2016 (5) TMI 939 - AT - Central Excise

Period of limitation - Refund claim - paid excess duty on the removal of input - formal refund application was filed by the appellant after one year from payment of the excess duty - Held that - the appellant right from 15.6.2009 was continuously making the correspondence with the department regarding the refund of the re-credit of the same amount of ₹ 96,122/-. Therefore, the legitimate claim of refund stand made on 15.6.2009 itself even though the formal refund application was filed subsequently, therefore the refund cannot be rejected on the ground of time bar. Since, the lower authority has rejected the refund on time bar alone he has not verified the aspect of unjust enrichment, I, therefore remand the matter to the original adjudicating authority to decide the refund in accordance with law but the same cannot be rejected on time bar. However, the matters relates to two appeals No. E/141/12 and E/86808/13 being interconnected should also be reconsidered by the original authority. Demand of duty, Cenvat credit and penalty - Appellant have suo moto taken the recredit for which the refund claim was also filed - Held that - the matters relates to two appeals No. E/141/12 and E/86808/13 being interconnected should also be reconsidered by the original authority. Therefore both these appeals are also remanded to the adjudicating authority for deciding afresh on the basis of the decision taken on the refund matter. If the refund is sanctioned the demand and penalty in appeal No. E/141/2012 will not survive. Consequently, the appropriation of the said amount done from sanctioned refund claim shall also not be maintainable. - Appeal disposed of by way of remand

Summary

Issues involved:
1. Refund claim rejection on the ground of time bar
2. Demand of Cenvat Credit and penalty
3. Appropriation of demand against sanctioned refund claim

Analysis:

Issue 1: Refund claim rejection on the ground of time bar
The appeal focused on a refund claim of ?96,122, which was rejected due to being time-barred. The appellant argued that they had continuously corresponded with the department since June 15, 2009, expressing their intention to claim the refund under Section 11B of the Central Excise Act, 1944. The appellant also mentioned their intention to take Cenvat Credit of the excess paid duty. The Tribunal found that the legitimate claim for refund was made on June 15, 2009, even though the formal refund application was filed later. The Tribunal remanded the matter to the adjudicating authority to decide the refund without rejecting it on the grounds of being time-barred. The aspect of unjust enrichment was also highlighted for verification.

Issue 2: Demand of Cenvat Credit and penalty
The appeal also addressed the demand of Cenvat Credit of ?96,122 and a penalty of an equal amount. The appellant had taken recredit for which the refund claim was filed. The Tribunal noted that if the refund is sanctioned, the demand and penalty in this appeal would not sustain.

Issue 3: Appropriation of demand against sanctioned refund claim
Another issue involved the appropriation of the demand of ?96,122 and penalty against a sanctioned refund claim. The Tribunal emphasized that once the refund matter is settled, the demand and penalty would not stand. The Tribunal remanded this issue along with the demand of Cenvat Credit and penalty for reconsideration by the original adjudicating authority based on the decision taken on the refund matter.

In conclusion, the Tribunal found all three appeals to be interconnected. The decision on the refund claim would impact the other appeals related to demand of Cenvat Credit, penalty, and appropriation against the sanctioned refund claim. Therefore, all appeals were disposed of by way of remand for further consideration in light of the refund decision.