2016 (3) TMI 998 - AT - Central Excise

Refund claim rejected - bar of limitation - Relevant date - rejection on account of limitation as in respect of the period April, 2003 to June, 2004, the refund claim was filed on 20.10.2007 - Held that - Definition of relevant date as given in clause (a) of Explanation B to Section 11B in respect of export rebate claims, cannot be applied to Rule 5 refund claims. There is no other clause of Explanation B to Section 11B which is applicable to the refund claims under Rule 5 of the Cenvat Credit Rules. A limitation prescribed in law always has two components - the period of limitation during which the application is to be filed or something is to be done and the date from which the limitation period is to be counted. Without prescribing the relevant date, a statutory provision prescribing limitation period is meaningless. Since, the second component of the limitation i.e. the relevant date from which the limitation period is to be counted is missing in Clause 6 of the Notification No. 11/2002-C.E. (N.T.), dated 1-3-2002, thus in view the limitation provision in this notification is meaningless. See M/s Deepak Spinners Ltd. Versus CCE, Indore 2013 (11) TMI 1221 - CESTAT NEW DELHI - Decided in favour of assessee

Summary

Issues:
1. Refund claim rejection on account of limitation under Rule 5 of Cenvat Credit Rules, 2004.

Analysis:
The case involved a dispute regarding the rejection of a refund claim by M/s Patodia Syntex Ltd. in relation to availed credit of ADE (TTA) on fabrics. The respondents exported goods and filed a refund claim under Rule 5 of the Cenvat Credit Rules, 2004, which was rejected due to being time-barred. The issue revolved around the interpretation of the relevant date for calculating the period of limitation under Section 11B of the Central Excise Act, 1944, concerning refund claims under Rule 5.

The Revenue argued for the application of the limitation period specified in Section 11B, relying on a High Court decision and a Tribunal ruling. They contended that the relevant date for claiming refund of CENVAT credit should be the date of export of goods. Conversely, the respondent's counsel argued that Section 11B did not cover refund claims under Rule 5, citing a Tribunal decision and a High Court judgment supporting their stance. They emphasized that no time limit should apply for refund claims under Rule 5, as the relevant date was not clearly defined under Section 11B.

The Tribunal analyzed the provisions of Section 11B and the relevant date definitions but found no specific clause applicable to the Revenue's case under Rule 5 of the Cenvat Credit Rules. Referring to a previous Tribunal decision, the Tribunal concluded that the limitation provision in the notification was meaningless due to the absence of a clear relevant date, rendering the limitation period incomplete and unsustainable. The Tribunal dismissed the Revenue's appeal, upholding the respondent's position on the issue of limitation in refund claims under Rule 5.

In conclusion, the judgment highlighted the importance of clarity in defining the relevant date for calculating the period of limitation in refund claims under the Cenvat Credit Rules. The decision favored the respondent by dismissing the Revenue's appeal, emphasizing the need for a clear and applicable relevant date for limitation provisions to be valid and enforceable in such cases.