2009 (2) TMI 437 - AT - Central Excise

Refund - period of limitation - Notification 32/2005 CE - refund claim was filed beyond normal period of limitation of 6 months - Held that made within the time limit prescribed in Section 11B are to be treated to have been filed in time - time limit prescribed in the Notification for claiming refund is a procedural condition and failure to fulfill the same cannot affect the entitlement of the target community to receive the relief. We find that the apex Court had observed as under in M/s GIRDHARI LAL AND SONS Versus BALBIR NATH MATHUR AND OTHERS (1986 -TMI - 78846 - Supreme Court of India) as regards failure to satisfy procedural conditions to quality for eligibility to relief provided in an exemption notification.

Issues Involved:
1. Admissibility of refund claims filed beyond the time limit prescribed in the notification.
2. Applicability of the principle of unjust enrichment in granting refunds.
3. Eligibility for refund when duty-paying documents are not in the name of the claimant.

Detailed Analysis:

1. Admissibility of Refund Claims Filed Beyond the Time Limit Prescribed in the Notification:

The appeals relate to claims for refund of excise duty under Notification No. 32/05-CE as amended by Notification No. 35/05, which exempted cement and steel used in the construction of houses for tsunami victims from excise duty. The Commissioner (Appeals) had rejected the claims due to non-compliance with the time limits prescribed, relying on the Supreme Court's judgments that emphasized strict interpretation of eligibility clauses in exemption notifications. However, the appellants argued that the delay was due to procedural difficulties and not substantive non-compliance. They contended that the notification was a beneficial legislation and should not be construed in a manner that defeats its purpose. The Tribunal held that the time limit prescribed in the notification is a procedural condition and failure to fulfill it should not affect the entitlement to receive relief. The Tribunal directed that refund claims should not be denied on the ground of limitation if they were filed within the time limit prescribed in Section 11B of the Central Excise Act, 1944.

2. Applicability of the Principle of Unjust Enrichment in Granting Refunds:

The Commissioner (Appeals) had vacated orders of the original authority denying refund claims on the grounds of unjust enrichment. The Tribunal noted that the CBEC's circular clarified that the refund envisaged in the notifications was designed to give effect to the exemption and not on account of any excess payment of excise duty by the manufacturer. Therefore, the provisions of Section 11B of the Act did not apply to these notifications. The Tribunal held that the claims were not hit by unjust enrichment as the goods were used for the intended purpose and the duty had been paid.

3. Eligibility for Refund When Duty-Paying Documents Are Not in the Name of the Claimant:

The Tribunal observed that the notification did not stipulate that duty-paying documents must be in the name of the claimant. This position was also clarified by the CBEC. However, in one appeal (E/350/2008), the original authority had noted that the duty-paying documents furnished did not indicate the name of the claimant and were issued by dealers not registered with the department. The Tribunal remanded this appeal to allow the respondents to establish that the duty claimed as refund had been paid by the manufacturers concerned. For other appeals, the Tribunal allowed the claims as the duty-paid nature of the goods and their end use were certified by the District Collector.

Conclusion:

The Tribunal allowed the appeal filed by CASA and dismissed three appeals filed by the revenue, emphasizing that procedural conditions should not defeat the purpose of beneficial legislation. The appeal involving duty-paying documents not in the claimant's name was remanded for further verification. The judgment underscores the importance of interpreting exemption notifications in a manner that advances their intended relief and purpose.

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