2021 (3) TMI 788 - AT - Central Excise

Refund of excise duty paid - denial on the ground of time limitation - appropriation of amount towards the arrears pending - Section 11B of the Central Excise Act 1944 - HELD THAT - The appellant filed the refund claim on 20/03/2013 in respect of the duty paid on the goods exported. The Assistant Commissioner sanctioned the refund but appropriated an amount of 16, 04, 530/- towards arrears pending in another case and the said appropriation was set aside by the Commissioner (Appeals) and thereafter it was incumbent on the Department to refund the said amount of 16, 04, 530/-. When the Department did not refund the said amount the appellant after waiting about four years wrote a letter dated 14/01/2019 requesting the Assistant Commissioner to release the amount but the Department wrongly issued a show-cause notice proposing to deny the refund claim on time-bar and subsequently denied the refund claim by Order-in-Original dated 29/04/2019 on time-bar and the same was upheld by the Commissioner (Appeals) by the impugned order. The Commissioner (Appeals) has wrongly invoked the provision of Clause (ec) for denying the refund on the ground that the refund has arisen on account of the order passed by the Commissioner in appeal whereas in fact the refund has arisen on account of export of goods and the Department having accepted the order of the Commissioner (Appeals) dated 27/07/2015 should have refunded the amount in cash to the appellant. This issue has been considered by the Tribunal in the case of SPIC LTD. VERSUS COMMISSIONER OF CUSTOMS CHENNAI 2006 (11) TMI 73 - CESTAT CHENNAI wherein on identical facts the Chennai Bench of the CESTAT has held that there is no need to file any refund application under the provisions of the Act. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection as time-barred under Section 11B of the Central Excise Act, 1944.

Analysis:
The appeal challenged the rejection of a refund claim amounting to ?16,04,530/- as time-barred under Section 11B of the Central Excise Act, 1944. The appellant exported excisable goods and filed rebate claims totaling ?72,30,188/- in 2013. The original authority sanctioned a refund of ?71,91,830/- as rebate in cash and ?38,358/- as credit. However, an amount of ?16,04,530/- was appropriated towards arrears from a previous order, leading to a dispute. The Commissioner (Appeals) modified the order and held that the appropriation against pending dues was not sustainable. The appellant requested the balance refund, but the Department issued a show-cause notice proposing to reject the refund claim on time-bar, ultimately rejecting it in 2019.

The appellant argued that the relevant date for the refund claim should be the date of export, which was within one year from the date of export. They contended that no fresh refund application was required post the Commissioner (Appeals) decision, as the Department should have refunded the amount suo motu. The appellant relied on legal precedents to support their position, emphasizing that subsequent reminder letters do not affect the time limit under Section 11B.

The Department, represented by the learned AR, supported the findings of the impugned order, maintaining the rejection of the refund claim as time-barred. However, the Tribunal found that the Department's denial of the refund claim based on Clause (ec) was incorrect. The refund arose from the export of goods, not an appellate order. Citing the case of SPIC Ltd. Vs. CCE, Chennai, the Tribunal held that no fresh refund application was necessary post a successful appeal/revision proceeding, as long as the initial claim was made within the statutory limit.

The Tribunal set aside the impugned order, allowing the appeal of the appellant. By following the legal precedents and interpreting Section 11B, the Tribunal concluded that the rejection of the refund claim as time-barred was unsustainable in law. The Department was directed to refund the withheld amount to the appellant.

This judgment highlights the importance of understanding the statutory provisions governing refund claims and the significance of legal precedents in interpreting such provisions to ensure fair and just outcomes in tax matters.