2012 (10) TMI 71 - CGOVT - Central Excise

Rebate claim refund claim was time barred as it was filed after the time limit specified under Section 11B of Central Excise Act, 1944 Held that - Rebate claim was rightly rejected as time barred. Once the claim is rejected as time barred the allowing of re-credit in Cenvat account of duty paid on exported goods, is legally incorrect as it would amount to allowing rebate - rebate claim was rightly rejected as time barred but the re-credit of duty paid in Cenvat account is not admissible - revision application succeeds

Summary

Issues Involved:
1. Timeliness of the rebate claim under Section 11B of the Central Excise Act, 1944.
2. Legality of allowing re-credit of duty paid on exported goods when the rebate claim is time-barred.

Detailed Analysis:

1. Timeliness of the Rebate Claim:
The primary issue revolves around whether the rebate claim filed by the assessee was within the permissible time limit as prescribed under Section 11B of the Central Excise Act, 1944. The relevant facts are that the goods were shipped on 28-9-2006, and the rebate claim was filed on 23-11-2007, exceeding the one-year limitation period.

The Assistant Commissioner initially rejected the rebate claim as time-barred but allowed the assessee to restore the credit of duty paid. The department appealed, arguing that the Assistant Commissioner exceeded his jurisdiction by permitting the re-credit.

The Commissioner (Appeals) rejected the department's appeal, citing that the rebate claim should not be dismissed on technical grounds and relied on the Gujarat High Court's decision in M/s. Cosmonaut Chemicals v. U.O.I., which stated that exceptions to the one-year limit could be made if the delay was due to circumstances beyond the claimant's control, such as departmental delays.

However, the revision application by the department emphasized that the limitation period prescribed by Section 11B is mandatory and must be adhered to, as supported by several judicial precedents, including the Supreme Court's ruling in Collector of Central Excise, Chandigarh v. Doaba Co-op Sugar Mills Ltd., which stated that claims for refunds must strictly adhere to the statutory period of limitation.

2. Legality of Allowing Re-Credit of Duty Paid:
The second issue concerns whether the adjudicating authority was correct in allowing the re-credit of duty paid on exported goods despite rejecting the rebate claim as time-barred. The department contended that allowing re-credit effectively amounted to granting a rebate, which contradicts the rejection of the rebate claim on the grounds of being time-barred.

The revision application highlighted that the Assistant Commissioner's decision to allow re-credit created a self-contradiction and was legally incorrect. The government observed that the statutory requirement of filing the claim within one year was not met, and thus, the rebate claim was rightly rejected as time-barred.

The government also noted that as per the C.B.E.C. Manual of Supplementary Instructions, the rebate claim should have been filed within the stipulated time, even without the Export Promotion copy, to avoid being time-barred. The failure to comply with this statutory requirement invalidated the claim.

Conclusion:
The government concluded that the rebate claim was correctly rejected as time-barred. Furthermore, allowing the re-credit of duty paid on exported goods was legally incorrect and amounted to granting a rebate. Therefore, the order-in-appeal was set aside, and the order-in-original was modified to reject the rebate claim entirely without permitting re-credit. The revision application succeeded, and the rebate claim was ultimately denied in full.

Final Orders:
- The rebate claim was rightly rejected as time-barred.
- The re-credit of duty paid in the Cenvat account is not admissible.
- The impugned order-in-appeal is set aside.
- The order-in-original is modified to completely reject the rebate claim.
- The revision application is allowed.