2002 (1) TMI 122 - AT - Central Excise

Summary

Issues:
- Refund claim disallowed by the Commissioner (Appeals) as time-barred under Section 11B of the Act.

Analysis:
1. The case involved an appeal against the order-in-appeal dated 24-3-2001, where the Commissioner (Appeals) upheld the Order-in Original dated 30-7-1998 disallowing the refund claim of the appellants. The appellants, engaged in manufacturing electric fans and exporting them, availed benefits under the Duty Entitlement Certificate Scheme (DEEC Scheme) by importing raw materials under advance licenses. The dispute arose when they realized their mistake in availing the benefits and decided to reverse the credit under protest.

2. The key contention was that the reversal of credit under protest exempted the appellants from the limitation period of six months prescribed under Section 11B of the Act for claiming a refund. The appellants argued that the limitation period should start from the date they debited the recredited amount under protest, i.e., 10-2-97, as per the direction of the Assistant Commissioner. They relied on legal precedents such as the Apex Court judgment in India Cement Ltd. v. CCE and the Tribunal's judgment in Rosin & Turpentine Factory v. CCE to support their case.

3. The facts were not in dispute; the appellants had reversed the credit under protest and later recredited the amount upon realizing their mistake. The Tribunal observed that the reversal of credit was indeed made under protest, which meant that the provisions of Section 11B did not apply in this case. The cause of action for claiming a refund arose when the Assistant Commissioner directed the appellants to debit the recredited amount and pay interest for the delayed reversal of credit, which was accepted by the appellants in May 1999.

4. The Tribunal concluded that the impugned order of the Commissioner (Appeals) rejecting the refund claim on the grounds of limitation was set aside. The case was remanded back to the Assistant Commissioner for adjudication on the merits of the refund claim after hearing the appellants. The decision was based on the understanding that the right to claim recredit of the debited amount accrued to the appellants only after 10-2-97, making their claim well within the time limit.

5. In summary, the Tribunal found in favor of the appellants, determining that their claim for refund was not time-barred due to the protest made during the reversal of credit. The case was sent back for further adjudication on the merits of the refund claim, emphasizing that the matter had not been decided on its substance by the lower authorities.