2018 (2) TMI 1308 - AT - Central Excise

Refund claim - duty paid on raw materials sent to job workers - time limitation - section 11B of the CEA 1944 - Held that - The claim filed beyond the period of limitation cannot be overcome by making a refund claim appear to be an application for restoration of CENVAT credit - The credit having been reversed and the appellant having issued sales invoice retrospectively, amending their accounts so as to include the excise duty in the sales invoices, this contention of the appellant that the sale has not taken place does not find favor with us - appeal dismissed - decided against appellant.

Summary

Issues:
1. Change in pattern of supply of components from job work to outright sales.
2. Refund claim filed by the appellant for duty paid on raw materials sent to job workers.
3. Dispute regarding restoration of CENVAT credit and refund of excise duty.
4. Time-barred refund claim under section 11B of the Central Excise Act, 1944.
5. Disagreement between job workers and appellant on changed supply pattern.

Analysis:
1. The case involved a change in the supply pattern of components by the appellant from job work to outright sales due to a change initiated by the raw material supplier. This change led to the issuance of sales invoices instead of challans for further manufacturing activities, resulting in duty payment by the appellant.

2. The appellant filed a refund claim for duty paid on raw materials sent to job workers during a specific period. The claim was challenged by the department as time-barred under section 11B of the Central Excise Act, 1944, leading to a dispute over the refund eligibility.

3. The appellant argued for restoration of CENVAT credit instead of a direct refund, citing that the two job workers did not accept the changed supply pattern, hence no actual sale took place. The appellant contended that since the job workers returned the goods, they should be allowed to recredit the excise duty reversed during the changed supply process.

4. The department, however, maintained that the refund claim was not for recredit and that the duty paid by the appellant on sales invoices cannot be refunded after the sale transaction is completed. The authorities held that the claim for recredit does not merit consideration, especially after the duty was already discharged by the appellant.

5. The Tribunal observed that the dispute primarily revolved around the supply of raw materials to two specific job work manufacturers who did not agree with the changed supply pattern. Despite the appellant's arguments, the Tribunal upheld the lower authorities' decision, emphasizing that the claim filed beyond the prescribed time limit cannot be transformed into a restoration of CENVAT credit claim. The appeal was ultimately dismissed based on these findings.