2012 (9) TMI 203 - AT - Service Tax

Denial of refund claim as time-barred - dispute of eligibility of CENVAT credit - Held that - As there was a dispute of eligibility of CENVAT credit availed by assessee which was settled in their favour on 28.1.2009 within one year of the said order they have filed the refund claims and as per clause (6) of the Notification No.5/06 the appellants are required to file refund claim within one year as stated in Section 11B of the Central Excise Act, 1944 the appellants are entitled for refund from the relevant date i.e. settlement of the dispute between the parties - in favour of assessee.

Summary

Issues:
Appeal against dismissal of refund claims for not filing within one year of duty paid.

Analysis:
The appellants, being 100% EOU, availed credit on inputs and input services during manufacturing and subsequently exported the goods. Initially, SCNs were issued for reversal of CENVAT credit, which was later settled in favor of the appellants by the Commissioner (Appeals) on 28.1.2009. The appellants filed refund claims on 13.8.2009 and 5.11.2009 for the period April 2007 to September 2008, which were denied as time-barred under Notification No.5/06. The main contention was whether the appellants were entitled to refund claims post the settlement of the dispute regarding CENVAT credit eligibility. The learned counsel argued that the refund claims were filed within one year of the settlement, relying on precedents like CCE Indore Vs Indorama Exports and Dena Snuff Pvt. Ltd. The opposing view emphasized strict interpretation of the notification, citing cases like CCE Hyderabad Vs Sunder Steels Ltd. and Utttam Industries Vs CCE Haryana.

The Tribunal noted that the settlement of the dispute on 28.1.2009 was pivotal as it clarified the eligibility of the CENVAT credit availed by the appellants. The requirement to file refund claims within the time prescribed under Section 11B of the Central Excise Act was highlighted. The Act mandates filing within one year from the relevant date, with an exception for duty paid under protest. The Tribunal agreed with the appellants that the dispute resolution date was crucial, not the date of credit availment, as per the principle established in the case of Indorama Exports. Therefore, the appellants were deemed entitled to the refund from the date of dispute settlement. Consequently, the appeals were allowed, granting the appellants consequential relief.

This judgment clarifies the significance of dispute resolution dates in determining the eligibility for refund claims under CENVAT credit rules. It emphasizes the importance of adhering to statutory timelines while allowing exceptions in cases where disputes impact the refund claim filing process. The decision aligns with established legal principles and precedents, ensuring fair treatment for taxpayers in similar situations.