2006 (12) TMI 30 - AT - Central Excise

Dispute Over Refund Claim Timing: Letter Date vs. Payment Date

The case involved a dispute over the timing of a refund claim for differential duty rates on sugar clearance. The appellants' intention expressed in a ... Refund – Revenue alleged that the refund claim was barred by time on the date of clearance from the godown is not relevant and accordingly refund was rejected – After considering all the fact authority rejected the revenue allegation Issues:1. Refund claim timing and relevance of date of clearance.2. Interpretation of statutory provisions under Section 11B for refund claims.3. Application of Tribunal judgments in similar cases to the present scenario.Issue 1: Refund claim timing and relevance of date of clearanceThe case involved a dispute regarding the timing of a refund claim for differential duty rates on sugar clearance. The appellants had shifted sugar to godowns due to space constraints, paying duty for free sale sugar initially and later intending to clear levy sugar. The Revenue contended that the refund claim was time-barred based on the date of payment of duty from the factory, not the date of clearance from the godown. The Commissioner (Appeals) allowed the refund claim, emphasizing the intention expressed in a letter dated 22-6-2001 for levy sugar clearance from the godown, following Tribunal judgments supporting the view that the letter served as the refund application, not the date of payment from the factory.Issue 2: Interpretation of statutory provisions under Section 11B for refund claimsThe Commissioner (Appeals) analyzed the statutory provisions under Section 11B regarding refund claims of excise duty. The relevant date for claiming a refund is crucial, as per the statute. The Commissioner examined the applicability of Explanation (d) and (f) to Section 18 of the Central Excise Act, 1944 in the context of the case. It was found that Explanation (d) did not apply to the case, as it pertains to specific scenarios not relevant to the sugar classification. The communication dated 22-6-2001 was deemed critical as it indicated the intention to clear levy sugar from the godown, aligning with Tribunal rulings treating such communications as refund applications.Issue 3: Application of Tribunal judgments in similar cases to the present scenarioThe Commissioner (Appeals) referenced Tribunal judgments, including U.P. State Sugar Corporation Ltd. case and Wood Working Centre case, to support the decision in favor of the assessee. These judgments established precedents where communications expressing intent for refund claims were considered as valid refund applications, even preceding formal claims. The Commissioner applied the ratio of these Tribunal rulings to the present case, concluding that the communication dated 22-6-2001 served as the original claim, and the subsequent formal claim should not be rejected on the grounds of limitation. The impugned order was set aside, and the appeal was allowed based on the legal sustainability of the Commissioner's decision.