In a major relief to Ray-Ban India, the Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi bench has directed the central excise department to allow refund of excise duty paid by the company under protest in the year 2018.
The appellant-Company is engaged in manufacturing sunglasses and spectacle frames around the globe. In the year 2004, the Central Excise department has alleged that the appellant violated Rules 3,4 and 7 of the Cenvat Credit Rules and accordingly, demanded Rs. 16,89,669 along with interest and equal penalty. However, the final order passed in relation to the same was finally deleted by the Tribunal in the year 2017due to the monetary limit being less than Rs.15 lakh. Thereafter, a refund claim was filed by the appellant on 19.02.2018 about the sum of Rs.16,89,669/- as was deposited by the appellant under protest during the period of proceedings.
While considering the appeal, Judicial Member Rachna Gupta held that since the appellant has challenged the amount which got deposited by him during the investigation, the protest is very much lodged on his part not as a party to such decision, the plea of limitation should not debar his claim.
“However, coming to mote controversy herein, since one year of limitation of refund, from the relevant date, definition thereof becomes important,” the Tribunal said.
Citing the provisions of section 11B of the Central Excise Act, the Tribunal allowed the plea of the appellant and held that “the aforesaid provision makes it abundantly clear that it is the date of judgement as consequence whereof the amount became refundable. No doubt, the CESTAT’s Final order is of 31.3.2012, vide which the amount/duty paid by the appellant was made refundable but the Department opted for continuation of the said litigation by filing an appeal before the High Court. Once that option got exercised, the final judgement about the entitlement of the appellant to have the refund of said amount/duty paid, is the judgement announced by High Court in the said appeal. Since the said appeal of the Department was dismissed by Hon’ble High Court on 21.04.2017 irrespective of technical ground, the fact remains that entitlement of the appellant to refund of duty paid got finalised only on 21.04.2017 hence the relevant date under section 11B(ec) is none but 21.04.2017. The refund claim is filed on 19.02.2018 which, therefore, is very much within one year thereof, hence, wrongly been held to be barred by time.”
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