2018 (1) TMI 997 - HC - Central Excise

Refund of pre-deposit - period of limitation - Section 11 B(5) of the Central Excise Act, 1944 - Held that - A refund will occur only if money is paid. Even, as per the orders passed by the CEGAT, the petitioner had pre-deposited such amount as a condition precedent for filing an appeal. Thus, the said deposit should abide by the final orders to be passed by the CEGAT in the petitioner s appeal petition. Such deposit amount cannot be appropriated towards the duty demand, unless and until the CEGAT dismissed the appeal. Thus, for all practical purposes, the said amount stood remained in a suspense account as a deposit pending appeal before the CEGAT. Therefore, Section 11 B(5) of the Central Excise Act, 1944 would have no application to the facts and cirucumstances of the case. Even assuming that the respondent construed the amount deposit as paid, limitation for filing application for refund can arise and will arise only after the order passed by the CEGAT dated 31. 10. 2002. Within hardly seven months from the said date, the petitioner made the first request, followed by remainder - Thus, going by these dates, the application filed by the petitioner is not hit by limitation. Petition allowed.

Summary

Issues:
- Challenge to order for central excise duty demand
- Refund claim rejection based on limitation

Analysis:
1. The petitioner, an Executive Engineer, challenged an order demanding central excise duty. The petitioner pre-deposited a sum as a condition for filing an appeal. The appeal was dismissed due to a delay in deposit. However, the High Court granted liberty to approach the tribunal for restoration. The appeals were allowed, directing the refund of the pre-deposited amount. The revenue did not appeal, making the order final. The petitioner requested the refund, but it was rejected citing limitation under Section 11 B(5) of the Central Excise Act, 1944.

2. The High Court found the rejection unsustainable for multiple reasons. Firstly, the pre-deposited amount was not a payment but a deposit pending appeal. It could not be appropriated until the appeal outcome. Therefore, Section 11 B(5) did not apply. Secondly, even if treated as paid, the limitation for a refund claim would start after the tribunal's order. The petitioner's application was within the time frame, making the rejection invalid. As a result, the High Court quashed the impugned order and directed the refund of the amount with statutory interest within 12 weeks. No costs were awarded, and the petition was closed.