2018 (2) TMI 803 - AT - Central Excise

Refund of the amount of interest paid on transfer/sale of assets to their joint venture unit - time limitation - Section 11B of the Central Excise Act, 1944 - Held that - even if an amount is paid under mistake of law, the limitation under Section 11B is applicable - time limitation applicable to the facts of present case - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against denial of refund due to limitation under Section 11B of the Central Excise Act, 1944.

Analysis:
The appellant, M/s. JBM Auto Ltd., transferred their factory to a joint venture with a foreign company, resulting in a new registration number. Before the transfer, they claimed cenvat credit of capital goods and inputs. The capital goods continued to be used by the new owner, while the original unit remained operational. During an audit, the appellant was asked to reverse the cenvat credit of capital goods and pay interest, which they did. The appellant sought a refund of the interest paid on the transfer/sale of assets to the joint venture unit. However, a default memo was issued, asserting that the claim was time-barred under Section 11B, as the interest was paid on 23.7.2009, while the refund application was filed on 30.9.2010. The claim was rejected on grounds of limitation and incompleteness of the refund application. The Commissioner (Appeals) upheld the rejection, citing Section 11B's limitation. The appellant relied on the decisions of the Hon'ble High Court of Bombay in specific cases to support their claim.

The Additional Commissioner (AR) relied on the impugned order and the decision of the Hon'ble Supreme Court in a different case to argue that even if an amount is paid under a mistake of law, the limitation under Section 11B applies. The AR contended that the High Court decisions cited by the appellant did not consider the Supreme Court's decision. The Tribunal noted that the Revenue did not dispute the admissibility of interest as a refund but argued that the refund application was time-barred under Section 11B. Referring to the Supreme Court's observation in a specific case, the Tribunal emphasized that refund applications filed beyond the prescribed period are untenable in law, regardless of any directions given by other courts. As a result, the appeal was rejected based on the clear finding of the Supreme Court, noting that the High Court decisions cited by the appellant were issued without considering the Supreme Court's decision.

In conclusion, the Tribunal dismissed the appeal on 29.12.2017, upholding the rejection of the refund application based on the limitation under Section 11B of the Central Excise Act, 1944.