2016 (8) TMI 581 - AT - Central Excise

Refund claim - rejected as time-barred under section 11 B clause 5(e) - appellant was allotted a contract for Highway project under the World Bank Loan Assistance, approved by Government of India - entitled for the benefit of Notification number 108/95 dated 28/8/95 wherein it is provided that where the goods are supplied to project that had been approved by Govt. of India and financed by an International organisation - appellant applied for eligibility certificate from the concerned authority on 12.3.2003 but the same was delayed (issued on 25.2.2004) - due to time bound nature of the work, the appellant purchased the CRMB (bitumen) on payment of Excise duty. Held that - the right to claim refund crystallised only on receipt of the eligibility certificate which was issued to the appellant vide covering letter dated 25/2/2004. By following the ruling of the Hon ble Delhi High Court in the case of Sony India Ltd 2014 (4) TMI 870 - DELHI HIGH COURT , I hold that the period of limitation of one year starts only from 26/2/2004 and not prior to that or the date of purchase earlier. - Decided in favour of appellant

Summary

Issues:
- Rejection of refund claims by the Commissioner (Appeals)
- Calculation of limitation for the refund claim
- Relevant date for the refund claim
- Application of limitation period from the date of purchase or grant of eligibility certificate
- Interpretation of Section 11 B of the Act
- Comparison with similar cases for precedent

Rejection of Refund Claims by the Commissioner (Appeals):
The appellant appealed against Orders-in-Appeal where their refund claims were rejected by the Commissioner (Appeals). The appellant had procured goods duty-free under Notification number 108/95 for a Highway project under the World Bank Loan Assistance, but the refund claims were rejected as time-barred under section 11 B clause 5(e) due to delay in applying for the necessary certificate and filing the refund claim beyond the stipulated period.

Calculation of Limitation for the Refund Claim:
The main issue revolved around the calculation of the limitation period for the refund claim. The appellant purchased goods for the project before receiving the eligibility certificate, leading to a dispute over whether the limitation period should start from the date of purchase or the date of grant of eligibility certificate. The revenue contended that the relevant date for refund is the date of purchase as per Section 11 B of the Act.

Relevant Date for the Refund Claim:
The Tribunal analyzed the relevant date for the refund claim by considering the appellant's entitlement to refund only upon receiving the eligibility certificate. Citing a case from the Hon'ble Delhi High Court, it was held that the limitation period cannot start before the right to claim the refund benefit crystallizes. Therefore, the period of limitation was deemed to start from the date of receipt of the eligibility certificate, i.e., 26/2/2004, and not from the date of purchase as contended by the revenue.

Application of Limitation Period from the Date of Purchase or Grant of Eligibility Certificate:
The Tribunal resolved the issue by aligning with the ruling of the Hon'ble Delhi High Court, emphasizing that the right to claim refund only materialized upon receiving the eligibility certificate. Consequently, the limitation period of one year was deemed to commence from the date of grant of the eligibility certificate, rejecting the notion that it should start from the date of purchase for the project.

Interpretation of Section 11 B of the Act:
In interpreting Section 11 B of the Act, the Tribunal clarified that the relevant date for calculating the limitation for a refund claim is crucial and should be determined based on when the right to claim the benefit of refund crystallizes, which, in this case, was upon receiving the eligibility certificate.

Comparison with Similar Cases for Precedent:
The Tribunal referred to a similar case involving the appellant to establish consistency in judgments. It highlighted that the relevant date for the refund claim should be tied to the receipt of the eligibility certificate rather than the date of purchase, as clarified by the Hon'ble Delhi High Court, thereby allowing the appeal and directing the concerned authority to grant the refund within a specified timeframe.