2018 (5) TMI 543 - AT - Central Excise

Refund claim - excess payment of duty under PLA - Held that - the appellant have paid the service tax on the supplementary invoice dated 31.12.2013 by the landlord and thereafter, recasted the PLA and filed the refund claim on the ground that they are entitled to get the refund as the appellant is not liable to pay the excise duty in view of the N/N. 11/2013-CE dated 28.2.2013. Scope of SCN - time limitation - Held that - in the SCN, there is no allegation regarding the time bar raised by the appellant - finding of the Commissioner (A) is beyond the show-cause notice and is not tenable under law. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on PLA balance and time bar under Section 11B of Central Excise Act.

Refund Claim Rejection Based on PLA Balance:
The appellant, engaged in manufacturing readymade garments, sought a refund of excise duty paid on input services under CENVAT Credit Rules, 2004. The appellant, operating in a rented premise, paid rent that included service tax, but the landlord failed to issue invoices or collect service tax. The landlord later paid service tax under the Voluntary Compliance Encouragement Scheme and issued supplementary invoices. The appellant claimed refund based on unutilized credit and excess debit to PLA. The authorities rejected the claim citing a 'NIL' balance in the PLA as of 28.2.2013, stating that rewriting the PLA is impermissible. The appellant argued for cash refund citing a High Court decision allowing refunds in the absence of manufacturing activity. The Tribunal found the appellant had a 'NIL' PLA balance, paid service tax on supplementary invoices, and was exempt from excise duty post-28.2.2013. The Commissioner's findings on lack of evidence for service tax payment and ineligibility for credit in the PLA were upheld.

Time Bar Under Section 11B of Central Excise Act:
The Commissioner found the refund claim filed on 25.9.2014 to be time-barred under Section 11B of the Central Excise Act. However, the show-cause notice did not raise this allegation. The Tribunal deemed the Commissioner's finding beyond the notice scope and untenable under law. The Commissioner's rejection based on the High Court decision's inapplicability to the case was also upheld. The Tribunal upheld the impugned order, dismissing the appeal due to the lack of infirmity warranting interference.

In conclusion, the Tribunal upheld the rejection of the refund claim based on the 'NIL' balance in the PLA, absence of evidence for service tax payment, and time bar under Section 11B of the Central Excise Act. The Commissioner's findings were deemed reasoned, and the High Court decision cited by the appellant was found inapplicable. The impugned order was upheld, and the appeal was dismissed.