2024 (7) TMI 1394 - AT - Central Excise

Refund claim - clearances made to SEZ units - physical exports or not - refund claim filed beyond time limit of one year prescribed under Section 11B of Central Exercise Act, 1944 - Appeal against confirmation of the recovery of the amount - Confirmation of demand of interest. Appeal against confirmation of the recovery of the amount - HELD THAT - It is brought out from facts that the appellant has already repaid the amount. The Commissioner (Appeals) in the impugned order has given the liberty to the appellant to avail recredit. The Ld. Counsel has brought to our notice that the appellant has repaid the amount and then availed recredit on 23.03.2014. In such circumstances, appeals have become infructuous. These appeals are dismissed as infructuous. Confirmation of demand of interest - HELD THAT - The credit availed by the appellant is eligible. Rule 5 provides for an assessee to get refund of the unutilized cenvat credit in case of exports. This is a beneficial provision to facilitate exports. By filing the claim belatedly, the appellant has lost the benefit of refund. The department has not adduced any evidence to establish that there is suppression of facts on the part of the appellant. There are no ingredients for invoking the extended period for demand of interest. The demand of interest is time barred and requires to be set aside. Appeals disposed off.

Summary

Issues involved:
Refund claim rejection on the grounds of being time-barred, demand of interest on erroneous refund, jurisdiction of Commissioner (Appeals) in deciding appeals, applicability of Section 11B of Central Excise Act, 1944 to refund claims, invocation of extended period for demanding interest.

Analysis:

1. Refund Claim Rejection - Time Bar:
The appellant filed a refund claim for exports made from April 2008 to June 2009. The original authority sanctioned the refund, but the department appealed, citing the claim as time-barred under Section 11B. The Commissioner (Appeals) set aside the refund, leading to subsequent appeals. The appellant argued that the department raised a new ground of time bar beyond the original show cause notice, relying on precedents that an appellate authority cannot exceed the scope of the notice. The Tribunal dismissed the appeals related to the refund rejection as infructuous due to the appellant repaying and recrediting the amount.

2. Demand of Interest on Erroneous Refund:
A separate notice demanded interest on the refunded amount, invoking the extended period. The appellant contended that the demand was time-barred, as the department was aware of all facts, and the reason for rejection was the time bar. The Tribunal found no evidence of suppression of facts and held the demand of interest to be time-barred. Thus, the appeal against the demand of interest was allowed with consequential reliefs.

3. Jurisdiction of Commissioner (Appeals) and Applicability of Section 11B:
The appellant argued that the Commissioner (Appeals) exceeded jurisdiction by considering a new ground of time bar not in the original notice. The Tribunal referred to legal precedents and emphasized that the department cannot go beyond the show cause notice. The department relied on Section 11B to support the time bar rejection. However, the Tribunal found the rejection proper due to the late filing, dismissing the related appeals as infructuous.

4. Invocation of Extended Period for Demand of Interest:
The department issued a notice for interest demand invoking the extended period. The appellant contended that the demand was time-barred, as the department had prior knowledge and the refund rejection was based on the time bar. The Tribunal agreed, setting aside the demand of interest as time-barred and upholding the appellant's repayment and recredit actions.

In conclusion, the Tribunal dismissed appeals related to refund rejection as infructuous, allowed the appeal against the demand of interest due to being time-barred, and emphasized the limitations on appellate authorities to consider only issues raised in the original show cause notice.