2019 (3) TMI 414 - HC - Central Excise

Refund claim - Time limitation - appeal dismissed on the ground of delay and latches - section 11 (B) of the Central Excise Act, 1944 - Held that - In the present case, no challenge was made to provisions of the Finance Act. Further, there is no challenge to the finding of facts recorded by the Authorities below that there was no deposition of tax under protest. In case of Union of India Vs. Namdang Tea Estate, 2004 (1) TMI 73 - SUPREME COURT OF INDIA , the Supreme Court has held that the limitation for refund applied for under the provisions of Section 11 B of the Central Excise Act, 1944, which itself makes a provision for limitation of six months from the relevant date i.e. date of payment, claim for refund filed for the period beyond six months from the relevant date is not admissible - Now this period being amended to one year vide Act of 2000 with effect from 12.05.2000; therefore, when a specific limitation has been provided under Section 11 B, then that limitation has to be adhered specially when it is not the case of appellant that he had deposited such amount under protest to carve out an exception under second proviso to Section 11 B (1). In the present case challenge is only restricted to refund, which is governed by Section 11 (B) of the Central Excise Act and since second proviso below Section 11 (B) prescribing limitation of one year provides for an exception that such limitation may not be attracted if any duty and interest is paid under protest, the proviso is not available to the petitioner. Appeal dismissed.

Summary

Issues:
1. Claim for refund of service tax barred by limitation under section 11 (B) of the Central Excise Act, 1944.
2. Dispute settlement by Supreme Court regarding the value of goods in relation to photography.
3. Questions of law raised by the appellant regarding the sustainability of the Tribunal's order.

Issue 1: Claim for refund of service tax barred by limitation under section 11 (B) of the Central Excise Act, 1944:
The appellant filed an appeal under section 35 (G) of the Central Excise Act, 1944, challenging the rejection of a refund claim for differential service tax deposited on specific dates. The Tribunal rejected the appeal citing delay and latches, as the refund claim was made beyond the one-year limitation period prescribed under section 11 (B) of the Act. The appellant argued that the Supreme Court's settlement of a similar dispute clarified that the value of photographic material should not be included in service tax calculations. However, since the appellant did not challenge the authority to impose the service tax but only sought a refund, the limitation prescribed under section 11 (B) had to be adhered to. The Court held that the limitation period of one year must be followed, especially when the appellant did not deposit the amount under protest to qualify for an exception under the second proviso to section 11 (B) (1). Therefore, the appeal was dismissed based on the established law regarding limitations for refund claims.

Issue 2: Dispute settlement by Supreme Court regarding the value of goods in relation to photography:
The appellant contended that the Supreme Court's dismissal of the Revenue's appeals against the Tribunal's orders clarified that the value of photographic material should not be included in service tax calculations. This settlement was crucial in determining the appellant's eligibility for a refund of the service tax paid. However, the Court emphasized that the challenge made by the appellant was limited to seeking a refund and did not contest the imposition of the service tax itself. Therefore, the settlement by the Supreme Court did not impact the application of the limitation period for refund claims under section 11 (B) of the Central Excise Act, 1944.

Issue 3: Questions of law raised by the appellant regarding the sustainability of the Tribunal's order:
The appellant raised substantial questions of law challenging the sustainability of the Tribunal's order. These questions included the validity of the levy of tax on the cost of material, compliance with Article 265 of the Constitution of India, and the Department's accountability in retaining illegally collected taxes. Additionally, the appellant questioned whether the deposit of service tax constituted a "Deposit" or a "Payment" and whether the Department was obligated to pass an assessment order under section 72 of the Finance Act. However, the Court found that since the appellant's challenge was primarily focused on seeking a refund, the questions raised did not alter the application of the limitation period for refund claims as prescribed under section 11 (B) of the Act. Consequently, the appeal was dismissed based on the existing legal framework and precedents.

This detailed analysis of the judgment from the Madhya Pradesh High Court highlights the issues involved, the arguments presented by the parties, and the Court's reasoning in dismissing the appeal based on the limitations set forth in the Central Excise Act, 1944.