9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (1) TMI 1254 - AT - Central ExciseRefund of Excise duty paid under protest - appellant s activity of fabricating transmission towers amounting to manufacture or not - time limitation under Section 11B of the Central Excise Act - HELD THAT - The amount collected by way of Central excise duty was illegal as the activity itself did not involve any manufacture and the same cannot be allowed to be retained by the Government. On the principle that tax can be collected only by authority of law the observations of the Tribunal in the case of COMMISSIONER OF CUSTOMS DELHI VERSUS POLYGLASS ACRYLIC MFG. CO. P. LTD. 2011 (6) TMI 305 - CESTAT DELHI that when Central excise duty is collected illegally the same cannot be retained by the Government supports the case of the appellant. Such is the mandate of Article 265 of the Constitution of India. Once it is held that the Government is not entitled to retain the amount deposited by the appellant the next issue is regarding the time limit for reversing the said amount to the assessee. The Madras High Court in M/S. NATRAJ AND VENKAT ASSOCIATES VERSUS ASSISTANT COMMISSIONER SERVICE TAX 2009 (10) TMI 36 - MADRAS HIGH COURT and the Punjab and Haryana High Court in INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX. NEW DELHI 2010 (4) TMI 625 - PUNJAB HARYANA HIGH COURT held that once the tax was not payable at all time limit does not apply for filing the refund of the said amount. The other issue that under protest was not made in the prescribed format is irrelevant. It is a settled principle that on mere procedural technicalities the relief cannot be denied which otherwise is available to a party. For the period prior to the introduction of Rule 233B (01.06.1981) there was no specific provision prescribing any specific mode of endorsing under protest and therefore the appellant cannot be non-suited for not making proper endorsement. The refund claim cannot be rejected for non-compliance with the provisions of Rule 233B. The endorsement under protest on the gate passes by the appellant is sufficient to say that the appellant paid the duty under protest and hence cannot be denied the refund of the amount illegally collected by the Department. The Apex Court in SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS 2006 (1) TMI 55 - SUPREME COURT with reference to the provisions of the Income Tax Act has observed that in view of the express provisions of the Act the assessee is entitled to compensation by way of interest on the delay in the payment of amounts lawfully due to the appellant which were wrongly withheld by the Department for an inordinate long period. The Act itself recognised in principle the liability of the Department to pay interest where the amount deposited by the assessee is unduly retained. Conclusion - i) Duty was collected by the Department under mistake of law for which no time limit applies and therefore the refund claim on the ground of delay has been wrongly rejected. ii) The endorsement on the gate passes under protest is sufficient to indicate that the appellant has paid the duty under protest and hence the refund claim cannot be rejected as time barred. iii) The retention of the amount which is in the nature of revenue deposit would be wholly unjustified being violative of Article 265 of the Constitution. iv) The appellant is entitled to the refund claim along with interest @ 12% per annum from the date of refund claim was rejected. The impugned order is set aside and the Department is directed to release the refund along with interest to the appellant - Appeal allowed.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS 1. Fabrication of Transmission Towers as "Manufacture" The relevant legal framework involves the definition of "manufacture" under the Central Excise Act. The Court referenced the Tribunal's decision in M/s. S.A.E. (India) Ltd. v. CCE, which held that the fabrication and erection of structural steel do not constitute manufacture. The appellant argued, based on this precedent, that its activities were not subject to excise duty. The Court agreed with the appellant, emphasizing that the duty collected was not excise duty as it was not related to "manufacture." The amount collected was deemed a revenue deposit, not a tax, as the activity did not meet the statutory definition of manufacture. 2. Time-Barred Refund Claim The legal framework involves Section 11B of the Central Excise Act, which prescribes a six-month limitation period for refund claims unless the duty is paid "under protest." The appellant's claim was initially rejected as time-barred due to a lack of documentary evidence of protest. The Court found that the endorsement of "under protest" on gate passes and documents was sufficient to demonstrate that the duty was paid under protest. Thus, the limitation period under Section 11B did not apply. The Court referenced decisions from the Madras High Court and Punjab and Haryana High Court, which held that when tax is collected without authority, the time limit for refunds does not apply. 3. Payment "Under Protest" The Court examined whether the procedural requirements under Rule 233B were met. The appellant argued that prior to the introduction of Rule 233B, no specific procedure was prescribed, and the endorsements on gate passes were adequate. The Court agreed, noting that procedural technicalities should not deny substantive rights. It referenced several precedents, including India Cements Ltd. v. C.C.Ex. and Indian Pistons Ltd. v. C & Central Excise, which held that Rule 233B should not be construed narrowly, and that the endorsement on gate passes was a sufficient form of protest. 4. Entitlement to Refund and Interest The appellant sought a refund of the duty paid, arguing that it was collected without legal authority. The Court held that the government could not retain the amount as it was collected under a mistake of law, violating Article 265 of the Constitution. Regarding interest, the Court referenced the Supreme Court's decision in Sandvik Asia Ltd. v. Commissioner of Income Tax-I, Pune, which recognized the entitlement to interest on delayed refunds. The Court directed that the refund be paid with interest at 12% per annum, consistent with the Tribunal's practice in similar cases. SIGNIFICANT HOLDINGS The Court made several crucial determinations:
The Court concluded that the refund claim was wrongly rejected on the ground of delay and directed the Department to release the refund along with interest. The appeal was allowed with consequential benefits.
|
