2024 (8) TMI 201 - AT - Central Excise

Refund of the excess tax paid - refund was proposed to be recovered by invoking the extended period of limitation - refund sanctioned order till date not challenged by Revenue - HELD THAT - This issue is no more res integra as the same is covered by the majority decision of the Tribunal in the case of MEDLEY PHARMACEUTICALS LIMITED VERSUS CCE S.T. -CHANDIGARH-I 2018 (4) TMI 1495 - CESTAT CHANDIGARH where it was held that 'denying and demanding the wrongly availed self-credit on first instance is not sustainable. Admittedly, the appellant followed the correct procedure on the second time though on the first instance they have wrongly taken direct self-credit.' Further it is found that since the department has not challenged the refund sanctioned order till date and in the absence of challenge to the refund sanction order, the refund cannot be rejected as held by the Hon'ble Gauhati High Court in the case of COMMISSIONER OF CENTRAL EXCISE, VERSUS M/S. JELLALPORE TEA ESTATE, 2011 (3) TMI 11 - GAUHATI HIGH COURT . It is further found that the entire demand is also barred by limitation as the department has failed to establish the ingredients for invoking the extended period as provided in Section 11A sub-section (4) of the Central Excise Act, 1944, therefore, on this point also, the impugned order is bad. The impugned order is not sustainable in law and is thus set aside - appeal allowed.

Summary

Issues:
1. Appeal against rejection of refund due to alleged excess tax payment.
2. Applicability of judicial precedents and legal provisions.
3. Challenge to refund sanction order and limitation period.

Analysis:
1. The appeal was filed against the rejection of a refund claim by the Commissioner (Appeals) based on an alleged excess tax payment by the appellant. The appellant contended that the excess tax was due to sales returns and had corrected the balance sheet accordingly. The extended period of limitation was invoked to recover the refund already sanctioned. The appellant argued that the self-credit claimed was based on the actual amount paid by them, and legal precedents supported their position, citing the case of M/s Medley Pharmaceutical Ltd vs. CCE & ST Chandigarh-I. The Tribunal found that the issue was settled by the majority view in the mentioned case, emphasizing that the refund cannot be rejected even if a higher duty was paid than what was payable.

2. The appellant further argued that the department had not challenged the refund sanction order, and therefore, the refund could not be rejected. Citing the case of CCE, Shillong vs. Jellalpur Tea Estate, the appellant highlighted the importance of following the prescribed legal procedures. Additionally, the appellant referred to the case of M/s Ravi Crop Science vs. CCE, Jammu, which stated that if the refund sanction order was not challenged, it could not be recovered through a show cause notice. The Tribunal agreed with these arguments, emphasizing the significance of challenging refund sanction orders and following statutory remedies.

3. The Tribunal also considered the issue of limitation, noting that the entire demand was barred by limitation as the department failed to establish the grounds for invoking the extended period as per Section 11A sub-section (4) of the Central Excise Act, 1944. By analyzing the submissions and legal precedents, the Tribunal concluded that the impugned order was not sustainable in law. Therefore, the Tribunal set aside the order, allowing the appeal of the appellant with any consequential relief as per the law. The judgment highlighted the importance of adherence to legal procedures, precedent, and statutory limitations in matters concerning tax refunds and recovery.