2024 (9) TMI 1070 - AT - Central Excise

Refund of duty - whether the appellant have complied with the conditions of the Notification No. 12/2012-CE dated 17.03.2012 or not? - time limitation - Vehicle having a passenger capacity of less than 13 persons and gets registered as Taxi. Procedural lapses and their impact on the refund claims - HELD THAT - The basic condition for claiming the benefit of N/N. 12/2012-CE dated 17.03.2012 is that if the vehicle having a passenger capacity of less than 13 persons and gets registered as Taxi with the State Regional Transport authority, the applicable rate of excise duty is reduced by 20% and the same has to be refunded to the manufacturer and who in turn will refund to the dealer and finally to the ultimate customer. There is no denying of the fact that refunds which have been filed by the appellant fulfill all the conditions of the exemption N/N. 12/2012-CE dated 17.03.2012, prescribed under condition number 26 of the serial number 273 except that they have taken credit in PLA on 22.03.2018 i.e. after the period of six months from the payment of duty on the motor vehicles. The basic requirement is that vehicle has to be used as Taxi for the purpose of availment benefit of the exemption notification. This condition has properly been fulfilled and all the relevant documents have been provided by the appellant to the department while filing the refund claims. The credit taken in PLA beyond the period of six months is only a procedural lapse and same cannot enable the department to reject the entire refund claims of the appellant, when the legislature provides that where after clearances of vehicles from the factory gate, a vehicles is used as Taxi. Same is entitled for concessional Excise Duty. Thus the substantive benefit of exemption notification cannot be denied to the appellant only on procedural lapse which has been made good at a later stage by the appellant. Time limitation - rejection of refund claims of the appellant on the ground that the refund claim is hit by time bar inasmuch as no claim has been filed within six month from the date of clearances of the said motor vehicles - HELD THAT - It is found from the record that the findings of the Commissioner (Appeals) are factually incorrect as the refund claims have been filed from 01.07.2017 to 27.12.2017 for clearances which have been affected from January 2017 to June 2017 - the condition normally mentioned that period of six months is applicable from the date of duty paid on the motor vehicles which have been cleared and which at a later dated registered as TAXI with the Regional Transport department. It is found that condition 26 of the said notification stands fully complied with the requirement and the refund claim is not barred by period of limitation. The SCN nowhere alleges that the refunds have not been filed within a given time period as provided under condition number 26 of the aforesaid notification. Thus it clearly appears that the order-in-appeal has travelled beyond the allegations which have been made in the show cause notice. Therefore, the finding on time-bar given by the Commissioner (Appeals) is otherwise also legally not sustainable. The impugned order-in-appeal is legally not sustainable - appeal allowed.

Issues Involved:

1. Compliance with the conditions of Notification No. 12/2012-CE dated 17.03.2012.
2. Procedural lapses and their impact on the refund claims.
3. Time-bar on the refund claims.
4. Whether the Commissioner (Appeals) traveled beyond the issues raised in the show cause notice.

Issue-wise Detailed Analysis:

1. Compliance with the conditions of Notification No. 12/2012-CE dated 17.03.2012:

The appellant filed 50 refund claims for 20% of Central Excise duty and infrastructure cess on motor vehicles registered as taxis, as per Notification No. 12/2012-CE dated 17.03.2012. The department contended that the appellant did not fulfill condition number 26 of the notification, which requires the manufacturer to take credit of the excess duty in the Account Current and file a refund claim within six months from the date of duty payment. The appellant argued that they fulfilled all substantive conditions, including providing necessary documents such as invoices, taxi registration certificates, and declarations from the dealer. They claimed that the impugned order is legally unsustainable as the conditions were met at a later date after filing the refund claim.

2. Procedural lapses and their impact on the refund claims:

The appellant contended that procedural lapses should not deny substantive benefits. They cited several judgments, including Hari Chand Shri Gopal, Mangalore Chemicals, Madhav Steel, and Kamakhya Steel, to support their claim that procedural requirements should not overshadow the substantive compliance. The Tribunal agreed, stating that the basic requirement of the vehicle being used as a taxi was fulfilled, and all relevant documents were provided. The Tribunal emphasized that the credit taken in PLA beyond six months was a procedural lapse and should not lead to the rejection of the entire refund claims.

3. Time-bar on the refund claims:

The Commissioner (Appeals) rejected the refund claims on the grounds that they were time-barred, as the credit in PLA was not taken within six months of clearance. The Tribunal found this reasoning factually incorrect, noting that the refund claims were filed within six months from the date of duty payment. The Tribunal cited the condition in Notification No. 12/2012-CE, which requires filing the refund claim within six months from the date of duty payment, and concluded that the claims were not barred by limitation.

4. Whether the Commissioner (Appeals) traveled beyond the issues raised in the show cause notice:

The appellant argued that the issue of time-bar was not raised in the show cause notice and that the Commissioner (Appeals) traveled beyond the issues raised. The Tribunal agreed, stating that the show cause notice did not allege that the refunds were not filed within the stipulated time period. Therefore, the finding on the time-bar was legally unsustainable.

Conclusion:

The Tribunal set aside the impugned order-in-appeal, holding that the appellant complied with the substantive conditions of the notification and that procedural lapses should not deny the refund claims. The Tribunal also found that the refund claims were not time-barred and that the Commissioner (Appeals) had traveled beyond the issues raised in the show cause notice. The appeal was allowed.

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