2024 (10) TMI 1395 - AT - Central Excise

Determination of date of filing of Refund Application - Refund in respect of the duty paid by their Daman unit (appellant) which is liability of their Halol unit - mistake has occurred due to error of ERP system which is meant for all the group units - computation of time period of one year provided under Section 11B for refund of duty should be computed as on date of first time of filing of refund or on the date of second time filing of refund after return of the refund by the department - time limitation - HELD THAT - As regard the admissibility of the refund there is no dispute that the duty liability of halol unit was paid by the appellant s Daman unit due to error in the ERP system. Therefore, the duty paid in access by the appellant unit is clearly refundable to them in principle. Somewhat identical issue has been considered by the Hon ble Gujarat High Court in the case of Auro Pumps Private Ltd 2017 (7) TMI 24 - GUJARAT HIGH COURT wherein Hon ble Court after considering the identical facts, where it was held that ' this is a case of issuing appropriate mandamus for calling upon the authorities to treat the payment of Rs. 5,10,573/- against Code No. 002 from the date on which, it was paid resulting into exempting the petitioners from any coercive liability of so called non-payment against Code No. 002. All the communications and order, which are impugned in the petition are hereby quashed and set aside.' Time limitation - HELD THAT - There is no dispute that the appellant have initially filed the refund claim within one year from the relevant date, it is only after the department raised some discrepancies, the appellant have re-filled the refund second time. Therefore, in this fact the date of first time filing of the refund has to be considered as date of filing of refund application which is well within the time. Therefore, the refund is not time barred in the facts of the present case. It is settled that date of first time filing of refund shall be taken as date of filing of refund even though the refund application was returned and subsequently the same is re-filled at a later date. Accordingly, in the identical facts in the present case applying the ratio of above judgments, the refund is not time barred. The Appellants have challenged the said Order in Appeal on the grounds that the Ld. Commissioner (Appeals) has no power to remand and also on the merits of the matter - the issue on Ld. Commissioner (Appeals) has power to remand the matter or not, this Tribunal in catena of judgments considering the amendments in Central Excise Act, 1944, held that Commissioner (Appeals) has power to remand the matter. The impugned orders are set aside - Appeal allowed.

Summary

Issues Involved:

1. Entitlement of the appellant to a refund for duty mistakenly paid by their Daman unit, which was the liability of their Halol unit.
2. Determination of the relevant date for computing the one-year time limit for filing a refund under Section 11B of the Central Excise Act, 1944.

Issue-wise Detailed Analysis:

1. Entitlement to Refund:

The primary issue was whether the appellant was entitled to a refund for the duty paid by their Daman unit, which was actually the liability of their Halol unit. The payment error was attributed to a mistake in the ERP system used by the group units. The Tribunal found no dispute regarding the fact that the duty liability of the Halol unit was mistakenly paid by the Daman unit. Citing the judgment in *Auro Pumps Pvt. Ltd. vs. Union of India*, the Tribunal noted that when a payment is made under a mistaken code or unit, it should not result in a technical defect that burdens the payer with liability. The Tribunal concluded that the duty paid in excess by the appellant's Daman unit is refundable in principle, as supported by precedents like *Devang Paper Mills Pvt. Ltd. vs. Union of India*, where similar circumstances led to the quashing of the impugned communications and orders.

2. Computation of Time Period for Refund:

The second issue was whether the time period for filing a refund claim should be calculated from the date of the first filing or the second filing after the department returned the initial claim. The appellant argued that the initial filing date should be considered, as it was within the one-year limit stipulated by Section 11B of the Central Excise Act, 1944. The Tribunal agreed with this position, referencing judgments such as *Nokia India Sales Pvt. Ltd. vs. CC* and *Bhandiguri Tea Estate vs. CCE*, which established that the date of the first filing should be recognized for the purposes of limitation. The Tribunal found that since the appellant initially filed the refund claim within the one-year period and only re-filed due to departmental discrepancies, the refund claim was not time-barred.

Additional Considerations:

The Tribunal also addressed the appeal against the order of the Commissioner (Appeals), who had remanded the matter. The appellant contested the remand, arguing that the Commissioner (Appeals) lacked the authority to do so. However, the Tribunal upheld that, based on amendments to the Central Excise Act, 1944, the Commissioner (Appeals) does have the power to remand cases. Consequently, the Tribunal allowed the appeal on merits, reinforcing that the appellant's refund claim was valid and not time-barred.

Conclusion:

The Tribunal set aside the impugned orders and allowed the appeals with consequential relief, affirming the appellant's entitlement to the refund and recognizing the initial filing date for the refund claim as within the statutory time limit.