2019 (1) TMI 1166 - AT - Central Excise

Refund of duties of central excise - discharge of duty liability under protest - enhancement of assessable value - rejection of the refund claim on the ground of being barred by limitation of time prescribed in section 11B of Central Excise Act, 1944 - Held that - The first appellate authority had not examined the merits of the appeal filed before him. It is also noted that the original authority had not held the claim to be barred by limitation of time but had rejected it on the premise that the dispute settled by the decision of the Kolkata bench of the Tribunal would not yield consequential relief to the appellant registered separately in the Mumbai jurisdiction. Hence, the first appellate authority had failed to restrict the proceedings to the appeal before him. The appellant has produced the challans pertaining to discharge of duty liability on which protest has been clearly noted. There can, thus, be no doubt that the claim was not barred by limitation of time. Matter remanded back to the first appellate authority for a fresh decision on the merit - appeal allowed by way of remand.

Summary

Issues:
Appeal against rejection of claim for refund of central excise duties based on rule 8 of Central Excise Valuation Rules, 2000; rejection by original authority due to non-challenge beyond first appellate authority; rejection by first appellate authority based on limitation of time; grounds for setting aside the order.

Analysis:
The appellant, M/s Bharat Sanchar Nigam Ltd, appealed against the rejection of its claim for refund of central excise duties under rule 8 of Central Excise Valuation Rules, 2000. The original authority rejected the claim as the duty liability had not been challenged beyond the first appellate authority. The first appellate authority, Commissioner of Central Excise (Appeals), Mumbai Zone-II, rejected the claim based on limitation of time, as the appellant failed to establish that the duties had been paid 'under protest.' The appellant had discharged tax liability based on cost of production without adding profit percentage for certain periods. The liability was discharged for other periods based on proceedings not challenged beyond the first appellate authority. The demand post-March 2007 was dropped following a Tribunal decision, which was later referred for review due to erroneous assumptions. The rejection of the refund claim on the ground of time limitation was upheld, without examining the appeal's merits, leading to a valid ground for setting aside the order.

The impugned order failed to consider the merit of the appeal and wrongly upheld the rejection based on time limitation. The appellant provided challans with 'protest' noted, indicating the claim was not time-barred. The Tribunal found no substance to consider in the appeal due to the lack of merit consideration. Therefore, the impugned order was set aside, and the matter was remanded to the first appellate authority for a fresh decision on the appellant's claim.

This judgment highlights the importance of considering both procedural aspects, such as time limitation, and substantive merits of a claim for refund of duties. It emphasizes the need for proper documentation, like challans with 'protest' noted, to support refund claims and the significance of challenging duty liabilities beyond the first appellate authority when required. The decision to remand the matter for a fresh decision underscores the judicial process's commitment to ensuring fair consideration of claims based on legal principles and factual evidence.