2021 (3) TMI 1186 - AT - Central Excise

Refund of amount paid in excess - rejection on the ground of time limitation - assessee was entitled to seek refund in the year 2006, but the assessee had chosen to seek refund only in the year 2019 - explanation B (ea) to Section 11 B of the Central Excise Act, 1944 - HELD THAT - There are no hesitations in holding that the appellant s rightful request for refund dated 21.12.2006 which is very much on the record of the Revenue has not at all had been acted upon or rather ignored deliberately and nowhere do I find any denial by the Revenue as to its existence. Hence, I do not subscribe to the reasons given in the impugned order which has only upheld the Order-in-Original for rejecting the refund claim. I also find that the above refund claim of the appellant is very much in order, within the prescribed time and therefore, the impugned order deserves to be set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Settlement Commission's final order and grant of immunity.
2. Revenue's failure to comply with Settlement Commission's directions and obtaining stay orders.
3. Refund claim by the appellant and Revenue's contention of time-barred claim.
4. Adjudicating authority's rejection of refund claim and subsequent appeal.

Issue 1: Settlement Commission's final order and grant of immunity:
The appellant received a Show Cause Notice alleging duty demand, which was settled by the Settlement Commission at a reduced amount of ?17,25,518 with immunity from interest and penalty. The Commission also acknowledged the appellant's entitlement to a refund of the excess amount paid during the investigation.

Issue 2: Revenue's failure to comply with Settlement Commission's directions and obtaining stay orders:
The Revenue failed to respond to the appellant's request for adjustment of interest liability from the refund due and instead filed a writ petition seeking stay orders from the High Court. The High Court granted an interim stay followed by an absolute stay on the refund amount, which was in effect until 2018 when the petition was dismissed.

Issue 3: Refund claim by the appellant and Revenue's contention of time-barred claim:
The appellant requested a refund in 2019, which was met with a show cause notice proposing to reject the claim as time-barred under Section 11 B of the Central Excise Act. The Revenue argued that the claim should have been filed within one year of the Settlement Commission's order in 2006. The adjudicating authority rejected the refund claim, upheld by the Commissioner (Appeals), leading to the appellant's appeal.

Issue 4: Adjudicating authority's rejection of refund claim and subsequent appeal:
During the hearing, it was highlighted that the Revenue obtained a stay on the refund order for over a decade, impacting the appellant's ability to claim the refund within the specified time frame. The Tribunal held that the appellant's rightful request for refund in 2006 was ignored, and the rejection of the claim was unfounded. The impugned order was set aside, allowing the appeal with consequential benefits as per the law.

This detailed analysis of the judgment highlights the key issues surrounding the Settlement Commission's order, Revenue's actions, the appellant's refund claim, and the subsequent rejection leading to the appeal and final decision by the Tribunal.