2021 (7) TMI 48 - AT - Central Excise

Refund claim of amount deposited during investigation - the appropriation order earlier passed, was set aside - relevant time for refund - what should be the relevant date from which the period of one year is to recon for the impugned refund? - HELD THAT - Relevant provisions of refund is section 11B of Central Excise Act. Second proviso of (2) to section 11B specifically provide that limitation shall not apply where no duty has been paid under protest - Hon ble Supreme Court in the case of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA 1996 (12) TMI 50 - SUPREME COURT has clarified that when the duty is paid under the order of Court, pending the appeal / reference/ writ petition, it will certainly be payment under protest - In such a case, it is obvious, it would not be necessary to lodge the protest as is otherwise provided under the Rules. Since the appellant has challenged the amount which got deposited by him during investigation, the protest is very much lodged on his part not as a party to such decision, the plea of limitation should not debar his claim. Section 11B of CEA makes it abundantly clear that it is the date of judgement as consequence whereof the amount became refundable. No doubt, the CESTAT s Final order in RAY BAN SUN OPTICS INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR 2012 (12) TMI 260 - CESTAT, NEW DELHI , which the amount/duty paid by the appellant was made refundable but the Department opted for continuation of the said litigation by filing an appeal before the High Court. Once that option got exercised, the final judgement about entitlement of appellant to have the refund of said amount/duty paid, is the judgement announced by High Court in the said appeal. Since the said appeal of the Department was dismissed by Hon ble High Court on 21.04.2017 2017 (4) TMI 1154 - ALLAHABAD HIGH COURT irrespective of technical ground, the fact remains that entitlement of the appellant to refund of duty paid got finalised only on 21.04.2017 hence the relevant date under section 11B(ec) is none but 21.04.2017. Refund claim is filed on 19.02.2018 which, therefore, is very much within one year thereof, hence, wrongly been held to be barred by time. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund claim filed beyond the limitation period.
2. Interpretation of relevant date for refund claim under section 11B of Central Excise Act.

Analysis:
1. The appellant, engaged in manufacturing sunglasses and spectacle frames, faced a demand of ?16,89,669 along with interest and penalty for violating Rule 3, 4, and 7 of Cenvat Credit Rules. The demand was initially confirmed but later set aside by CESTAT in a Final Order dated 31.03.2012. A subsequent refund claim of the same amount was rejected as being time-barred, filed on 19.02.2018, beyond one year from the Final Order. The Commissioner (Appeals) upheld the rejection, leading the appellants to appeal before the Tribunal.

2. The issue revolved around determining the relevant date for the refund claim under section 11B of the Central Excise Act. The appellant argued that the limitation period should not apply as the duty was paid under protest during investigation. Citing the decision in the case of Kisan Cooperative Sugar Factory Ltd. vs. Commissioner of Central Excise, the appellant contended that the date of the High Court's decision should be the relevant date for the refund claim. On the other hand, the department argued that the refund should have been filed within one year of the Final Order of CESTAT in 2012, making the 2018 claim time-barred.

3. The Tribunal analyzed the provisions of section 11B and the relevant case law to determine the relevant date for the refund claim. It noted that the duty paid under the order of the Court, pending appeal, is considered payment under protest. Considering that the appellant challenged the deposit made during investigation, the protest was deemed lodged. The Tribunal emphasized that the relevant date for the refund claim was the date of the final judgment entitling the appellant to the refund, which, in this case, was the High Court's decision on 21.04.2017. As the refund claim was filed on 19.02.2018, within one year of the relevant date, the Tribunal set aside the previous findings and allowed the appeal.

In conclusion, the Tribunal allowed the appeal, setting aside the rejection of the refund claim as being time-barred, emphasizing the importance of the relevant date under section 11B for refund claims in excise matters.