2016 (9) TMI 1125 - AT - Central Excise

SSI Exemption - Period of limitation - Refund claim - duty paid at the full rate by availing Cenvat Credit during financial years 1989-90 to 1993-94 as the SSI certificate was rejected - subsequently the SSI certificate was granted w.e.f 12.05.1989 as per the directions of the Hon ble High Court of Madhya Pradesh at Jabalpur - Held that - the original authority has rejected the refund claim taking the view that the claim has been filed beyond the period of one year and hence time barred under Section 11-B of the Central Excise Act. He has considered that the duty paid by the assessee cannot be considered as paid under protest. He has further held that the claim is liable to be rejected on the ground of unjust enrichment as the assessee has failed to produce the copies of the contracts entered into with the customers from which it could have been established. We find that the first appellate authority in the impugned order has considered all these submissions and given a detailed finding on all the points. Therefore, we are in complete agreement with the view taken by the first appellate authority and find no reason to take a different view. Accordingly, the impugned order is upheld. - Decided against the Revenue

Summary

Issues:
- Refund claim rejection based on time limit and duty payment method

Analysis:
The appeal before the Appellate Tribunal CESTAT NEW DELHI involved a dispute regarding a refund claim filed by the assessee, a manufacturer of oxygen and acetylene gas, against the duty paid during the financial years 1989-90 to 1993-94. The assessee initially could not avail the Small Scale Industries (SSI) exemption due to the rejection of their application for the SSI certificate. Subsequently, they were granted the SSI certificate, and filed a refund claim for the duty paid. The original authority rejected the refund claim, citing it as time-barred under Section 11-B of the Central Excise Act and on grounds of unjust enrichment. The Revenue's appeal mainly contended that the refund claims were time-barred and that the duty was paid using modvat/cenvat credit, thus not eligible for refund without specific direction from the High Court.

The Appellate Tribunal considered the arguments presented by both parties and reviewed the relevant records. It was established that the benefit of the SSI exemption would be applicable to the assessee upon the grant of the SSI registration certificate. The original authority had rejected the refund claim based on time limitations and unjust enrichment, but the first appellate authority allowed the refund after detailed analysis. The first appellate authority found that the duty was indeed paid under protest, as indicated by the clearance documents, and that there was no evidence of passing on the excise duty to customers in the contracts. Additionally, a report from the Assistant Commissioner confirmed that the excise duty was not passed on to customers. The retrospective grant of SSI registration also implied a retrospective grant of excise benefits. Consequently, the first appellate authority held that the appellants were entitled to the refund claimed along with interest under Section 11BB.

The Appellate Tribunal concurred with the findings of the first appellate authority and upheld the impugned order, rejecting the appeal filed by the Revenue. The decision was pronounced in open court on 11/08/2016, affirming the entitlement of the appellants to the refund claimed.