2021 (12) TMI 335 - HC - Central Excise

Relevant date for counting the period of limitation for filing refund claim - whether it is the date on which the final price was communicated by KSEB to the appellant or the different dates on which duties were paid under provisional prices? - Price variation clause - retention of excess amount of duty when it is not legitimately due - sanction of excess amount of excise duty paid in circumstances beyond the control of the appellant - principles of equity - HELD THAT - It is not in dispute that, in the case on hand, the claim for refund is made beyond one year from the date of payment of duty by the appellant as stipulated by Explanation (f). As rightly held in the orders under appeal, explanation (eb) is not attracted to the facts and circumstances of this case. The period of limitation since being a mixed question of law and fact, the decisions which have been rendered in different circumstances are not applicable to the issue involved in this case and are clearly distinguishable. The questions are answered against the appellant and in favour of respondent - Appeal dismissed.

Summary

Issues:
- Rejection of claim for refund of excise duty beyond the prescribed period of limitation under Section 11B of the Central Excise Act 1944.

Analysis:
The dispute in this Central Excise Appeal pertains to the rejection of the appellant's claim for a refund of ?18,19,717 made on 09.02.2012, following a downward revision of prices by the Kerala State Electricity Board (KSEB). The appellant, a manufacturer of transformers, had incorporated a price variation clause in its contracts to adjust for raw material price fluctuations. The appellant credited differential excise duty to the Department in previous instances of upward price revisions. However, upon the downward price revision by KSEB in 2011, the appellant claimed a refund, which was rejected by the Department citing limitation under Section 11B of the Act. The Tribunal upheld this decision, leading to the current second appeal under Section 35G of the Act.

The substantial questions of law raised by the appellant include the relevant date for counting the limitation period, the relevance of the price variation clause, the retention of excess duty by the Department, and seeking justice based on equity principles. The appellant argued that the starting point for limitation should be after final assessment, relying on precedents to support this position. On the other hand, the respondent contended that Explanation (f) of Section 11B applies, making the date of duty payment crucial for refund claims. The respondent emphasized that Explanation (eb) does not apply due to the absence of a final assessment for the subject period.

Upon considering the arguments, the Court found that the appellant's contentions were akin to those presented before the Tribunal. It was noted that the claim for refund exceeded the one-year limitation from the duty payment date, as per Explanation (f). The Court concluded that Explanation (eb) was inapplicable to the case, and the arguments presented did not warrant a different interpretation. The Court held that the decisions cited by the parties were not directly relevant to the current issue of limitation. Consequently, the Court upheld the rejection of the appellant's refund claim, ruling in favor of the respondent.

In light of the above analysis, the Court dismissed the appeal, emphasizing the validity of the grounds for rejecting the refund claim and finding no merit in the appellant's arguments. The decision was made without awarding costs to either party.