2013 (5) TMI 627 - AT - Central Excise

Rejection of Refund claim - Wrong availment of modvat credit Demand of duty/penalty/ - The appellant preferred an appeal against the above order-in-appeal before CESTAT, who allowed the appeal for Rs.19,984/- out of Rs.67,713 and also reduced penalty to Rs.2,500 from Rs.7,000 and accordingly refund claim was filed which was rejected on the ground that the same was filed beyond the time prescribed u/s 11B of the Central Excise Act 1944. Appellant submits that the refund claim is for the amount deposited at the same time challenging the decision to reject the claim. He submits that the amount deposited has to be treated as one paid under protest and therefore the time limit u/s 11B would not be applicable. He relies upon the decision of the Tribunal to submit that when the appellants make payments while challenging the demand that is to be treated as payment under protest. Held that - Tribunal had considered the amended Section and since the refund claim in that case was filed within one year from the date of amendment, treated the same as a liberal consideration of provisions and decided that the refund claim should be allowed. Proviso introduced in 2007 is applicable in respect of past cases also and the only view or interpretation in favour of the appellant that can be taken is that from the date of amendment, refund claim should have been filed within one year ignoring the earlier period when according to the provisions existing at that time, there was no time limit for refund claim. Payment under this case has not been made under protest and refund claim filed by the appellant is also delayed. Thus, the appeal is rejected.

Summary

Issues:
1. Time limit for filing a refund claim under Section 11B of the Central Excise Act, 1944.
2. Treatment of payment made under protest in relation to refund claims.

Analysis:

Issue 1: Time limit for filing a refund claim under Section 11B of the Central Excise Act, 1944:
The case involved a refund claim filed by the appellant based on a CESTAT order dated 05.12.2005. The Lower Authority rejected the refund claim as being time-barred under Section 11B of the Central Excise Act, 1944. The appellant argued that the amount deposited should be considered as paid under protest, exempting it from the time limit under Section 11B. The Tribunal referred to previous decisions, such as Maihar Cement vs. Commissioner of Central Excise, Bhopal, to establish that payments made under challenge are treated as payments under protest. However, the Tribunal clarified that Section 11B would still apply to refund claims, as all cited decisions discussed the provisions of Section 11B. The Tribunal also noted that the time limit under Section 11B was not applicable to consequential refunds, but this decision was rendered before the relevant amendment.

Issue 2: Treatment of payment made under protest in relation to refund claims:
The appellant contended that the refund claim should not be time-barred as the payment was made under protest. The Commissioner (Appeals) relied on the definition of 'relevant date' in Section 11B(5)(B)(ec), introduced by the Finance Act 2007. The Commissioner held that the refund claim filed in 2009, based on a 2005 Tribunal order, was time-barred post the 2007 amendment. The Tribunal upheld this view, citing a case where a refund claim was allowed as it was filed within one year of the introduction of the new provision. The Tribunal emphasized that the amended provision should be applied even to past cases and that the refund claim in this instance was significantly delayed. As the payment was not made under protest and the refund claim was not filed within one year from the relevant date per Section 11B, the appeal for the refund claim was rejected.

In conclusion, the Tribunal upheld the rejection of the refund claim, emphasizing the application of the time limit under Section 11B and the significance of filing refund claims within the prescribed period, especially after relevant statutory amendments.