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2017 (4) TMI 1205 - AT - Central ExciseRefund claim - time limitation - duty paid under protest - CENVAT credit on capital goods - Scope of section 11B - Held that - reliance was placed in the case of M/s. ITEL Industries Ltd. Versus The Commissioner of Central Excise 2014 (3) TMI 796 - KERALA HIGH COURT , where it was held that no question of limitation would fall for consideration or deserves to be extended depending upon the conditional deposit when duty and interest payable if any made by the applicants. If no such liberty or protest is indicated at the time of payment of duty and interest, definitely such applicants are not entitled to claim such benefit provided under the second proviso to Section 11B - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Admissibility of Cenvat Credit on Bolting cloth and Screens as capital goods. 2. Refund claim under Section 11B of the Central Excise Act, 1944. 3. Applicability of limitation period for refund claims when duty is paid under protest. 4. Requirement to cross the bar of unjust enrichment. Issue-Wise Detailed Analysis: 1. Admissibility of Cenvat Credit on Bolting Cloth and Screens as Capital Goods: The appellant, engaged in the manufacture of tiles, availed Cenvat Credit on Bolting cloth and Screens, which was disputed by the Department. The appellant reversed the credit amounting to ?63,27,506/- under protest on 21.08.2008 and informed the Department via a letter dated 01.09.2008. The show cause notice issued by the Department was dropped by the Commissioner in the Order-in-Original dated 30.03.2009. 2. Refund Claim under Section 11B of the Central Excise Act, 1944: The appellants filed a refund claim on 28.06.2010 for the reversed credit. The Assistant Commissioner issued a show cause notice on 26.07.2010 and rejected the refund claim on 26.08.2010, citing limitation under Section 11B. The Commissioner (Appeals) upheld this decision, leading the appellants to appeal to the Tribunal. 3. Applicability of Limitation Period for Refund Claims When Duty is Paid Under Protest: The appellants argued that the limitation period under Section 11B does not apply when duty is paid under protest, as per the proviso to Section 11B(1). They cited several judgments, including Mafatlal Industries Ltd. Vs. UOI and Cisco Systems India Pvt. Ltd. Vs. CCE, to support their claim. The Revenue contended that the protest ceased on 30.03.2009 when the Commissioner dropped the show cause notice, and the one-year limitation period started from that date. The Tribunal examined the relevant records and found that the second proviso to Section 11B(1) explicitly states that the limitation of one year shall not apply when duty is paid under protest. 4. Requirement to Cross the Bar of Unjust Enrichment: The Tribunal referred to multiple judgments, including Indian Oil Corporation Ltd. Vs. CCE and CCE, Gurgaon Vs. Alcatel Modi Network System Ltd., which supported the view that the limitation period does not apply to cases where duty is paid under protest. However, the appellants must still prove that there was no unjust enrichment as per the precedent set in CCE-Mumbai-II Vs. Allied Photographic Ltd. Conclusion: The Tribunal concluded that the order of the Commissioner (Appeals) lacked merit and was set aside. The appeal was allowed, subject to the appellants crossing the bar of unjust enrichment. The operative part of the judgment was pronounced in the court.
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