2018 (7) TMI 995 - AT - Central Excise

Refund of Interest - Time limitation - discharge of duty in terms of Section 3A of Central Excise Act, 1944 under Compounded Levy Scheme - whether the same would be hit by the bar of limitation or not? - Held that - The present appellant did not keep the matter alive by filing any appeal against the confirmation of interest or deposit of the same. All the refunds, have to be claimed in terms of Section 11 B of the Act, which prescribed a period within which such claims should have been filed by an assessee, subject to some exceptions. Admittedly in the present matter, the appellant s case is not covered by such exceptions like payment of duty under protest or the assessments being provisionally. The Hon ble Supreme Court in the case of Porcelain Electrical Mfg. 1994 (11) TMI 145 - SUPREME COURT OF INDIA has held that the authorities working under the Act are bound by the provisions of the Act and are required to decide the disputes in terms of the law provided in the said Act - Tribunal being creature of the Act, is bound by the provisions of the Act and even though the appellant s refund claim of interest is admissible on merits, the same having been filed after the normal period of one year provided under Section 11 B, is hit by the bar of limitation. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Duty liability under Compounded Levy Scheme for Pan Masala and Chewing Tobacco.
2. Refund claim of interest amount rejected on the grounds of time bar.

Analysis:
Issue 1: Duty liability under Compounded Levy Scheme for Pan Masala and Chewing Tobacco
The appellant, engaged in the manufacture of Pan Masala and Chewing Tobacco, discharged their duty liability under Compounded Levy Scheme as per the relevant rules. The duty obligation was discharged by the 5th of the following month of clearances, along with interest payment from the 5th of the same month until the duty payment date. The Tribunal had previously ruled in favor of the appellant's Delhi Unit, stating that no interest liability would arise, which led to the appellant filing refund claims for interest amounts in their Kanpur Unit for specific periods. However, the refund claims were rejected by the Lower Authorities on the basis of being time-barred.

Issue 2: Refund claim of interest amount rejected on the grounds of time bar
The appellant argued that since the Tribunal had declared the law regarding interest liability in their Delhi Unit, the refund claims should not be time-barred. They contended that as there was no requirement of interest payment, the Revenue should refund the amount without raising the issue of limitation. However, the Tribunal noted that the refunds were not a direct consequence of the Tribunal's orders for the Kanpur Unit, where no litigation on interest payment was ongoing. The Tribunal emphasized that the refunds filed by the appellant were beyond the normal limitation period of one year as prescribed by Section 11 B of the Central Excise Act. Even though the Tribunal acknowledged the merit of the refund claims based on the law declared for the Delhi Unit, the claims were rejected due to being time-barred. The Tribunal upheld the Lower Authorities' decision to reject the appeals on this basis.

In conclusion, the Tribunal held that the refund claims for interest amount were rightly rejected due to being beyond the statutory limitation period, despite the law declared by the Tribunal for the appellant's Delhi Unit. The Tribunal emphasized the importance of adhering to the statutory provisions and limitations prescribed under the Central Excise Act, ultimately upholding the rejection of the appeals.