2012 (7) TMI 503 - AT - Service Tax

Cenvat credit refund duty paid under protest - department took objection for the debiting of interest amount in the cenvat account - refund claim for the excess amount paid Held that - Original debit in the cenvat account was under protest and the second payment was made since, the department objected to debiting of interest in the cenvat account - Second payment has to be taken as part of the payment made originally and it cannot be said that there was no protest as regards the second payment when it was rectification of an error committed in debiting the interest amount in the cenvat account - amount paid by the appellant has to be treated as paid under protest - original adjudicating authority s decision to allow the refund by way of credit in the cenvat account is correct pre-deposit waived

Summary

Issues:
1. Appellant's refund claim rejected on the ground of limitation under Section 11B of Central Excise Act, 1944.

Analysis:
The appellant had initially paid service tax, Education Cess, and interest, which was confirmed and appropriated in an order-in-original. Subsequently, the appellant debited the interest amount separately after objections were raised by the department. The matter went into litigation, and the liability of service tax was finalized by the Tribunal's order. The appellant then filed a refund claim for the excess amount paid, which was allowed by the original adjudicating authority. However, the Revenue filed an appeal against this decision, leading to the Ld. Commissioner rejecting the refund claim on the basis of being beyond the limitation period under Section 11B.

The Ld. Chartered Accountant representing the appellant argued that the debits in the cenvat account were made under protest, thus exempting them from the time limit under Section 11B. It was contended that the time limit should be calculated from the date of the Tribunal's order, not the Order-in-Original. Despite this argument, the appellate authority upheld the Revenue's appeal, citing the refund claim submission beyond one year from the Order-in-Original as the reason for rejection.

During the hearing, it was determined that the issue primarily revolved around the limitation under Section 11B and could be decided without the need for a pre-deposit. Upon considering both sides' submissions, it was revealed that the appellant had clearly stated in a letter to the Superintendent that the amounts were debited under protest. The Superintendent objected to the interest debit in the cenvat credit, leading to a subsequent cash payment by the appellant. The Ld. A.R. argued that the second payment in July 2006 was not made under protest. However, it was established that the original debit and subsequent payments were made under protest due to objections raised by the department. Therefore, the entire amount paid by the appellant was deemed to be under protest. Consequently, the original adjudicating authority's decision to allow the refund was upheld, and the impugned order rejecting the refund claim was set aside.

In conclusion, the judgment favored the appellant by recognizing the payments as made under protest, thereby exempting them from the limitation under Section 11B and upholding the refund claim.