2021 (5) TMI 15 - AT - Service Tax

Refund of CENVAT Credit - claim filed within the time limitation or not - date of filing of refund claim originally to be taken or the date on which rectified claim is submitted is to be taken into account? - HELD THAT - The authorities below have computed the period of limitation from the date of re-submission of the refund claims. This is against the provisions of law. The date on which the refund claims has been originally submitted is the relevant date that has to be reckoned for computing the limitation of one year - When computed in such a manner, all these refund claims are well within time. The finding in the impugned order that these refund claims are time-barred is, therefore, set aside. Refund claim - denied on the ground that the balance in the Cenvat Account has been brought below the refund claim and, therefore, is not in compliance with Rule 2(g) of the said notification - HELD THAT - When the debit made by the appellant as evidenced by the ST-3 returns is considered, it would show that both clauses 2(h) as well as 2(g) has been complied. For these reasons, it is found that the rejection of the refund claim for the period April, 2017 to June, 2017 is not sustainable. The appeals are allowed and the Refund Sanctioning Authority is directed to process the refund claims on merits - Appeal allowed.

Summary

Issues:

1. Rejection of refund claim under Rule 5 of Cenvat Credit Rules, 2004 based on time-barred submission.
2. Non-compliance with Notification No.07/2012-CE(NT), dated 18.06.2012 regarding the balance in Cenvat account.

Analysis:

Issue 1: Rejection of refund claim based on time-barred submission

The appellant filed appeals against the rejection of refund claims under Rule 5 of Cenvat Credit Rules, 2004. The appellant argued that the refund claims were initially filed within the prescribed one-year period under section 11B of the Central Excise Act, 1944. However, the department requested rectification and additional documents, leading to the re-submission of the claims on different dates. The authority erroneously considered the date of re-submission as the filing date, which the appellant contested. Citing legal precedents like M/s. United Phosphorous Ltd. vs. Union of India and Sudha Ramachandran vs. Union of India, the appellant argued that the original filing date should determine the limitation period. The tribunal agreed, setting aside the finding that the claims were time-barred and directing the consideration of the claims on their merits.

Issue 2: Non-compliance with Notification No.07/2012-CE(NT), dated 18.06.2012

In Appeal No. ST/41298/2019, the issue revolved around the appellant's alleged non-compliance with clause 2(g) of Notification No.07/2012-CE(NT), which required the balance in the Cenvat account to be below the claim for the quarter. The appellant contended that the necessary debit in the Cenvat account had been made, as evidenced by the ST-3 returns submitted for the relevant quarter. The tribunal found merit in the appellant's argument, stating that the rejection based on non-debiting was unfounded. Additionally, the rejection was also challenged on the grounds that the balance in the Cenvat Account had been brought below the refund claim, violating Rule 2(g) of the notification. However, considering the debit shown in the ST-3 returns, compliance with both clauses 2(h) and 2(g) was established. Consequently, the rejection of the refund claim for the specified period was deemed unsustainable and set aside.

In conclusion, the tribunal allowed the appeals, directing the Refund Sanctioning Authority to process the refund claims on their merits, emphasizing the importance of adhering to the correct filing dates and compliance with relevant notifications.