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2022 (5) TMI 562 - AT - Central Excise100% EOU - refund claim - relevant date u/s 11B of CEA - refund application is time barred or not - HELD THAT - Refund claim of the amount of Rs. 5 lakhs (fixed in two bank guarantees initially of Rs. 2.5 lakhs each) has wrongly been denied to be refunded invoking section 11B of Central Excise Act. Perusal of the provision shows that the provision relates to the claim for refund of duty. Once it is clear that the amount in question is not the amount of duty, the said provision cannot be invoked. It is also an apparent fact that the aforesaid amount has already been treated by this Tribunal as an amount of pre-deposit (vide order on stay application dated .9.01.2006). The relevant provision applicable to impugned amount is section 35F and 35FF. The very perusal of section 35FF which talks about interest on delayed refund of amount of pre deposit under section 35F makes it clear that the provision is absolutely silent about any time limit for the assesee to claim his amount which was deposited by him for the purpose other than duty. The Hon ble Apex Court in the case of U.O.I. VERSUS SUVIDHE LTD. 1996 (8) TMI 521 - SC ORDER while holding the decision of Bombay High Court in SUVIDHE LTD. VERSUS UNION OF INDIA 1996 (2) TMI 136 - BOMBAY HIGH COURT has held that Section 11B of the Act can never be invoked to cases of pre-deposit of duty in compliance of section 35 of the Act. Since the pre-deposit condition is not payment of duty but it is only pre-deposit for availing the right of appeal that the time bar of Section 11B cannot be imposed on such an amount while sanctioning the refund thereof. Thus, the provision of Section 11B of Central Excise Act is not applicable to the refund in question - reliance can also be placed in the case of BAJAJ AUTO LTD. VERSUS COMMISSIONER OF C. EX., AURANGABAD 2007 (1) TMI 408 - CESTAT, MUMBAI wherein it was held that the amount which was deposited during the initial stages of proceedings cannot be retained by the Revenue and if the same is retained then such retention is without the authority of law, that the same will amount violation of Section 365 of Constitution of India. Department also cannot be allowed to be unjustly enriched by retaining the amount for which it had no authority of law to collect. Thus, it is held that the Commissioner (A) has wrongly invoked the time bar of Section 11B of Central Excise Act despite that the amount in question was not the amount of duty - appeal allowed - decided in favor of appellant.
Issues:
Refund claim rejection based on limitation under Section 11B of the Central Excise Act. Analysis: The appellant, a 100% EOU engaged in copper index, faced allegations of under-valuing copper ingots cleared in DTA, which was set aside by the Tribunal in 2013. A refund claim of Rs. 5 lakhs, initially deposited as bank guarantees in 2003 and 2004, was filed in 2019 but rejected citing limitation under Section 11B. The appellant argued that the amount was a pre-deposit and not duty, thus not subject to the time limit under Section 11B. The Department claimed the refund application was time-barred as it was filed after six years from the relevant order of 2013. The Tribunal observed that the amount was deposited before the proceedings began and was never treated as duty, as confirmed by the Tribunal's order in 2013. The Department's attempt to claim the amount from the bank was unsuccessful, and no appeal was filed against the Tribunal's decision. The Tribunal held that the amount was a deposit and not duty, thus Section 11B did not apply. Citing relevant case laws, the Tribunal emphasized that the time limit under Section 11B cannot be imposed on pre-deposit amounts for appeal rights. Referring to various judgments, the Tribunal concluded that the Department cannot retain the amount, as it would lead to unjust enrichment. In light of the above, the Tribunal set aside the Commissioner's decision to invoke Section 11B, allowing the appeal and granting the appellant the refund amount with 6% interest from the date of deposit. The Tribunal highlighted that the Department's retention of the amount without legal authority would violate the law and lead to unjust enrichment, emphasizing the appellant's right to the refund.
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