2024 (5) TMI 1270 - AT - Central Excise

Rejection of refund claim - time limitation - Refund of deposits versus Refund of duty - Section 11B of the Central Excise Act, 1944 - refund claim has been filed by the appellant on 27.01.2016, as a consequence of the order dated 08.05.2014 of tribunal - HELD THAT - The amounts have been deposited as per the direction of the departmental officers in respect of certain shortages detected at the time of visit. The amounts so deposited on the direction of the departmental officer cannot be said to be voluntary deposit. Further appellant have contested the demand and have finally succeeded in getting the same set aside by the tribunal. As the appellant was contesting the demand the amount paid by them were necessarily not paid voluntarily but were paid under compulsion from the officer and were paid under protest. It is a settled law that any amount which becomes due to the appellant consequent to an Appellate order the deposits should have been refunded to the appellant. In the case of GS. RADIATORS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, LUDHIANA 2004 (10) TMI 158 - CESTAT, NEW DELHI it was held that ' payment made by the appellants has to be considered as payment under protest and the refund should be allowed to them if otherwise in order.' Board has vide circular No 984/8/2014-CX dated 16.09.2014 clarified that ' in all cases where the appellate authority has decided the matter in favour of the appellant, refund with interest should be paid to the appellant within 15 days of the receipt of the letter of the appellant seeking refund, irrespective of whether order of the appellate authority is proposed to be challenged by the Department or not.' There is no reasonable ground for rejection of the refund claim - Appeal allowed.

Summary

Issues:
- Refund claim rejected as barred by limitation under Section 11B of the Central Excise Act, 1944.
- Appellant's plea of not receiving tribunal's order and filing refund claim within prescribed period.
- Whether amounts deposited by appellant on officer's direction constitute duty for refund purposes.
- Applicability of precedent cases and circulars on refund of deposits made under compulsion.

Analysis:
- The appeal was against the rejection of a refund claim as time-barred under Section 11B. The appellant filed the claim in 2016 following a tribunal order in their favor, but the original authority rejected it citing limitation. The appellate authority upheld the rejection, leading to the current appeal.
- The appellant argued they filed the claim based on a downloaded copy of the tribunal order as they claimed not to have received the original order. However, the tribunal found the order was pronounced in open court in the presence of the appellant's counsel, undermining the appellant's argument of not receiving the order.
- The tribunal analyzed the nature of amounts deposited by the appellant on the officer's direction due to detected shortages. It concluded that these deposits did not constitute duty for refund purposes, especially since the appellant contested the demand and eventually succeeded in having it set aside by the tribunal.
- The tribunal referred to various precedent cases and a circular clarifying that amounts deposited under compulsion and later refunded due to appellate orders should not be subject to the same limitations as duty refunds. It highlighted that the amounts paid were under protest and not voluntarily, thus warranting a refund without the limitation constraints.
- Considering the arguments and precedents, the tribunal allowed the appeal, emphasizing that the rejection of the refund claim had no reasonable grounds. The decision was dictated and pronounced in open court, overturning the previous rejection and ordering the refund to the appellant.