2024 (9) TMI 305 - AT - Central Excise

Refund claim - Time Limitation - interpretation of Clause (ec) of explanation of Section 11B of CEA - Cenvat Credit on insurance premium. HELD THAT - A plain reading would indicate that while there will be no limitation if duty has paid under protest as long as the matter is pending before any Appellate Fora, Court etc., but once they decide the matter and the refund becomes eligible to the appellant as a consequence of said judgment then the date of that judgment itself becomes the starting point for deciding the limitation of one year under Section 11B. In this case, the order of the Commissioner (Appeals) of 31.03.2010 itself was the relevant date when the decision went in favour of the appellant and no further appeal was filed by the appellant and they could have taken the credit in their books of account as there was no provision for cash refund under existing law. Apparently, the appellants did not file for any refund or re-credit before the proper authority after the passing of the order by the Commissioner (Appeals). While the general provision of non applicability of limitation would not be applicable in such cases where payment has been made under protest but after insertion of Clause (ec), irrespective of whether payment of duty was under protest or otherwise, the refund claim arising out of such orders passed by Appellate Authority has to be made within one year of such order. Even reliance under Section 142(3) of CGST Act, 2017 is not correct as such cases where the refunds were otherwise permissible under existing law can only be covered under said provision. In this case, it was clearly a time barred case within existing law prior to appointed date itself. The Commissioner (Appeals) order rejecting the appeal filed by the appellants on the reasons and the cited legal provisions, does not suffer from any infirmity in the facts of the case and is sustainable. There is a clear default of limitation in filing of refund application by appellant and hence not eligible to get the said refund under Section 11B of Central Excise Act. Appeal dismissed.

Summary

Issues:
1. Eligibility for Cenvat Credit on insurance premium.
2. Refund claim rejection based on limitation under Section 11B of Central Excise Act.

Detailed Analysis:
1. The appeal involved the eligibility of the appellant for Cenvat Credit on insurance premium. The Department contended that the credit availed on medical insurance was irregular under Rule 2(1) of Cenvat Credit Rules 2004. The Original Authority disallowed the credit, leading to an appeal before the Commissioner (Appeals). The Commissioner (Appeals) held that the appellants were indeed eligible for the credit, a decision upheld by the Tribunal, which rejected the Department's appeal. The issue of refund arose subsequently, concerning a sum cleared by the appellants post the favorable orders. The Original Authority rejected the refund claim citing limitation under Section 11B of the Central Excise Act.

2. The key issue revolved around the rejection of the refund claim based on limitation. The Original Authority held that the refund application was time-barred from the date of the Tribunal's order in 2016. The Commissioner (Appeals) analyzed Section 11B and relevant legal provisions, noting the provision exempting limitation in cases of payment made under protest. However, he emphasized that the relevant date for seeking refund post a judgment or order is crucial. The Commissioner relied on the Punjab & Haryana High Court judgment in Malwa Industries case to support the view that the final order date becomes significant for limitation purposes. Despite arguments by the appellants regarding exclusion from time limit under Section 11B and provisions for cash refund, the Commissioner upheld the rejection, emphasizing the appellants' failure to file within the prescribed period.

In conclusion, the Commissioner (Appeals) dismissed the appeal, highlighting the appellants' default in meeting the limitation requirements under Section 11B. The judgment emphasized the significance of the final order date in cases of refund eligibility post-appellate decisions, reinforcing the adherence to statutory time limits for refund claims.