2024 (8) TMI 584 - AT - Central Excise

Refund/rebate claim - rejection of refund on the ground that no refund can be claimed on the same issue where already rebate orders has been passed on the FOB value - HELD THAT - The Tribunal in the case of M/S. UTTAM GALVA STEELS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIGAD 2017 (5) TMI 692 - CESTAT MUMBAI has dealt with this issue in detail and held that ' the filing of refund is a fresh case which cannot be pursued by appeal remedy. Therefore, the contention of the lower authorities regarding the non-filing of the appeal is not sustainable. As regards time bar, the refund of duty arose only after the decision of the rebate claim whereby the rebate was reduced. Therefore, the period for filing refund is reckoned from the date of rebate sanctioning order and not from the date of payment of duty.' Hon'ble High Court of Gujarat in the case of GARDEN SILK MILLS LTD VERSUS UNION OF INDIA 2018 (2) TMI 15 - GUJARAT HIGH COURT , while allowing the appeal held that ' Government observes that the applicant is entitled for the take (sic) credit in their cenvat account in respect of the amount paid as duty on freight insurance charges. The applicant was not even required to make a request with the department for allowing this recredit in their cenvat account. The adjudicating officer/Commissioner (Appeals) could have themselves allowed this instead of rejecting the same as time-barred.' The appellant is entitled to the refund claims made. Consequently, the impugned order is set aside. The appeal is allowed.

Summary

Issues:
Whether a refund can be claimed on an issue where a rebate order has already been passed and whether the recourse left to the appellant was to file an appeal against the Order-in-Original (OIO) within the stipulated time.

Analysis:
The appeal challenged an Order in Appeal passed by the Commissioner of Central Excise, Chennai, concerning refund claims filed by the appellants, who are engaged in the manufacture of carbon brushes. The appellants filed refund claims under section 11B of the Central Excise Act, 1944, for duty paid on the CIF value of export. The department rejected the refund claims, citing that rebate orders had already been passed on the FOB value via separate Order-in-Originals (OIO's). The appellants were advised to appeal against the OIO's within the stipulated time. The main contention was whether the appellants could claim a refund without appealing the OIO's. The appellant's counsel argued that the rejection based on failure to appeal the OIO's was baseless as the refund claims were filed within the specified time limit. The counsel cited precedents, including a decision by the Tribunal and a judgment of the High Court, to support the appellant's position.

The Tribunal referred to a previous case involving Uttam Galva Steels Ltd., where it was established that a refund claim can be made if the rebate claim is denied, even without challenging the sanction order. The Tribunal clarified that the filing of a refund claim is a fresh case and not subject to the appeal remedy. The period for filing a refund is determined from the date of the rebate sanctioning order. Additionally, the High Court of Gujarat, in a case involving Garden Silk Mills Ltd., highlighted the entitlement of applicants to claim recredit entry in their cenvat account for duty paid on post-clearance expenses like freight and insurance charges. The Government order emphasized that such recredit should have been allowed without the need for a specific request from the applicant. The Tribunal, following the precedent set by these decisions, concluded that the appellant was entitled to the refund claims made. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief, in accordance with the law.