2024 (11) TMI 1230 - AT - Service Tax

Refund claim - appellants plea that the service receiver had already paid an amount - appellant s claim is that the entire amount of service tax paid by them was to be considered as deposit u/s 35FF of the Central Excise Act, 1944 and claimed refund of the same - HELD THAT - In the present case, the refund arose only after the passing of the de novo order wherein the duty amount of Rs.12,99,411/- was dropped. The provisions of Section 11B Clause (ec), the relevant date for filing a refund claim is stated as follows 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 date of such judgment, decree, order or direction . Therefore, the appellant should have filed a refund claim on or before 20.03.2021, however, admittedly the appellant has filed a refund claim under Section 35FF of Central Excise Act, 1944 only on 07.05.2021 which has been received by the Revenue on 15.06.2021, therefore, the claim is barred by limitation as per the provisions of the Section 11B of the Central Excise Act, 1944. Hence, the Commissioner (Appeals) has rightly held that pre-deposit amount of 7.5% of Rs.16,97,430/- is only eligible as refund. Whether notice is to be issued before rejecting any refund claim as claimed by the appellant? - In the instant case, the appellant had made his claim only on the ground that the entire amount is to be considered as pre-deposit under 35FF of the Central Excise Act 1944. The appellant appeared before the Original Authority for the personal hearing held on 18.08.2021 and had filed written submissions 18.08.2021 which was taken on record. The order was passed taking into consideration the submissions made by the appellant. As rightly observed the Commissioner (Appeals), there is no violation of principles of natural justice as claimed by the appellant.

Summary

Issues Involved:

1. Whether the refund claim should be processed under Section 11B of the Central Excise Act, 1944.
2. Whether the refund claim is barred by limitation.
3. Whether a show-cause notice is required before rejecting a refund claim.

Issue-wise Detailed Analysis:

1. Processing of Refund Claim under Section 11B:

The primary issue was whether the refund claim made by the appellant should be processed under Section 11B of the Central Excise Act, 1944. The appellant argued that the entire amount paid should be treated as a pre-deposit under Section 35FF of the Central Excise Act, 1944, and thus, should not be subjected to the provisions of Section 11B. However, the tribunal found that only the mandatory pre-deposit amount of 7.5%/10% is considered as a deposit under Section 35FF. Any amount paid over and above this pre-deposit during audit or investigation must adhere to the refund process outlined in Section 11B. The tribunal upheld the Commissioner (Appeals)'s decision that the refund claim must follow Section 11B, and thus, the appellant's claim on this ground was rejected.

2. Limitation Period for Refund Claim:

The tribunal examined whether the refund claim was barred by limitation under Section 11B. The relevant date for filing a refund claim, according to Section 11B, is the date of the judgment, decree, order, or direction that results in the refund. In this case, the de novo order was passed on 20.03.2020, and the appellant should have filed the refund claim by 20.03.2021. However, the claim was filed on 07.05.2021 and received by the Revenue on 15.06.2021, making it time-barred. Consequently, the tribunal agreed with the Commissioner (Appeals) that the refund claim was rightfully rejected due to the limitation period.

3. Requirement of Show-Cause Notice:

The appellant contended that the rejection of the refund claim without a show-cause notice violated the principles of natural justice. The tribunal considered whether a show-cause notice was necessary before rejecting the refund claim. The Commissioner (Appeals) had determined that since the appellant was given a personal hearing and an opportunity to present their case, there was no violation of natural justice. The tribunal supported this view, referencing a decision by the Hon'ble High Court of Madras, which emphasized that adjudication orders should not traverse beyond the scope of the show-cause notice. In this instance, the tribunal found no such violation, as the appellant was heard, and their submissions were considered. Therefore, the tribunal concluded that there was no requirement for a show-cause notice in this case.

Conclusion:

The tribunal upheld the impugned order and dismissed the appeal, affirming that the refund claim must be processed under Section 11B, was barred by limitation, and that there was no violation of natural justice in the absence of a show-cause notice.