CESTAT quashes Refund of Excise Duty on Henna Powder and Henna Paste as Refund Application not filed within Time Limit under Proviso to Section 11C (2) of Excise Act [Read Order]

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed refund of the excise duty as the refund application was not filed within the time limit prescribed in the proviso to section 11C(2) of the Excise Act, 1944.

The respondent, M/s. Prem Mehandi Center, is engaged in the manufacture of Henna Powder and Henna Paste. It believed that these two products manufactured by it would fall under Chapter 14 of the Central Excise Tariff Act, 1985 attracting nil rate of duty. The department, however, believed that these two products would fall under Chapter 33 of the Excise Tariff Act, attracting excise duty at the rate of 12%. The respondent paid duty of excise for the period from January 2012 to February 2013 under protest.

Subsequently, the Notification was issued under section 11C of the Excise Act directing that the whole of the duty of excise payable under section 3 of the Excise Act on Henna Powder and Henna Paste falling under Chapter 33 of the First Schedule to the Excise Tariff Act would not be levied during period commencing 01.01.2007 to 01.03.2013.

Pursuant to the issuance of the aforesaid Notification, the respondent claimed refund of central excise duty paid on Henna Powder and Henna Paste during the period 01.04.2011 to 31.03.2013 by filing an application on 15.12.2017.

Feeling aggrieved, the respondent filed appeals before the Commissioner (Appeals) and by a common order both the appeals were allowed holding that the respondent was eligible to the refund of the duty of excise paid on Henna Powder and Henna Paste in terms of the Notification. Hence the Revenue is in appeal before the Tribunal.

Rakesh Agarwal, Authorised Representative who appeared for the department made the following submissions that the Addendums to the show cause notices were issued prior to adjudication and were considered by the respondent in its defence and also by the adjudicating authority and that Refund is time barred in terms of the provisions for filing refund under the proviso to section 11C (2) of the Excise Act.

Rupesh Kumar counsel for the respondent assisted by Jitin Singhal, made the following submissions that the time limit of six months to file the refund claim from the date of issuance of the exemption notification would not be applicable, as every refund claim filed under the Excise Act is governed by the time limit provided under section 11 B of the Excise Act.

A Two-Member Bench comprising Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “The refund applications filed by the respondent on 15.12.2017 pursuant to the issuance of the Notification dated 24.04.2017 was, therefore, liable to be rejected for the reason that it was not filed within the period of six months from the date of issue of the Notification as specified in the proviso to sub-section (2) of section 11C of the Excise Act.”

The Bench concluded by noting that the respondent would not be entitled to refund of the excise duty as the refund application was not filed within the time limit prescribed in the proviso to section 11C(2) of the Excise Act.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates