2022 (5) TMI 474 - AT - Central Excise

Rejection of refund claim - deemed export - applicability of time limitation - application for refund was filed beyond the prescribed period of one year - Section 11B of the Central Excise Act, 1944 - HELD THAT - It is not in dispute that the deemed export did not attract any Excise Duty and hence, it is not the duty of the appellant / taxpayer to repeatedly plead before the authorities that the project in which it was involved was a deemed export. Moreover, the fact that the appellant filed its refund claim immediately, though before a wrong forum, itself proves the bona fides of the appellant and hence, the same establishes the fact that there was an application for refund claim within the limitation period prescribed in the statute, though before a wrong forum. The purchase order coupled with the tax invoice also reflect the position which sufficiently establish the fact that the duty payment, which was not required to be made, but still having been paid, could only be under protest - Further, when the duty itself was not liable to be paid by virtue of N/N. 06/2006, the argument that the appellant was required to make the payment holds no water, as long as the Revenue does not suspect the involvement of the appellant as a sub-contractor. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the rejection of the refund claim under Section 11B of the Central Excise Act, 1944 is justified?

Analysis:
1. The appellant supplied isolators and spares to a deemed export project owned by M/s. Damodar Valley Corporation through a main contractor. The appellant made the payment despite being exempted from duty, leading to a refund claim rejection by the DGFT and subsequent appeal processes.

2. The Adjudicating Authority rejected the refund claim due to filing beyond the prescribed period. The Commissioner of Central Excise upheld this rejection, prompting the current appeal.

3. The appellant argued that duty payment was not required as it was a deemed export project, citing relevant court decisions. The main contractor issued a disclaimer certificate supporting the refund claim.

4. The Departmental Representative contended that the duty was rightly paid due to the absence of the appellant's name in the project certificate. Lower authorities supported this view.

5. The Tribunal noted that the deemed export did not attract duty, indicating the duty payment was under protest. The appellant's immediate refund claim to a wrong forum demonstrated good faith and timely action.

6. The purchase order and tax invoice confirmed the duty payment position. The disclaimer certificate from the main contractor further supported the appellant's refund claim.

7. Given that duty was not required to be paid under the relevant notification, the Tribunal found no merit in the rejection of the refund claim. The impugned order was set aside, and the appeal was allowed with consequential benefits as per law.