2009 (9) TMI 361 - AT - Central Excise

Refund- Limitation- The appellant are engaged in the manufacture of M.S. Ingots, Alloy Steel Ingots and casting of M.S. Steel. After scrutiny of the resumed records and conducting some inquiry, a show cause notice was issued to the appellant. However even before the issue of show cause notice on 4-5-01 itself, the appellant had paid an amount of Rs.8,00,000. The Appellant filed the appeal to the Tribunal. On the basis of the Tribunal s final order the appellant vide their letter/application dated 10-11-04 requested for allowing the re-credit of the amount of Rs.8,00,000/- which had been debited by them. As regards the duty demand of Rs.1,59,206/- and penalty of Rs.20,000/- which was upheld by the Tribunal, the appellant had paid the entire amount of duty and penalty on 9-11-04 and interest on 31-12-04. The Assistant Commissioner, however, vide order-in-original dated 9-2-05 rejected the aforesaid refund claim on the ground that the amount which was paid by the appellant through debit entry No. 17 dated 4-5-01 in the Cenvat credit account, cannot be considered as pre-deposit under Section 35F and hence for its refund, the refund application as per the provisions of Section 11B should have been filed. The appellant filed an appeal to Commissioner (Appeals) against the above order-in-original and the Commissioner (Appeals) vide the impugned order-in-appeal upheld the Assistant Commissioner s order. It is against this order that the present appeal has been filed. In the light of the various decisions held that- when the duty is paid under protest, the period of limitation would start to run from the date of final decision in the assessee s own case. Since in this case, the appeal was decided by the Tribunal in favour of the Appellant, on 28-10-04, the limitation period for filing refund application under Section 11B has to be counted from 28-10-04 and since the refund application has been made on 10-11-04, the same is within time. Since the refund claim is of Cenvat credit debited on 4-1-05 in RG 23A Pt. II account, in view of clause (c) of 1st proviso to Section 11B(2) of principles of unjust enrichment will not be applicable. Thus, the impugned order upholding the rejection of the refund claim is not correct and hence, the same is set aside. The appeal is allowed.

Summary

Issues:
Refund claim rejection based on payment mode and timing.

Analysis:
The case involved an appeal against the rejection of a refund claim of Rs.8,00,000 filed by the appellant. The appellant had paid the amount through a debit entry much before the issuance of a show cause notice. The Commissioner confirmed a duty demand, but the Tribunal later reduced the demand to Rs.1,59,206. The appellant sought a refund of the debited amount based on the Tribunal's decision. The main issue was whether the refund application, made after the Tribunal's order but beyond one year from the debit date, was time-barred under Section 11B.

The appellant argued that the amount was paid under protest, citing relevant case laws. The Tribunal considered previous judgments and the principle of payment under protest. It noted that when duty is paid under protest, the limitation period for a refund application starts from the final decision date. As the Tribunal's decision was in favor of the appellant, the refund application made within one month of the decision was deemed within the limitation period. The Tribunal also highlighted that unjust enrichment principles did not apply in this case due to the nature of the refund claim.

Ultimately, the Tribunal set aside the rejection of the refund claim, stating that the refund application was not time-barred. The decision emphasized the importance of considering payments made under protest and the relevant limitation periods for refund applications. The appeal was allowed in favor of the appellant.

This detailed analysis of the judgment highlights the key legal arguments, case laws, and principles considered by the Tribunal in reaching its decision to allow the appeal and grant the refund claim.