The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the statutory limitation period prescribed under Section 11B of the Central Excise Act, 1944 is not applicable to refund when amount paid appellant is not tax.
The appellant filed application for refund of Rs.30 Lakhs deposited during investigation, which upon verification, was allowed vide Order sanctioning refund of Rs.30 Lakhs by holding that the amount was deposited under-protest and in terms of second proviso to Section 11B (1) of the Central Excise Act, 1944, the limitation of one year shall not apply.
Aggrieved with the said Order, the Revenue preferred appeal before the Commissioner ( Appeals ) and by the impugned order, the Commissioner ( Appeals ) allowed the appeal filed by the revenue and set-aside the order by holding that the bar of limitation under Section 11B (1) is applicable and since the refund claim was filed after period of one year from the date of the order passed by this tribunal, the claim is barred by limitation.
The Counsel for the Appellant submitted that since the payment of Rs.30 lakhs was made under-protest, the same does not bear the character of duty and therefore Section 11B (1) of the Central Excise Act, which is applicable only for refund of duty of Excise and interest, has no applicability. It was also submitted that assuming without conceding that the amount of Rs.30 lakhs bear the character of duty, then also the bar of limitation of one year shall not be applicable, in terms of the second proviso to Section 11B (1).
A Single Bench of PK Choudhary, Judicial Member observed that “In the present case, when admittedly the Appellant is not required to pay any amount, then the Appellant was clearly entitled to refund of the amount deposited under-protest and consequently the revenue has no authority to retain such amount as it would be in violation of Article 265 of the Constitution.”
“In view of the aforesaid analysis, it is concluded that the statutory limitation period prescribed under Section 11B is not applicable to the refund claimed by the Appellant since the amount paid by the Appellant is not a tax. In view of the above discussions, the present appeal is allowed. The Appellant shall be entitled to the refund amount along with interest” the Tribunal concluded.
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