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2023 (1) TMI 741 - AT - Service TaxRejection of refund claim - hit by limitation of one year as prescribed under section 11 B of Central Excise Act, 1944 - HELD THAT - The amount of Rs.19,34,552/- the refund whereof was claimed the entire amount irrespective it was above 7.5 % / 10% of Section 35 F of Central Excise Act but was not at all an amount of duty rather it was still an amount with the Department as a deposit made by the appellant. The Department has no authority to retain the said amount. Such retention is otherwise specifically barred in terms of article 265 of Constitution of India. Commissioner (Appeal) has wrongly invoked section 11 B of Central Excise Act for applying the time limitation prescribed under the said section while rejecting the impugned refund claim - Hon ble Apex Court in SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERSa 2006 (1) TMI 55 - SUPREME COURT had clarified that no time limit can be made applicable for the refunds with respect to the amount of deposits/ pre-deposits. Appeal allowed.
Issues Involved:
1. Whether the refund claim is hit by the limitation of one year as prescribed under Section 11B of the Central Excise Act, 1944? Issue-wise Detailed Analysis: 1. Limitation under Section 11B of the Central Excise Act, 1944: - The appellant challenged the rejection of their refund claim, arguing that Section 11B, which pertains to the refund of duty, was wrongly invoked by the Department. The appellant contended that the amount in question was not a duty but a pre-deposit made during the investigation. - The appellant cited the Tribunal's final order dated 14.11.2018, which absolved them of duty liability, and the stay order dated 04.08.2015, which considered the amount as a pre-deposit. - The appellant relied on the Board's Circular No. 984/08/2014-CX, which clarifies that payments made during investigations are considered pre-deposits under Section 35F of the Central Excise Act or Section 129E of the Customs Act. The Circular also states that pre-deposits are not payments of duty. - The appellant further relied on the Allahabad High Court's decision in Ebiz.Com Pvt. Ltd. vs. Commissioner of Central Excise, Customs and Service Tax, which held that amounts deposited during investigations remain in the nature of pre-deposits until appropriated by the Department. - The Department, represented by the Authorized Representative, argued that the Commissioner (Appeals) correctly applied Section 11B, considering the date of the Appellate Tribunal's order as the relevant date. The Department also referenced the Circular dated 16.09.2014, asserting that amounts exceeding the stipulated pre-deposit percentages should not be treated as deposits under Section 35F. - The Tribunal examined Section 11B and noted that it applies only to refunds of duty and interest paid on such duty. The Tribunal found that the amount in question was paid during the investigation and was considered a pre-deposit by the stay order dated 04.08.2015. - The Tribunal supported its conclusion by referencing the Supreme Court's decision in Sandvik Asia Ltd. vs. Commissioner of Income Tax, Pune, which held that amounts deposited during investigations are pre-deposits, and interest is payable on such amounts if the assessee succeeds in the appeal. - The Tribunal also cited its decision in M/s. Parle Agro Pvt. Ltd. vs. Commissioner, GST, which clarified that Section 11B does not apply to refunds of revenue deposits, as these are not payments of duty. - The Tribunal concluded that the amount of Rs. 19,34,552/- was a deposit and not a duty, and thus, Section 11B's limitation did not apply. The Tribunal held that the Department had no authority to retain the deposit and that such retention was barred by Article 265 of the Constitution of India. - Consequently, the Tribunal set aside the Commissioner (Appeals)' order and allowed the refund claim, emphasizing that no time limit applies to refunds of deposits or pre-deposits. Conclusion: The Tribunal ruled in favor of the appellant, determining that the refund claim was not subject to the one-year limitation under Section 11B of the Central Excise Act, 1944, as the amount in question was a pre-deposit and not a duty. The appeal was allowed, and the order under challenge was set aside.
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