2018 (1) TMI 297 - AT - Central Excise

Interest on rebate - whether the amount of interest recovered from the appellant erroneously adjusting against the rebate claim, become time bar when claimed by the appellant subsequent to the order in appeal determining the correct amount of interest required to be appropriated against the rebate claims? - Held that - the amount of ₹ 7,98,463/- was considered to have been appropriated in excess. This wrong appropriation of ₹ 7,98,463/- cannot be considered as a separate refund amount and its claim is barred by limitation when the appellant requested for release of the said amount through their letter dated 26.03.2012 - the amount which was initially claimed as refund if reduced by the adjudicating authority, but later restored by the Appellate Authority, second refund claim need not be filed again in claiming that amount - appeal restored.

Summary

Issues:
1. Interpretation of the 'relevant date' under Section 11B of the Central Excise Act, 1944.
2. Whether the amount of interest erroneously adjusted against the rebate claim becomes time-barred when claimed subsequently.

Analysis:
1. The appellant filed a rebate claim of ?72,05,780/-, which was partially adjusted against outstanding interest dues of ?23,01,034/-. The Commissioner (Appeals) modified the amount to ?15,02,571/-, and the appellant sought release of the balance amount of ?7,98,463/-. A Show Cause Notice was issued on grounds of time bar, but the Assistant Commissioner sanctioned the refund. The Revenue appealed, leading to the present case.

2. The appellant argued that since the rebate claim was already sanctioned, a second refund claim after the correct interest amount determination by the Commissioner (Appeals) was unnecessary. The Ld. Advocate contended that the appellant should not be required to file a second refund application for the enhanced amount post-appeal modification. The Revenue, however, claimed the refund was time-barred.

3. The crucial issue was whether the erroneously adjusted interest amount, later corrected by the Appellate Authority, could be claimed without a second refund application. The Tribunal found that the initial erroneous appropriation of ?7,98,463/- cannot be considered a separate refund amount. The claim for this amount, requested after the correction, was deemed time-barred. The Tribunal agreed with the Ld. Advocate's argument that once a refund claim is decided by the adjudicating authority and later modified on appeal, a second refund application for the enhanced amount is not required.

4. Consequently, the Tribunal set aside the appeal, restoring the Original Authority's order. The judgment clarified that the corrected amount, previously sanctioned as a rebate claim, did not warrant a separate refund claim. The appellant's request for the balance amount was considered time-barred, as it was part of the original sanctioned rebate claim.