2025 (4) TMI 1184 - AT - Central Excise

Refund claim rejected on the ground of being barred by time limitation - relevant date for the purpose of limitation under Section 11B(5)(B)(ec) when the refund arises as a consequence of a judgment or order of the Appellate Tribunal - HELD THAT - In the present case the Tribunal passed the order on 01.11.2018 in the presence of both the parties and the appellant was very much aware of the decision of the Tribunal as the order was passed on the date of hearing itself; but the appellant filed refund application on 16.12.2019 which is beyond the period of one year. There is a statutory provision as prescribed under Section 11B (5) (B) (ec) of the Central Excise Act 1944 which says that 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 will be the relevant date and the limitation period of one year will start from that date. This issue of relevant date has been considered by the Tribunal in the case of Prontos Steerings Ltd Vs CCE Chandigarh-I 2011 (8) TMI 898 - CESTAT NEW DELHI where it was held that it is clear that when some order of Court or an authority affects an assessee the limitation would start from the date on which the order was communicated to the assessee or the date on which it was pronounced or published so that the party affected by which have reasonable opportunity of knowing of the passing of such an order and what it contains. Further the statutory provision also prescribed that the period of one year would start from the date of the judgment on which the same is pronounced in the open court. Therefore in the present case the date of communication of the Tribunal s order is 01.11.2018 on which the order was pronounced in the open court in the presence of the appellant s counsel but the refund application was filed on 16.12.2019; hence the refund claim filed by the appellant on 16.12.2019 is beyond the prescribed period of one year accordingly is clearly time barred. Conclusion - i) The limitation period prescribed under Section 11B for filing the refund claim is one year from the relevant date. The term relevant date in the case where the duty becomes refundable as the consequences of judgment decree order or direction of the Appellate Authority Appellate Tribunal or any Court has been defined in Explanation B (ec) of Section 11B as the date of such judgment decree or direction . ii) The refund claim filed by the appellant is beyond the prescribed period of one year accordingly is clearly time barred. Appeal of appellant dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Tribunal are:

- Whether the refund claim filed by the appellant is barred by limitation under Section 11B of the Central Excise Act, 1944.

- What constitutes the "relevant date" for the purpose of limitation under Section 11B(5)(B)(ec) when the refund arises as a consequence of a judgment or order of the Appellate Tribunal.

- Whether the limitation period for filing refund starts from the date of pronouncement of the Tribunal's Final Order in open court or from the date of receipt of the certified copy of the order by the appellant.

- The applicability of precedents regarding the interpretation of the "relevant date" and the commencement of limitation period for refund claims under the Central Excise Act.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Whether the refund claim is time barred under Section 11B of the Central Excise Act, 1944

Legal Framework and Precedents: Section 11B of the Central Excise Act, 1944, prescribes a limitation period of one year from the "relevant date" for filing refund claims. Explanation B(5)(B)(ec) defines the relevant date in cases where duty becomes refundable as a consequence of a judgment or order of the Appellate Tribunal or any court as "the date of such judgment, decree, order or direction". The Supreme Court in Collector Vs. M.M. Rubber Co. has held that limitation starts from the date on which the order was communicated or pronounced in open court, emphasizing the necessity of the affected party having reasonable opportunity to know the order.

Court's Interpretation and Reasoning: The Tribunal noted that the Final Order allowing the Cenvat Credit was pronounced in open court on 01.11.2018 in the presence of the appellant's counsel. This date is the relevant date for limitation purposes. The appellant filed the refund claim on 16.12.2019, which is beyond the one-year limitation period.

Key Evidence and Findings: The appellant argued that they never received the certified copy of the Final Order and only obtained it on 18.12.2019, after which they filed the refund claim. The appellant relied on a letter dated 28.02.2020 from the CESTAT Registry confirming the supply of the certified copy on 18.12.2019. However, the Tribunal found that since the order was pronounced in open court in the presence of appellant's counsel, the appellant had constructive knowledge of the order on 01.11.2018.

Application of Law to Facts: The Tribunal applied the statutory provision that the limitation period starts from the date of pronouncement of the order in open court. The appellant's contention that the limitation period should start from the date of receipt of the certified copy was rejected as inconsistent with the statutory language and settled legal principles.

Treatment of Competing Arguments: The appellant's reliance on precedents supporting limitation from the date of communication was considered; however, the Tribunal distinguished these on the ground that the order was pronounced in open court in the presence of appellant's counsel, thereby constituting effective communication. The Revenue's argument that the limitation period starts from the date of pronouncement was accepted as aligned with the statute and judicial precedents.

Conclusion: The refund claim filed on 16.12.2019 was beyond the one-year period from 01.11.2018 and thus time barred under Section 11B.

Issue 2: Interpretation of the "relevant date" under Section 11B(5)(B)(ec) of the Central Excise Act, 1944

Legal Framework and Precedents: Section 11B(5)(B)(ec) defines the relevant date for limitation as the date of the judgment, decree, order, or direction of the appellate authority or court. The Tribunal relied on the decision in Prontos Steerings Ltd Vs CCE, Chandigarh-I, which in turn relied on the Supreme Court's ruling in Collector Vs. M.M. Rubber Co., emphasizing that limitation starts from the date the order is communicated or pronounced to the affected party.

Court's Interpretation and Reasoning: The Tribunal emphasized that when an order is pronounced in open court in the presence of the affected party or their counsel, the date of pronouncement is the relevant date. This is because the party is deemed to have knowledge of the order at that time, satisfying the principle of actual or constructive knowledge necessary for limitation to commence.

Key Evidence and Findings: The appellant's counsel was present when the order was pronounced on 01.11.2018. The Tribunal found that this fact establishes knowledge of the order irrespective of when the certified copy was physically received.

Application of Law to Facts: The statutory language and judicial interpretation support that the relevant date is the date of pronouncement in open court when the party is present or represented, not the date of receipt of certified copy.

Treatment of Competing Arguments: The appellant argued that the refund claim cannot be filed without the certified copy and thus the limitation should start from its receipt. The Tribunal rejected this, holding that the limitation period cannot be extended on such grounds when the order was already known through pronouncement.

Conclusion: The relevant date for limitation under Section 11B(5)(B)(ec) is the date of the order's pronouncement in open court, here 01.11.2018.

Issue 3: Applicability of precedents and statutory interpretation in determining limitation period

Legal Framework and Precedents: The Tribunal extensively referred to Prontos Steerings Ltd and the Supreme Court's decision in Collector Vs. M.M. Rubber Co., which establish that limitation begins on the date the order is communicated or pronounced to the affected party. The Tribunal noted that these precedents form settled law on the interpretation of limitation under Section 11B.

Court's Interpretation and Reasoning: The Tribunal applied these precedents to the facts, finding that the appellant had knowledge of the order on 01.11.2018 and thus the limitation period commenced then.

Key Evidence and Findings: The presence of appellant's counsel during pronouncement and the statutory provision itself were pivotal in the Tribunal's reasoning.

Application of Law to Facts: The Tribunal rejected the appellant's reliance on the date of receipt of certified copy as the starting point for limitation, emphasizing that the statutory language and judicial precedents require knowledge of the order, which was satisfied by pronouncement.

Treatment of Competing Arguments: The appellant's argument based on procedural delay in receiving certified copy was considered but found insufficient to override the clear statutory provision and judicial interpretation.

Conclusion: The limitation period under Section 11B starts from the date of pronouncement of the order in open court, as established by binding precedents.

3. SIGNIFICANT HOLDINGS

- "The limitation period prescribed under Section 11B for filing the refund claim is one year from the relevant date. The term 'relevant date' in the case where the duty becomes refundable as the consequences of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any Court has been defined in Explanation B (ec) of Section 11B as the 'date of such judgment, decree or direction'."

- "For seeking the remedy, the limitation starts from the date on which the order was communicated to him or the date on which it was pronounced or published under such circumstances that the parties affected by it have a reasonable opportunity of knowing of passing of the order and what it contains."

- "The date of communication of the Tribunal's order is 01.11.2018, on which the order was pronounced in the open court in the presence of the appellant's counsel, but the refund application was filed on 16.12.2019; hence, the refund claim filed by the appellant on 16.12.2019 is beyond the prescribed period of one year, accordingly, is clearly time barred."

- The Court upheld the impugned order rejecting the refund claim as time barred under Section 11B of the Central Excise Act, 1944, dismissing the appeal.