicability of Section 11B of the Central Excise Act regarding refund claims for duty amounts deposited, even if not debited from the relevant account, emphasizing that the nature of the deposit determines its refund eligibility under the law.