2019 (8) TMI 825 - HC - Central Excise

Refund of CENVAT credit - Period of limitation for second refund application where the first application is within prescribed period of limitation - period between October 2010 and March 2012 - relevant date - HELD THAT - Refund applications have been rejected only by taking into account relevant date within the meaning of clause (ec) of explanation B to Section 11B of CE Act holding that the refund applications have not been made within one year from the relevant date - In the instant case, in the light of Hon'ble Division Bench Judgment i.e.,case of COMMISSIONER OF CUSTOMS VERSUS M/S. SPIC LTD. 2014 (12) TMI 1121 - MADRAS HIGH COURT that second refund application is not necessary this basis itself pales into insignificance. To be noted, SPIC judgment arises under Customs Act, 1962, but the principle governing refund nonetheless is the same. This Court is convinced that the impugned orders are liable to be set aside holding that the refund applications of the writ petitioner claiming CENVAT credit refund cannot be rejected on the ground that it is beyond one year from the relevant date - petition allowed.

Summary

Issues Involved:
1. Refund of CENVAT credit.
2. Rejection of refund claims based on delay beyond one year from the relevant date.
3. Necessity of a second refund application.
4. Impact of Chennai floods on the delay in filing refund claims.

Detailed Analysis:

Refund of CENVAT Credit:
The central issue in these six writ petitions is the refund of CENVAT credit claimed by the petitioner and its rejection by the respondent. The petitioner sought refunds for various periods between October 2010 and March 2012, which were partially granted by the original authority but further appealed. The Appellate Authority granted partial relief in separate orders, which became final as neither party appealed further.

Rejection of Refund Claims Based on Delay:
The respondent rejected the refund claims on the ground that they were filed beyond one year from the relevant date, as per Section 11B of the Central Excise Act, 1944, applicable to service tax via Section 83 of the Finance Act, 1994. The impugned orders noted that the claims were filed more than 2.5 years after the relevant date, whereas they should have been filed within one year.

Necessity of a Second Refund Application:
The petitioner argued that a second refund application was unnecessary if the original application had been made before the adjudication/appeal. This argument was supported by the judgment in the SPIC Ltd. case, which stated that there is no provision for a second refund application and the appeal is a continuation of the original proceedings. Thus, the limitation period for the refund claim should not apply to the proceedings following the appeal.

Impact of Chennai Floods on the Delay:
The petitioner also cited the 2015 Chennai floods as a reason for the delay in filing the refund claims. The respondent dismissed this argument, stating that the floods occurred in the first week of December 2015, while the orders-in-original were dated after the first week of December 2015. However, the court found this reasoning untenable, noting that the impact of the deluge lasted for months, affecting normalcy in the city.

Conclusion:
The court held that the refund claims could not be rejected on the ground of being filed beyond one year from the relevant date. It emphasized that, per the SPIC Ltd. judgment, a second refund application was not necessary. The court directed the respondent to process and make the refunds in accordance with the Appellate Authority's orders within 12 weeks. The writ petitions were allowed, and the connected miscellaneous petitions were closed without costs.