2022 (9) TMI 676 - AT - Central Excise

Refund of interest deposited by the appellant (under protest) - denial on the ground of being time barred - it is alleged that refund claim ought to have been filed by the Appellant within one year of Final Order of Tribunal dated 31.3.2012, which is the relevant date and a show cause notice dated 11.8.2017 was issued to the appellant proposing to reject the refund claim of the said interest amount - HELD THAT - It is apparent that the interest has been paid by the appellant under protest only that too after the issuance of Memorandum-cum-notice of demand dated 1.12.2005 to them for non-payment of interest in terms of adjudicating order dated 21.10.2004. Section 11B of the Act makes it clear that an application for refund of duty of excise has to be made in the prescribed form before the expiry of one year from the relevant date. Explanation (B) to Section 11B ibid states what is meant by relevant date. As per Clause (ec) of Explanation (B) to Section 11B, in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the relevant date is the date of such judgment, decree, order or direction. No doubt, the appellant became entitled to claim the said refund post the final order of CESTAT dated 31.3.2012, however, admittedly the Revenue filed an appeal against that order before Hon ble High Court of Rajasthan who vide order dated 21.4.2017 dismissed that appeal. It is not disputed that the refund claim has been filed, post this dismissal of Revenue s appeal, on 16.5.2017. Time Limitation - HELD THAT - The period of one year as per Section 11B(B)(ec) ibid is the date of decision of Hon ble High Court and not the date of Final Order of CESTAT, as the appeal before Hon ble High Court of Rajasthan being the one filed by the Department. Hence, the findings of authority below rejecting the refund as time barred are totally misplaced - Otherwise also, admittedly the payment of interest was made pursuant to the direction of Departmental Authorities after the issuance of Memorandum-cum-notice of demand dated 1.12.2005 therefore it cannot be considered as voluntary payment and has to be treated as payment under protest and Section 11B proviso is clear enough to say that the limitation of one year shall not apply where any duty/interest on such duty has been paid under protest. The Appeal filed by the Appellant stands allowed

Summary

Issues:
Refund of interest amount under protest denied by the Commissioner (Appeals) challenged in the appeal.

Analysis:
The appellant challenged the denial of the refund of interest amount of Rs. 6,36,889/- paid under protest in the appeal. The demand for Rs.16,89,669/- along with interest and penalty was confirmed by the Adjudicating Authority, leading to a Memorandum-cum-notice of demand for non-payment of interest issued to the appellant. The appellant paid the interest under protest after a defaulter notice was issued. The Tribunal allowed the appeal filed by the appellant, setting aside the demand. The Department's appeal against the Tribunal's order was dismissed by the Hon'ble High Court, finalizing the appellant's entitlement to the refund.

The appellant filed a refund claim of duty on 19.2.2018, which was denied as time-barred by the Commissioner (Appeals). However, the Tribunal, in another case, allowed a similar refund claim, emphasizing that the relevant date for filing the refund claim is the date of the final judgment that finalizes the entitlement to the refund. The Tribunal held that the refund claim filed on 19.02.2018 was within one year of the final judgment by the High Court, making it timely.

Similarly, the appellant filed a refund claim of interest on 16.5.2017, which was also denied as time-barred. The Tribunal found that the payment of interest was made under protest after a notice of demand was issued, making it a non-voluntary payment. The Tribunal clarified that the relevant date for filing the refund claim is the date of the High Court's final judgment, not the date of the Tribunal's order. The Tribunal allowed the appeal, stating that the rejection of the refund claim as time-barred was unjustified.

In conclusion, the Tribunal allowed the appeal filed by the appellant, granting consequential relief as per law. The order was pronounced in the open court on 15.09.2022.