2017 (11) TMI 599 - AT - Central Excise

Refund claim of duty reversed - time limitation - Section 11 B of the Central Excise Act - Bagasse - Rule 6(3) of CCR, 2004 - Held that - Bagasse is not a dutiable item and not a manufacturer item, there was no question of any reversal of duty under the provision of Rule 6(3) of CCR, 2004. Under such facts and circumstances, the amount reversed by the appellant u/r 6(3) of CCR was in the nature of revenue deposit. Further, it is an admitted fact that such amount was reversibly deposited under protest - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Time-barred refund claim under Rule 6(3) of Cenvat Credit Rules.

Analysis:
The appellant, having a sugar mill, cleared Bagasse and Press Mud, paying duty under protest for the period April 2010 to August 2012. The issue revolved around the time-barring of the refund claim filed on 13/06/2013. The Department contended that the appellant failed to maintain separate accounts for dutiable final output (sugar and molasses) and exempted final product (Bagasse) as per Rule 6(3) of CCR, 2004. The matter was previously settled by the Tribunal in favor of the appellant, emphasizing the impossibility of separate accounts due to Bagasse being a waste product of sugarcane crushing.

To avoid further litigation and interest liability, the appellant started reversing Cenvat credit under Rule 6(3) upon Bagasse/Press Mud clearance since April 2010. The appellant filed a refund claim for the period April 2010 to August 2012 after a successful Tribunal verdict. However, a show cause notice was issued, proposing rejection on the grounds of time-bar under Section 11B of the Central Excise Act. The Assistant Commissioner rejected the refund application, citing limitation under Section 11B, which the appellant contested, arguing that the reversal was done under protest.

The appellant appealed the rejection, citing precedents that Bagasse is not excisable, thus the reversal was a revenue deposit, not subject to limitation. The Tribunal concurred, holding that Bagasse is not dutiable, and the reversal under Rule 6(3) was a revenue deposit. Consequently, the impugned order was set aside, directing the refund with applicable interest under Section 11BB of the Act within 45 days.