The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) allowed the refund claim of excise duty Since the central excise duty debited against the amount received as state vat subsidy under protest.
M/s Pine Laminates Pvt. Limited, the appellant challenged the Order-in Appeal rejecting the refund application filed by the appellant as being time-barred since the duty was not paid under protest. The appellant is engaged in the manufacture of Decorative Laminate/ Sheet falling under Chapter Heading No. 4823 9019 of the First Schedule to the Central Excise Tariff Act, 1985, and had filed a refund claim for Rs.12,60,492/- on 09.01.2019 under section 11B of the Central Excise Act, 1944.
The department issued a show cause notice dated 13.02.2019 as the refund claim appeared to be hit by the time limit prescribed under section 11B of the Central Excise Act, 1944, and was therefore liable to be rejected. As per the audit report the audit had pointed out the issue and agreed with the view of the audit, the assessee voluntarily reversed duty of Rs. 6,49,017/- along with interest of Rs. 1,38,627/- and penalty of Rs. 88,947/- vide challan dated 16.04.2015
The duty on VAT subsidy was last deposited on 30.11.2016 by them, during this long period i.e., from March 2013 to November 2016 or thereafter, if they had any kind of doubt or protest, they were required to submit a letter of protest or to file refund claim of duty/penalty deposited within the statutory period of one year provided under Section 11B of the Central Excise Act, 1944 but they never exercised any option available to them under the provision of law at any point of time.
Both the adjudicating authority and the Commissioner of (Appeals), confirmed the show cause notice, holding that the case do not fall under the category of payment “under protest”.
The appellant was eligible for subsidy as per the Rajasthan Investment Promotion Scheme whereunder they were required to deposit VAT/CST/SGST at the applicable rate with the government and in terms of the scheme, they were entitled to disbursement of subsidy which is sanctioned in Form 37B and the Challans in the Form VAT, 37B can be utilized for discharge of the VAT liability of the appellant for the subsequent period.
It was evident that the authorities below have wrongly rejected the RG-23 register on the ground that it is a printout of an Excel sheet in which the backdating is possible and the Excise Returns given manually are not acceptable as after 2011 there was no provision to file ER-I manually since e-filing of Central Excise Returns was made mandatory for all assesses.
A single-member bench comprising Ms. Binu Tamta, (Judicial) observed that the Central Excise duty debited against the amount received as State VAT subsidy under protest and the same cannot be ignored. Further held that the appellant is entitled to the benefit of the proviso to section 11B of the Central Excise Act, 1944, which specifically says that period of limitation of one year shall not apply where duty and interest are paid under protest.
“I completely disagree with the findings in the order that the duty on VAT subsidy was last deposited on 30.11.2016 during the long period from March 2010 to November 2016 or thereafter, and if they had any kind of doubt about the audit they were required to submit a letter of protest or to file refund claim of duty/interest/penalty deposited within the statutory period of one year provided under section 11B of the Central Excise Act, 1944, but they never exercised any option available to them under the provisions of law at any point of time and therefore the instant refund claim filed by them was well beyond the statutory period provided under section 11B of the Central Excise Act, 1944. “, the Tribunal held.
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