2019 (6) TMI 563 - AT - Central Excise

100% EOU - Refund claim - time limitation - rejection of refund on the ground that the date of issue of invoice is more than one year prior to refund claim - HELD THAT - The appellant had taken the cenvat credit in the month of March 2014 though the invoices were issued during the year 2012 because during the relevant period the restriction of one year was not there under the Cenvat Credit Rules and the said restriction of one year to avail the cenvat credit came from September 2014 whereas in the present case, the credit was availed in March 2014 and refund was also filed in March 2014 itself which is falling within the one year time limit. As per the provisions of Rule 5, it is clear that the time limit, if any has to be counted from the relevant period in which the credit was availed and in the period in which services were received. Therefore, the basis on which the refund is rejected is not correct and not in accordance with law. The refund is not time-barred - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on time-barred invoices.

Analysis:
The appeal was against the order rejecting the refund claim due to certain invoices being time-barred. The appellant, a 100% EOU engaged in manufacturing and exporting spectacle lenses, filed a refund application for the period from January 2014 to September 2015. The refund was partially sanctioned, but a portion was rejected as time-barred due to the date of issue of certain invoices being more than one year prior to the refund claim. The Commissioner (Appeals) upheld the rejection, leading to the present appeal.

The appellant argued that the rejection solely on the basis of being time-barred was legally unsustainable. They contended that the order failed to consider the date of credit availment and the prevailing provisions during the relevant period. It was highlighted that the credit was availed in March 2014 when there was no time restriction, and the refund claim was filed in the same month. Even if the one-year time limit under Section 11B applied, it should start from credit availment, which was before the time limit came into force in September 2014. The appellant also clarified that the invoices in question were from 2012, but they missed claiming credit until March 2014, within one year of credit availment. They argued that the Commissioner's reliance on certain decisions was misplaced as they were not relevant to refund of accumulated credit.

On the other hand, the AR defended the impugned order, supporting the rejection of the refund claim based on being time-barred. After hearing both parties and examining the records, the Tribunal found merit in the appellant's arguments. It was observed that the credit was taken in March 2014 when there was no one-year restriction in place. The restriction came into effect in September 2014, making the credit availment and refund claim in March 2014 fall within the one-year timeframe. The Tribunal noted that as per Rule 5, any time limit should be calculated from the relevant period of credit availment and service receipt. Consequently, the rejection of the refund claim based on being time-barred was deemed incorrect and not in line with the law. The Tribunal distinguished the case laws relied upon by the Commissioner (Appeals) as not directly applicable to the present situation. Thus, the Tribunal allowed the appeal, setting aside the impugned order and ruling in favor of the appellant.