2008 (10) TMI 246 - HC - Central Excise

Refund - Limitation - Held that - merely because the refund application was not filed strictly within 6 months before expiry of period specified in Clause 6 of Appendix read with Section 11B ibid but was filed late by 27 days could not have been made the sole ground for the rejection of application as barred by limitation. Infact, the claim in question did not fall strictly within the forecorners of Section 11B but it essentially fell within the forecorners of Clause 6 of Appendix to notification issued under Rule 57F - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against rejection of refund claim under Central Excise Act based on limitation.

Analysis:
The appellant, a limited company engaged in the business of cotton yarn, fabric, and polyester yarn, availed Modvat credit but could not utilize it due to fulfilling export obligations under the EPCG Scheme. A refund claim was filed before the Assistant Commissioner, which was rejected as time-barred. The Commissioner (Appeal) and Tribunal upheld the rejection. The High Court found that the rejection based on limitation was erroneous. The Court held that the strict law of limitation under Section 11B of the Central Excise Act does not apply to refund claims under Rule 57F. The authorities should have considered if the appellant submitted necessary proof of exportation and relevant documents. The Court emphasized that the claim did not strictly fall under Section 11B but under Rule 57F.

The High Court emphasized that the mere delay of 27 days in filing the refund application should not have been the sole ground for rejection. The Court highlighted that the claim was procedural in nature and required satisfaction of specific conditions under Rule 57F. The authorities erred in solely relying on the limitation aspect under Section 11B. The Court directed the authorities to re-examine the appellant's claim on its merits, considering relevant notifications and provisions, and pass appropriate orders. The appeal was allowed, impugned orders were set aside, and the refund application was held to be within time. No costs were awarded in this matter.