M/S.Sumetco Alloys Pvt. Ltd vs Cce, Jaipur

[Arising out of Order-in-Appeal No.40(VC)CE/JPR-1/2014 dated 28.03.2014 passed by the Commissioner (Appeals), Central Excise, Jaipur-1]

For approval and signature:

HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

1. Whether Press reporters may be allowed to see the

order for publication as per Rule 27 of the CESTAT

(Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the

CESTAT (Procedure) Rules, 1982 for publication in

any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy

of the Order?

4. Whether Order is to be circulated to the Departmental

authorities?

__________________________________________________

M/s.Sumetco Alloys Pvt. Ltd. Appellant

Vs.

CCE, Jaipur  Respondent

Present for the Appellant : Shri Ravinder Singh, Consultant

Present for the Respondent: Shri G.R. Singh, DR

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 21.05.2015

FINAL ORDER NO. 51769/2015

PER: S.K. MOHANTY

Rejection of refund application on the ground of limitation is the subject matter of present dispute for which this appeal has been preferred by the appellant.

2. Brief facts of the case leading to this appeal are as follows:-

2.1 Preventive Officials of Central Excise Department have visited the appellants factory on 07.01.2005 and during the course of investigation by the authorities, the appellant had paid Rs.1,04,889/- through TR-6 Challan dated 16.02.2005. The appellant also deposited Rs.1,60,646/- and Rs.50,000/- as security against bank guarantee No.304 & 305 dated 14.02.2005 for provisional release of seized goods and vehicles respectively. The above Bank guarantee executed has been en-cashed on 20.12.2005 in favour of the Central Excise Department. Proceedings initiated by the Department was culminated in the Order-in-Original No.107/2005 dated 19.11.2005 passed by the Joint Commissioner, Central Excise, Jaipur-I. The said Order in original was challenged by the appellant in appeal before the Commissioner (Appeals). The appeal was allowed in favour of the appellant vide the Order- in-Appeal No.43-44 (MPM) CE/JPR-I/2006 dated 15.02.2006. Consequent upon the said favourable order, the appellant had lodged the refund claim on 30.07.2012 before the original authority claiming refund of Rs.3,15,515/-. The refund application was rejected by the Asstt. Commissioner of Central Excise vide order dated 29.10.2012 on the ground that as per the statutory requirements, the refund claim has to be lodged within the period of one year from the relevant date, which in the present case is 15.02.2006, when the order was passed by Commissioner (Appeals) in allowing the appeal of the appellant. According to the said adjudication order, since the claim has been lodged beyond the period of one year from the relevant date i.e. 15.02.2006, the same is barred by limitation. The adjudication order was upheld by the Commissioner (Appeals) vide the impugned order, against which the present appeal has been preferred by the appellant before this Tribunal.

3. The ld. Consultant Shri Ravinder Singh, appearing for the appellant submits that the orders passed by both the lower authorities below have recorded incorrect facts, inasmuch as, the subject refund claim has not been field under section 11B of the Central Excise Act and the same has been claimed through a plain and simple letter, without mentioning any statutory provision, under which the refund is claimed. Thus, according to the ld. Consultant, since the appellant had claimed refund of amount paid during investigation, which cannot be construed as duty of excise, the provisions of section 11B of the Central Excise Act will have no application and as such, the ground of limitation assigned for rejection of the refund application in the impugned order is not proper and justified.

4. Countering the submission made by the appellant, the ld. DR, Shri G.R. Singh appearing for the Revenue submits that pursuant to the Order- in-Appeal dated 15.02.2006 passed by the Commissioner (Appeals), the refund claim has been lodged by the appellant. Mere non-referring to section 11B in the said application will not support the case of the appellant that the same has not been filed under section 11B of the Act. He further submits that the only active provision which deals with sanction of refund is contained in section 11 B of the Act and no where else. According to him, since the refund application has been field beyond the period of one year from the date of order dated 15.02.2006, the same is clearly barred by limitation of time.

5. I have heard the ld. Counsel for both sides and perused the records.

6. The short question involved in this appeal is whether amount deposited during the course of investigation should be considered as duty of excise, for which the provisions of section 11B of the Central Excise Act 1944 can be considered for the purpose of computation of the limitation period. It is an admitted fact on record that the execution of bond by the Appellant was not towards payment of central excise duty on removal of excisable goods from the factory. The incidence of levy of Central Excise duty is manufacture or production of excisable goods. For administrative convenience, the liability for payment of Central Excise duty has been extended to the time when the goods are removed from the factory. If the duty is paid with regard to the removal of excisable goods from the factory, then obviously the provisions of section 11B of the Act will have the application, since the said section provides for filing refund application claiming refund of any duty of excise and interest, if any, paid on such duty. Since the amount paid during the course of investigation conducted by the preventive wing, which is not attributable to clearance of finished product from the factory, the amount deposited will be construed as mere deposit and not to be considered as payment of duty. Hence, in absence of non-consideration of such deposit as payment of duty of excise, in my considered view, for claiming refund of such amount, the provisions of section 11B will have no application. I also find that the refund claim in the present case has not been lodged under section 11B of the Central Excise Act. Rather, the claim application has been filed before the appropriate authority in a plain letter-form without mentioning therein any statutory provisions under which the claim is lodged. Thus, the authorities below have erroneously assumed that the claim being filed under section 11B, time limit prescribed therein should have the application and the claim having been lodged beyond one year from the relevant date, is barred by limitation of time. Such views expressed by the authority below are not in conformity with the statutory provisions.

7. The observations recorded above are duly supported by the judgements delivered by the Honble Supreme Court in the case of Oswal Agro Mills Ltd. vs. Asstt. Collector of Central Excise, Ludhiana and Honble Madras High Court in the case of Commissioner of C. Ex., Chennai-II vs. UCAL Fuel Systems Ltd. reported in 2014 (306) ELT 26 (Mad.), wherein it has been held that amount not paid towards excise duty but only by way of deposit during investigation should not be considered as payment of duty; and as such, the provisions of section 11B of the Central Excise Act will have no application for refunding such amount.

8. Reliance placed by the ld. DR for Revenue on the judgement of Honble Supreme Court in the case of Dena Snuff (P) Ltd. vs. CCE, Chandigarh reported in 2003 (157) E.L.T.500 (S.C.), Shakun Overseas Ltd. vs. Commissioner of Customs (Appeals), Chennai reported in 2013 (297) ELT 14 (Mad.) and Commr. of Central Excise, Jaipur-II vs. Evershine Marbles & Exporters P. Ltd. reported in 2009 (240) ELT 239 (Tri. Delhi) are not applicable to the facts and circumstances of the present case, in as much as, the issue involved in those decided cases relates to refund of Central Excise duty; whereas, in the present case, the issue involved is refund of the amount deposited during the course of investigation, which cannot be considered as duty of excise. Hence, the cited judgements are not applicable to the present case.

9. In view of the above settled principles of law, the impugned order dismissing the appeal on the ground of limitation is not sustainable and accordingly, the same is set aside and the appeal is allowed in favour of the appellant with consequential relief, if any, as per law.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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