2017 (3) TMI 172 - AT - Central Excise

Taxpayer wins refund claim on limitation grounds, stresses record-keeping and appeal consistency.

The judgment favored the assessee by upholding the dropping of the demand on limitation and granting the refund claim. The decision highlighted the ... Refund claim - time bar - denial on the ground that activity of repacking, relabeling is amount to manufacture which was not disclosed to the department - Held that: - appellant was maintaining RG 23 D register and issuing invoices in respect of repacking and relabeling of goods and same was being submitted to the department. The Ld. Commissioner(Appeals) taking into consideration this undisputed facts held that there is no suppression of facts on the part of the assessee - the demand of extended period was dropped - order reversing the sanction of refund claim was illegal - appeal allowed - decided in favor of assessee. Issues:Appeal against dropping demand on limitation and refund claim rejection.Analysis:The appeal was filed against the dropping of demand on limitation by the Commissioner(Appeals) and the subsequent rejection of the refund claim. The Revenue contended that the assessee undertook repacking and relabeling work without disclosing it to the department, which amounted to manufacturing activity. The Revenue argued that the demand should not have been dropped on the basis of time bar, and therefore, the refund claim should also be rejected.The assessee, on the other hand, argued that their activities were known to the department as they regularly maintained records and submitted relevant documents. The Commissioner(Appeals) had dropped the demand on the basis that there was no suppression of facts by the assessee. The Commissioner held that the appellant maintained proper records and invoices related to repacking and relabeling, which were submitted to the department. Therefore, the demand for an extended period was considered time-barred. The Commissioner(Appeals) also noted that the Revenue's appeal against dropping the demand was not valid since the order for dropping the demand was already in effect. Consequently, the Commissioner(Appeals) reversed the refund claim, which was deemed illegal. The judgment maintained that the dropping of the demand by the Commissioner(Appeals) was correct, and the appellant was entitled to the refund. The order dismissed the Revenue's appeal and allowed the assessee's appeal.In conclusion, the judgment favored the assessee by upholding the dropping of the demand on limitation and granting the refund claim. The decision highlighted the importance of maintaining proper records and submitting them to the department to avoid allegations of suppression of facts. The judgment also emphasized the need for consistency in appeal decisions and the legality of refund sanctions.