REFUNDS - Central Excise Practice Manual (OLD) - Central Excise

10. REFUNDS 10.1 Refund application: The application for refund in terms of Section 11B of the Act is to be made to the jurisdictional Assistant/Deputy Commissioner in duplicate within one year from the relevant date. The refund claim should be complete in all respects containing the important details such as grounds for filing the refund claim, proof for payment of the duty amount concerned, worksheet for quantification of the refund amount and supported by relevant documents. The relevant date in respect of the manufacturer-assessee is generally the date of payment of duty. There are various relevant dates prescribed in Section 11B for export rebate, for goods returned for repairs etc. In case where the duty was paid provisionally, the relevant date shall be the date of adjustment of duty after the finalization of the assessment. In the case of goods exempted by a special order under Section 5A (2) of the Act, the time limit of one year will be computed from the date of issue of such order. No refund/rebate claim will be withheld on the ground that an appeal has been filed against the order giving relief, unless stay order has been obtained to that effect ( CBEC Circular No. 398/31/98-CX dated 2-6-1998 ). 10.2 Refund of pre-deposit: The time limit of one year is not applicable where the amount was predeposited under Section 35F of the Act for availing the right of appeal or where duty had been paid under protest or where refund arises out of quasijudicial orders passed in adjudication, Appeal or revision or out of Court judgments. For refund of the pre-deposits under Section 35F of the Act, a simple letter of the person who had made such pre deposit would suffice. Refund of predeposit will be given within 3 months from the date of the order passed by the Appellate Tribunal / Court or other Final Authority unless there is a stay granted by a superior Court. 10.3 Unjust enrichment: Refund will be granted to the claimant only if he has not passed on the incidence of duty to any other person. Otherwise, the refund amount would be sanctioned and credited to the Consumer Welfare Fund. The onus of proof that he has not passed on the incidence of duty to any other person is on the claimant. The buyer of the goods who has ultimately borne the tax incidence has the right to claim the refund within one year from the date of purchase of the goods by him. 10.4 Exclusion from unjust enrichment: The following types of refunds have been kept out of the bar of unjust enrichment: (a) Rebate on account of export; (b) Unspent advance deposits lying in balance in the PLA; (c) Refund of Cenvat Credit; (d) Duty of Excise paid and borne by the manufacturer, if he had not passed it on to any other person. (e) Duty of Excise paid and borne by the buyer, if he had not passed it on to any other person. 10.5 Process of the claim: The process of disposal of the refund claim is a quasi-judicial function and therefore, the jurisdictional Assistant/Deputy Commissioner (the sanctioning authority) has to issue a show cause notice to the claimant and hear him, if the claim is proposed to be rejected in full or in part. The claims involving an amount of Rs. 5 lakhs or above would be sanctioned after pre-audit of the same in the Commissionerate Hqrs. The claims involving an amount below Rs. 5 lakhs would be sanctioned by the competent authority and later sent for post-audit. 10.6 Time limit for disposal of the claim: The refund claim would be disposed off within 3 months from the date of filing of the claim complete in all respects. If the claim is not disposed off within the stipulated period, the claimant would be entitled to interest at the rate of 6% per annum on the refund amount sanctioned.