2019 (4) TMI 84 - AT - Central Excise

Refund claim - time limitation - Section 11B of the Central Excise Act, 1944 - application for refund was filed beyond the period of one year - appellant s first contention is that the amounts were paid during the investigation and they should be treated only as deposits and not as payment of duty - Held that - If no SCN is issued under Section 11A the amounts deposited need to be refunded to the person who deposited to them. However, an exception has been made under Section 11AC. The purpose of this provision is to avoid unnecessary litigation when the assessee agrees with the department s point of view at the stage of investigation itself. In such a case, the assessee can pay the duty interest and penalty and no show cause notice needs to be issued in terms of Section 11AC. In this case, the appellant had voluntarily paid the amounts during the investigation and without protest. Therefore, a letter was issued by the department confirming the payments made by the appellant and stating that the proceedings are need to have been concluded under Section, 11AC. Wherever the duty has been paid in excess of what was required to be paid or has been claimed to be paid in excess of what have been required to paid, the provisions of Section 11B apply in full force. Appeal disposed off.

Summary

Issues involved:
1. Refund claim rejection based on payment made during investigation
2. Applicability of Section 11AC in refund claims
3. Time limitation under Section 11B for refund claims
4. Classification of products for excise duty purposes

Analysis:

1. Refund claim rejection based on payment made during investigation:
The appellant filed two appeals against the rejection of refund claims amounting to specific sums paid during investigation. The lower authority rejected the claims on the grounds that the payments were not made under protest and were hit by the time limitation under Section 11B of the Central Excise Act. The appellant argued that the amounts paid during investigation should be considered as deposits and hence refundable. However, the department contended that the payments were made voluntarily without protest, and no show cause notice was required as per Section 11AC.

2. Applicability of Section 11AC in refund claims:
The appellant contended that the payments made during investigation should be treated as deposits and not as payment of duty, and thus, refundable. However, Section 11AC provides an exception where the assessee agrees with the department's view during investigation, allowing them to pay duty, interest, and penalty without the issuance of a show cause notice. In this case, the appellant voluntarily paid the amounts without protest, and the department confirmed the conclusion of proceedings under Section 11AC.

3. Time limitation under Section 11B for refund claims:
In one appeal, the application for refund was filed beyond the one-year period specified in Section 11B. The appellant argued that the limitation should not apply as the duty was paid under a mistake of law. However, the judgment emphasized that Section 11B applies to cases where duty or interest was paid in excess and must be claimed as a refund within the prescribed time limit. The judgment clarified that Section 11B is applicable even in cases where duty was paid at different rates based on classification disputes.

4. Classification of products for excise duty purposes:
The appeals also involved disputes regarding the classification of products for excise duty. The appellant argued that their products should be classified under specific tariff headings, while the department contended otherwise. In one appeal, the classification dispute led to the rejection of the refund claim. The judgment remanded one appeal back to the adjudicating authority to decide the refund application on merits, including the classification of the product.

In conclusion, one appeal was rejected due to being time-barred under Section 11B, while the other appeal was remanded for further consideration on the classification issue. The judgment highlighted the importance of adherence to statutory provisions regarding refund claims and the significance of classification disputes in excise duty matters.