2019 (9) TMI 176 - AT - Central Excise

Refund of CENVAT Credit - payment under protest - time limitation - unjust enrichment - HELD THAT - It is seen from the impugned order that the original authority, having subjected the refund claim to the twin tests of unjust enrichment and limitation of time, thought it fit to sanction only the claim pertaining to the period between January 2003 and September 2006. The propriety and legality of this claim did not appear to have been challenged by the jurisdictional Commissioner of Central Excise and hence the lack of eligibility to exemption N/N. 74/1993-CE dated 28th February 1993. The first appellate authority has affirmed the decision of the original authority that such payments as were made under protest alone are eligible for refund and none other - there is nothing on record placed by the appellant to contest this finding of operation of bar of limitation. Appeal dismissed.

Issues:
1. Eligibility for exemption under notification no. 74/93-CE dated 28th February 1993.
2. Refund claim for duty paid from January 1993 to December 2002 and January 2003 to September 2006.
3. Validity of clarification issued by the jurisdictional Assistant Commissioner.
4. Review of the order-in-original and appellate remedies.
5. Challenge against the order of the first appellate authority.
6. Eligibility for refund based on payments made 'under protest'.
7. Operation of bar of limitation on refund claims.

Analysis:

1. The appeal arose from a situation where the appellant, a Deputy Executive Engineer, sought clarification on eligibility for exemption under notification no. 74/93-CE dated 28th February 1993 for 'PSC poles' manufactured and cleared by them. The appellant filed refund applications for duty paid from January 1993 to December 2002 and January 2003 to September 2006. The rejection of the refund application was based on the timing of the clarification, CENVAT credit availed, and previous claims for provisional assessment conflicting with the duty exemption claim.

2. The Commissioner of Central Excise & Customs (Appeals) allowed the refund for the period from January 2003 to September 2006 without limitation impediment due to 'payment under protest' endorsement found in the challans. However, the rejection of the refund claim for the earlier period was upheld due to the absence of such endorsement. The first appellate authority's decision was not stayed, leading to the sanction of a partial refund of &8377; 38,48,095/-.

3. The eligibility for refund was solely determined based on a clarification by the jurisdictional Assistant Commissioner, termed as 'order-in-original no. 27/2006 dated 22nd February 2007'. The appeal raised concerns about the nature of this clarification, its appealability, and the absence of a show cause notice invoking section 11A of the Central Excise Act, 1944. The misinterpretation of this 'order-in-original' by the review authority was highlighted.

4. The appellate remedies sought were discussed, with Revenue not appealing against the first appellate authority's decision limiting the refund to a small amount of &8377; 3,17,250/-. The original authority sanctioned the refund only for the period between January 2003 and September 2006, subject to tests of unjust enrichment and time limitation. The decision regarding eligibility for exemption under notification no. 74/1993-CE was not challenged by the jurisdictional Commissioner of Central Excise.

5. The appeal was dismissed as the appellant failed to contest the finding that only payments made 'under protest' were eligible for refund, and no evidence was presented to challenge the operation of the bar of limitation on the refund claims. The decision was pronounced in open court on 04/09/2019.

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