2021 (8) TMI 72 - AT - Central Excise

Refund claim for the amount of duty interest penalty paid during investigation of demand case - rejection on the ground of time bar - ex-parte order - non consideration of application for restoration of appeal - principles of natural justice - HELD THAT - It is clear that the amount paid by the appellant is indeed Excise duty, interest and penalty. Therefore, the refund of the same is clearly governed by the proviso of Section 11B of the Central Excise Act, 1944. The present refund claim is arising of consequential to the dropping of demand by the tribunal - it is clear that the amount which is paid prior to or after the adjudication of demand case will become refundable only after any order decree in court or tribunal. In section 11B, as regard relevant date in the case of the refund of any amount paid, the relevant date is from the date of the order by which such demand is dropped. In the present case one year period is applicable from the dropping of demand by this tribunal in the demand case. The appellant has admittedly filed the refund after one year from the passing of the tribunal order whereby demand was set aside. Therefore, in terms of the sub clause (ec) of clause (B) of section 11B, the refund claim filed after one year from the relevant date is clearly time bar. If any assessee pay duty, interest and 25% penalty no notice needs to be issued and this benefit was explicitly availed by the appellant as they have made the submission before the Adjudicating Authority in the submission dated 26.12.2019 and 20.07.2010 which was recorded in the Order-In Original. Since appellant have availed this benefit it is clear that the appellant has consciously paid the duty, interest and 25% penalty. Hence it cannot be said that the amount paid is not duty and Pre-deposit. This is a case of refund of duty and interest and the same is governed by Section 11B - Application being time bar not admissible to the appellant - appeal dismissed.

Summary

Issues:
Refund claim for duty, interest, and penalty paid during investigation time-barred under Section 11B.

Analysis:
1. The appellant filed a refund claim for duty, interest, and penalty paid during investigation after the demand case was settled in their favor. The claim was rejected as time-barred by the adjudicating authority citing Section 11B. The Commissioner (Appeals) allowed the refund of penalty but rejected the appeal for duty and interest refund due to time limitation.

2. The appellant argued that the payment made during investigation should be treated as a pre-deposit under Section 35F, not governed by Section 11B. They contended that no formal application is required for refund of pre-deposit. Various circulars and judgments were cited to support this argument.

3. The revenue representative reiterated that the appellant paid duty, interest, and penalty to avail waiver benefits, making it a duty payment. They argued that Section 11B, including time limitation, applies to refund claims for such payments. Several judgments were cited to support this position.

4. The Tribunal analyzed the submissions and records. It noted that the appellant consciously paid duty, interest, and penalty during investigation, not compelled by the department. The stay order confirmed the payment as duty, interest, and penalty. Refund of such amount falls under Section 11B, which specifies a time limit for refund claims post judgment or order. The appellant's refund claim was filed after the prescribed time, making it time-barred.

5. The Tribunal distinguished the appellant's case from cited judgments where amounts were considered pre-deposits. It emphasized the conscious payment of duty, interest, and penalty by the appellant, as endorsed by the Tribunal in the stay order. Therefore, the judgment and circulars cited by the appellant were deemed irrelevant.

6. Based on the facts and findings, the Tribunal concluded that the refund claim for duty and interest was time-barred under Section 11B. The impugned order was upheld, and the appeal was dismissed accordingly.