2014 (10) TMI 17 - AT - Central Excise

CENVAT Credit - Denial of refund claim - Whether the appellant was correct in taking credit on his own in respect of amount paid by him in excess in October 2001 and whether on denial of such credit, whether he can file refund claim - Held that - appellant did pay an excess amount of duty in October 2001 debiting the same in modvet account. This error was noticed by them in October 2004 and by a letter informing the Range Superintendent and Jurisdictional Assistant Commissioner and after a lapse of one month, they took credit in the modvat account in October 1994. In our view, availing credit of the excess duty paid through modvat account after a lapse of three years, that too suo moto, seems to be incorrect as there is nothing indicated in the records that the duty was recovered by them or otherwise. It is also noticed that the appellant had on their own paid up the said amount as directed by the lower authorities alongwith interest on 24.08.2005 hence the said credit and subsequent reversal has squared up the demands which has been raised on the appellant - Refund is correctly rejected by the lower authorities as the provisions of Section 11B of Central Excise Act, 1944, mandates an assessee to claim the refund of any excess duty paid within a period of one year from the date of payment of such duty. - Decided against assessee.

Summary

Issues:
1. Restoration of appeal dismissed for non-prosecution.
2. Availment of Cenvat Credit and subsequent recovery of excess amount.
3. Rejection of refund claim due to limitation under Section 11B of the Central Excise Act, 1944.

Analysis:
1. The appeal was initially dismissed for non-prosecution but later restored. The issue was taken up promptly due to its narrow compass.
2. The appellant, engaged in manufacturing iron and steel goods, mistakenly debited an amount of Cenvat Credit in October 2001 but re-credited it in October 2004 without following proper procedures. The Joint Commissioner disallowed the credit, leading to rejection of the refund claim by the Assistant Commissioner.
3. The appellant argued that they correctly availed the Cenvat Credit based on CVD payment and fulfilled the conditions for credit availment. They cited a High Court decision on limitation starting from the discovery of the mistake. The Departmental Representative contended that the claim was time-barred under Section 11B.
4. The Tribunal noted the appellant's error in debiting excess duty in 2001 and re-crediting it in 2004 without proper documentation or recovery indication. The appellant had already paid the disputed amount and interest, settling the issue.
5. The Tribunal upheld the rejection of the refund claim as it exceeded the one-year limit under Section 11B. The first appellate authority's decision to reject the appeals was deemed correct, and no interference was warranted.
6. Ultimately, the appeals were rejected, affirming the lower authorities' decisions. The judgment was pronounced on 25.3.2014 by the Appellate Tribunal CESTAT Ahmedabad.