2019 (7) TMI 566 - HC - Central Excise

Refund of excise duty - Time limitation - restoration of exemption after almost 7 months from the date of withdrawing the same earlier - proof that the duty was paid under protest - HELD THAT - Appellant got the LPG supplies with polybutene from the supplier MRL and paid the excise duty on entire quantity of such supply for the period 01.03.1994 to 23.06.1994, for which short period, the exemption was revoked by the Central Government, which upon representations and protests of the various such Industries including the Respondent/Assessee before us stood finally restored on 24th June 1994 and a specific Notification was later on issued under Section 5A(2) of the Act for the Respondent/Assessee on 24th March 1995 also. Once the restrictions of Section 11B stood relaxed under the orders of the Court by the Revenue, which they chose not to agitate further, denial of refund claim will not be justified. The eligibility of the Respondent/Assessee in the present case to get such refund is also not disputed and a part of the excise duty for the said period has also been made to the Respondent/Assessee in the present case also and therefore, for the limited short period from 01.03.1994 till 15.05.1994, we do not think that the Assessee deserves to be denied the said refund, merely because he chose to file its application for refund on 16.11.1994. We hold this opinion because the present Assessee has also paid the said excise duty for the aforesaid period under protest and the Second proviso of Section 11B of the Act clearly stipulates that the period of limitation shall not apply, where any duty has been paid under protest. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Refund claim of excise duty for the period between 01.03.1994 to 23.06.1994.
2. Application of the limitation period under Section 11B of the Central Excises and Salt Act, 1944.
3. Applicability of the Second proviso to Section 11B regarding duty paid under protest.

Analysis:
1. The appeal was filed by the Revenue against the Assessee, seeking a refund of excise duty paid and borne for the period between 01.03.1994 to 23.06.1994. The Assessee, along with other manufacturers, received polybutane enriched LPG from a supplier and paid excise duty on the entire supply during the period when the exemption was revoked and later restored. The Tribunal allowed the refund claim based on previous judgments in similar cases.

2. The Revenue argued that the Assessee's refund claim was subject to a six-month limitation period under Section 11B of the Act, citing a specific Notification issued in March 1995. The Assessee applied for the refund on 16.11.1994, and the Revenue contended that the refund should only cover the period from 16.05.1994 to 23.06.1994, denying the refund for the earlier period. The Tribunal's order allowing the refund for the entire period was challenged by the Revenue in this appeal.

3. The Assessee contended that they should be treated similarly to another Assessee who successfully obtained a refund for the entire period in a previous case. They argued that the duty paid during the disputed period was under protest, as supported by representations made to the authorities. The Court noted the practical difficulties faced by the industry during the period of exemption revocation and restoration, leading to the Assessee's entitlement to the full refund based on the Second proviso to Section 11B.

4. The Court dismissed the Revenue's appeal, emphasizing the parity between the Assessee and the previously successful Assessee. It was held that the Assessee's case was similar to the previous one, and the duty paid under protest allowed for the relaxation of the limitation period. The Court concluded that the Assessee was entitled to the full refund for the period in question, as per the Second proviso to Section 11B, and upheld the Tribunal's decision to allow the refund claim.