2022 (11) TMI 799 - AT - Service Tax

Refund claim - time limitation - rejected as time-barred stating that the refund claims have been filed beyond the period of one year as envisaged under Section 11B of the Central Excise Act, 1944 - HELD THAT - The rejection of refund claims as time-barred by ignoring the date of initial filing of the claim is not sustainable. The Tribunal in the case of REPRO INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BELAPUR 2016 (4) TMI 328 - CESTAT MUMBAI had analyzed the similar issue and held that when claim has been returned for rectifying the deficiencies the claim cannot be held to be time-barred by computing the period of one year from the date of resubmitting the claim. The Principal Bench of the Tribunal in the case of COMMR. OF C. EX., INDORE VERSUS NATIONAL STEEL AGRO INDUSTRIES LTD. 2015 (11) TMI 1575 - CESTAT NEW DELHI held that if the claim is initially filed within time, the resubmission of claim has to be considered in continuation of the earlier claim and cannot be held to be time-barred. In the present case, when the period of one year is computed from the date of initial filing of the claim, the claims are made well within time. The date of initial submission of the refund claim is 10.07.2015, 10.07.2015, 01.09.2015 - In regard to the claim for July 2014-September 2014 it is seen that when computed from the last month of the quarter, the claim is filed well within time. The claim has been held to be time-barred computing the period of one year from the first month of the quarter. When the notification prescribes to file the refund claim for a quarter, the entire quarter has to be considered as a whole, without splitting each month. The appellant is eligible to get refund of unutilized credit of every month. The procedure to file refund claim for a quarter is only to make the filing and processing easier. It is noted in the impugned order as well as the order passed by the original authority that the appellant has not furnished E.R.2 returns and other necessary documents for processing the refund claims - matter requires to be remanded to the original authority for processing the refund claims after giving an opportunity to the appellant to furnish the required documents - Appeal allowed by way of remand.

Summary

Issues Involved:
1. Whether the refund claims were time-barred.
2. Whether the date of initial filing or resubmission should be considered for computing the period of limitation.
3. Whether the computation of the period of one year should be from the first or last month of the respective quarter.
4. Whether the absence of a deficiency memo affects the validity of the refund claim rejection.

Issue-wise Detailed Analysis:

1. Whether the refund claims were time-barred:
The authorities below rejected the refund claims as time-barred based on the resubmission dates rather than the initial filing dates. The appellant argued that the initial filing dates should be considered for computing the period of limitation. The Tribunal referred to several precedents, including Repco India Ltd. vs. CCE Belapur, which held that a claim returned for rectifying deficiencies should not be considered time-barred if initially filed within the stipulated period. The Tribunal concluded that the rejection of refund claims as time-barred by ignoring the initial filing dates is not sustainable.

2. Whether the date of initial filing or resubmission should be considered for computing the period of limitation:
The appellant contended that the date of the original filing should be used for computing the period of limitation, not the resubmission date. The Tribunal supported this view, citing the case of Repco India Ltd., where it was determined that claims returned for rectification and subsequently resubmitted should be considered as filed within the original timeframe. The Tribunal emphasized that the law on this aspect is well-settled, and the initial filing date should be used for limitation purposes.

3. Whether the computation of the period of one year should be from the first or last month of the respective quarter:
The department computed the period of one year from the first month of each quarter, leading to the rejection of the claims as time-barred. The appellant argued that the computation should be from the last month of the quarter. The Tribunal agreed with the appellant, stating that when the notification prescribes filing refund claims for a quarter, the entire quarter should be considered as a whole. The Tribunal held that the last month of the quarter should be used for computing the period of one year, ensuring the appellant's right to refund is not unjustly denied.

4. Whether the absence of a deficiency memo affects the validity of the refund claim rejection:
The appellant argued that for the fourth claim, no deficiency memo was issued, which is a procedural requirement as per the CBEC Manual. The Tribunal noted that the absence of a deficiency memo and the procedural lapses in issuing it within the stipulated time further invalidated the rejection of the refund claims. The Tribunal emphasized the need for the original authority to follow due process and provide the appellant an opportunity to furnish the required documents.

Conclusion:
The Tribunal set aside the impugned order rejecting the refund claims as time-barred. It remanded the matter to the original authority to process the refund claims after giving the appellant an opportunity for a personal hearing and to furnish the requisite documents. The Tribunal's decision was based on established legal principles and precedents, ensuring that the appellant's right to refund is upheld.