2021 (3) TMI 816 - AT - Central Excise

Refund of CENVAT Credit - time limitation - although the amount paid by the appellant under protest during the course of investigation itself but when adjudication order passed the same was appropriated - HELD THAT - As Section 11B itself states that the limitation of one year as prescribed under Section 11B shall not apply wherein any duty or interest if any paid on such duty has been paid under protest. Further the Master Circular itself has directed to their departmental officer that in all the cases where appellant authority has decided the matter in favour of the appellant, the refund alongwith interest is to be paid to the appellant within 15 days of the receipt of the letter of the appellant seeking refund irrespective of whether or the order authorities proposed challenged by the department or not. As departmental circular as well as the provisions of law are very much clear that when duty is paid under protest the time limit prescribed under Section 11B is not applicable therefore, the authorities below has misplaced being have not interpreted the law and unnecessarily drag the appellant into litigation up to the level of this Tribunal - the appellant is entitled to claim refund along with interest and the same is to be sanctioned to the appellant within 30 days of receipt of this order. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Rejection of refund claim on grounds of limitation
- Violation of principle of natural justice
- Interpretation of Section 11B of the Central Excise Act 1944
- Applicability of circular 1053/02/17-Central Excise dated 10.03.2017

Analysis:
The appellant appealed against the rejection of their refund claim, which was deemed barred by limitation by the authorities below. The case originated from an audit in 2014-2015, where discrepancies in payment of Central excise duty and availing of cenvat credit were noted. A show cause notice was issued, leading to a series of events including payment under protest, challenge before the Ld. Commissioner (Appeals), and subsequent appeal by the Revenue to the Tribunal. The Tribunal's order dated 23.05.2017 dismissed the Revenue's appeal, prompting the appellant to file a refund claim. However, the refund claim was rejected on grounds of limitation, as the amount paid under protest was considered appropriated upon adjudication, leading to the vacating of the protest and the subsequent rejection of the refund claim.

The appellant argued that the impugned order violated the principle of natural justice by not granting them an opportunity to argue their case. Additionally, they relied on Section 11B of the Central Excise Act 1944, which exempts the limitation period for refund of amounts deposited under protest. The appellant also referenced circular 1053/02/17-Central Excise dated 10.03.2017, which states that amounts deposited under protest are refundable suo moto upon the passing of a favorable order. On the other hand, the Ld. AR supported the impugned order, leading to a hearing where both parties' submissions were considered.

The Tribunal, in its analysis, emphasized that Section 11B exempts the limitation period when duty or interest is paid under protest. Referring to the Master Circular, it highlighted the directive for timely refund payment upon a favorable decision. The Tribunal concluded that the impugned order had misinterpreted the law and unnecessarily prolonged the litigation. Consequently, the Tribunal set aside the impugned order, ruling in favor of the appellant. The Tribunal held that the appellant was entitled to claim the refund along with interest, directing its sanction within 30 days of the order.

In conclusion, the judgment addressed the issues of limitation regarding refund claims, the principle of natural justice, the interpretation of Section 11B of the Central Excise Act 1944, and the applicability of relevant circulars. The Tribunal's decision favored the appellant, emphasizing the exemption from limitation when duty is paid under protest and directing the timely sanction of the refund with interest.