2016 (8) TMI 930 - AT - Central Excise

Refund claim - period of limitation - Held that - it was open to the appellant to opt for provisional assessment if he was unable to determine the assessable value at the time of clearances from the factory. If he has not opted for the same, the only recourse open to him is to file a refund claim under Section 11B. The show-cause notice issued under Section 11B are in the nature of communication of the objection. In fact there is no time limit prescribed for issue of show-cause notice under Section 11B and thus it is open to Revenue to point out the short comings in the refund claim. - Decided against the appellant

Issues:
1. Whether two show-cause notices can be issued for the same refund claim.
2. Whether the show-cause notice issued after one year of filing the refund claim is barred by limitation.
3. Whether there is a need to issue a show-cause notice for a refund claim.
4. Whether there is a time limit prescribed under Section 11B of the Central Excise Act for issuing a show-cause notice in respect of a refund claim.

Analysis:
1. The appellant filed a refund claim for a specific period, which was later rejected on the ground of limitation after two show-cause notices were issued. The appellant argued that invoking the limitation in the second notice was impermissible as it was not raised in the original notice. The appellant relied on previous decisions stating that a second show-cause notice cannot be issued for the same claim. However, it was noted that these cases pertained to demands, not refund claims. The Tribunal emphasized the need to address all objections in refund claims to avoid prolonged litigation. The Tribunal dismissed the appeal, stating that the duty was not collected illegally, and the show-cause notices were a means to communicate objections, with no time limit prescribed under Section 11B.

2. The appellant contended that the second show-cause notice, issued after one year of filing the refund claim, was time-barred. The appellant argued that the delay in issuing the notice rendered it invalid. However, the Revenue argued that there is no time limit prescribed under Section 11B for issuing show-cause notices related to refunds. The Revenue asserted that issuing a show-cause notice was essential to examine all aspects of Section 11B while processing refund claims. The Tribunal supported this argument by referencing a previous case upheld by the High Court, emphasizing the importance of addressing all objections in refund claims promptly to avoid prolonged legal proceedings.

3. The appellant raised concerns regarding the necessity of issuing a show-cause notice for a refund claim. The appellant argued that the original notice did not mention the limitation issue, and therefore, introducing it in a subsequent notice was improper. The Revenue contended that issuing a show-cause notice was a standard practice to assist the appellant in defending the refund claim effectively. The Tribunal highlighted that the purpose of the show-cause notice was to communicate objections and that there was no specific time limit for issuing such notices under Section 11B. Referring to a relevant High Court decision, the Tribunal emphasized the importance of addressing all aspects of a refund claim thoroughly to ensure a fair and efficient resolution.

4. The Tribunal addressed the issue of whether there is a time limit prescribed under Section 11B for issuing show-cause notices concerning refund claims. It was clarified that there is no specific time limit mentioned under Section 11B for issuing show-cause notices related to refunds. The Tribunal emphasized the importance of the Revenue pointing out deficiencies in refund claims through show-cause notices to ensure a comprehensive examination of all aspects of Section 11B. Referring to a High Court decision, the Tribunal stressed the significance of resolving all objections promptly to avoid prolonged legal proceedings and promote certainty in the application of the law.

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