2016 (12) TMI 321 - AT - Central Excise

Refund claim u/r 5 of the CENVAT Credit Rules, 2004 read with N/N. 5/2006 - CE (NT) dated 14.03.2006 - clearances to SEZ - accumulated credit - limitation bar - As seen from Rule 5 noticed above, the said Rule does not specify any time limit; but lays down that refund is subject to such safeguards, conditions, and limitations notified by the Central Government. Clause 6 of the Notification No. 5/2006 dated 14.03.2006 states that the refund is subject to the time limit prescribed in Section 11B of the Central Excise Act, 1944. Thus the refund claims were rejected on the ground that they were filed beyond the expiry of one year from the relevant date. Held that - reliance placed on the decision of the case of CCE Vs Celebrity Designs India Pvt Ltd. 2015 (3) TMI 660 - MADRAS HIGH COURT where it was held that the refund claim filed beyond the period of one year from the relevant date is time barred. The question then arises what is the relevant date? - Held that - Sub clause (ii) of Section 11 B (B) (a) states that if the goods are exported by land, the date on which such goods pass the frontier would be the relevant date. Therefore the date on which the goods entered the SEZ can be taken into consideration for ascertaining the relevant date. The appellant appears to have accordingly computed the period of limitation and contends that some amount would fall within time. The dates of the goods crossing the frontier / entering the SEZ as shown in the table requires verification. Therefore, I am of the view that the matter can be remanded to the original authority to verify whether claim with regard to any export would fall within the period of limitation, if the relevant date is reckoned as the date when the goods entered the SEZ. Whether the factory is closed down, the reasons for closing down, the dues and liabilities if any, etc., has to be verified by the department when the assessee/appellant puts forward a refund claim for the reason of closure of unit. At the fag end of the case, the appellant cannot contend that the unit is closed down and that therefore entire amount has to be refunded overlooking the period of limitation. Therefore this prayer of the appellant that refund is to be granted as the unit is unoperational/ closed down is not acceptable, and hence disallowed. Matter is remanded to the adjudicating authority to verify whether claim in respect of any export would be within the period of limitation, taking the relevant date being the date when the goods entered the SEZ - appeal allowed by way of remand.

Summary

Issues:
Refund claim time-barred under Rule 5 of CENVAT Credit Rules, 2004.

Detailed Analysis:
1. Background: The appeals involved refund claims filed by the appellants for unutilized CENVAT Credit on inputs cleared to SEZ. The claims were rejected by the adjudicating authority and upheld by the Commissioner (Appeals) on the ground of being time-barred.

2. Legal Provisions: Rule 5 of the CENVAT Credit Rules, 2004 allows for refund of CENVAT credit subject to conditions specified by the Central Government. Notification No. 5/2006-CE (NT) dated 14.03.2006 specifies the time limit for filing refund claims under Section 11B of the Central Excise Act, 1944.

3. Arguments: The appellant argued, citing the case of STI India Ltd., that a refund claim cannot be rejected solely based on limitation. The department, referring to the case of CCE Vs Celebrity Designs India Pvt Ltd., contended that claims filed beyond one year from the relevant date are time-barred.

4. Judgment: The Tribunal considered conflicting judgments and followed the decision of the Hon'ble High Court of Madras in the case of Celebrity Designs India Pvt Ltd. The relevant date for calculating the limitation was determined as the date when goods entered the SEZ.

5. Remand Order: The matter was remanded to the original authority to verify if any export claim fell within the limitation period based on the relevant date of goods entering the SEZ. The appellant's new submission about the unit closure was rejected as it was not raised earlier and required verification by the department.

6. Conclusion: The appeal was allowed by way of remand, setting aside the impugned order and instructing verification of claims within the limitation period based on the date of goods entering the SEZ. The appellant's request for refund due to unit closure was disallowed, emphasizing the need for proper verification and adherence to the limitation period.

This comprehensive analysis outlines the key legal issues, arguments presented, relevant legal provisions, and the Tribunal's decision to remand the case for further verification while addressing the appellant's additional claim regarding unit closure.