Refund Claim of utilized CENVAT Credit returned for rectifying the deficiencies cannot be held as time-barred: CESTAT [Read Order]

The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the Refund Claim of utilized CENVAT Credit returned for rectifying the deficiencies cannot be held as time-barred.

On behalf of the appellant, Counsel Shri S. Venkatachalam appeared and MsAnandalakshmi Ganesh Ram appearedfor the department. 

M/s.Ramesh Flowers Pvt. Ltd.,the appellant is engaged in exporting dry flowers and bouquets. They filed refund claims for the unutilized accumulated cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.27/2012-CE (NT) dated 18.06.2012.  The refund claims were filed for the respective quarters for an amount of Rs.6,11,540/-, Rs.3,66,312/-, Rs.6,70,721/- and Rs.5,11,398/- being the cenvat credit of inputs and service tax paid by the appellant on input services for the quarters.

The first three refund claims were returned to the appellant by the authorities stating that the documents furnished are insufficient and that the claims required corrections.  The appellants resubmitted the refund claims after making good the omissions and also furnished the necessary documents.

The refund sanctioning authority rejected all the refund claims as time-barred stating that the refund claims have been filed beyond the period of one year as envisaged under Section 11B of the Central Excise Act, 1944.

It was contended that as per CBEC Manual, a deficiency memo should be issued within 15 days of receipt of the refund claim and the same has not been followed and the claim has been rejected as time-barred.

The respondent adverted to Notification No.27/2012-CE (NT) dated 18.06.2012 and submitted that clause (b) of para-3 of the said notification states that the claim has to be filed before the expiry of the period specified in Section 11B of the Central Excise Act, 1944.  The appellant had initially filed the refund claims without supporting documents. The same was returned to the appellants.  The refund claims were not complete in all respects and the claims were thereafter filed beyond the period of one year.  

Ms Sulekha Beevi C.S., Member (Judicial) of the CESTAT bench observed that the procedure to file a refund claim for a quarter is only to make the filing and processing easier. The last month which is included in the quarter would have to be reckoned for computing the period of one year. When the notification allows the assessee to file refund claims for a quarter, such right of refund cannot be snatched away by computing one year from the first month of the said quarter.

The CESTAT bench set aside the impugned order which rejects the refund claims as time-barred and the matter is remanded to the original authority to process the refund claims after allowing the appellant for a personal hearing as well as to furnish the requisite documents.  The appeals are partly allowed. 

To Read the full text of the Order CLICK HERE

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