Voluntary Compliance Encouragement Scheme refund barred where payment was made under a declaration and no refund lies under the scheme.

A refund claim under Section 11B of the Central Excise Act was rejected because the payment had been made under the Voluntary Compliance Encouragement Scheme, 2013. The Scheme is a special code conferring benefits on voluntary compliance, and Section 109 expressly states that any amount paid pursuant to a declaration under Section 107(1) is not refundable under any circumstances. As a result, the general refund provisions did not apply, and the claimant, having chosen the Scheme, remained bound by its terms. The rejection of the refund claim was therefore upheld.

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Issues: Whether the authorities were correct in rejecting the refund claim made under Section 11B of the Central Excise Act, 1944 in view of the amount having been paid under the Voluntary Compliance Encouragement Scheme, 2013.

Analysis: The claim was held not to be a simple refund claim under the general refund provision. The amount had been paid pursuant to a declaration under the Voluntary Compliance Encouragement Scheme, 2013, which is a special scheme conferring benefits on voluntary compliance. Section 109 of the Scheme expressly provides that any amount paid in pursuance of a declaration under Section 107(1) shall not be refundable under any circumstances. On that basis, the Scheme excluded the applicability of the general refund provisions and the appellant, having opted for the Scheme, was bound by its terms.

Conclusion: The rejection of the refund claim was upheld and the issue was decided against the assessee.

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