2003 (8) TMI 116 - AT - Central Excise

Tribunal allows refund claim, rejects time-bar argument under Central Excise Act

The Tribunal ruled in favor of M/s. Prempreet Textile Industries Ltd., holding that their claim for refund of the deposited amount was not barred by ... Refund - Limitation Issues:1. Whether the claim for refund of amount deposited by M/s. Prempreet Textile Industries Ltd. is barred by limitation.Analysis:The issue in this Appeal was whether the claim for refund of amount deposited by M/s. Prempreet Textile Industries Ltd. is barred by limitation. The Appellants manufactured draw twisted yarn and twisted yarn. Central Excise Officers alleged that they sold draw twist yarn in guise of twisted yarn without paying Central Excise duty. The Appellants handed over six post-dated cheques totaling Rs. 20 lakhs under protest to the Superintendent, Central Excise. The amount was realized and credited to the Central Government's account. A show cause notice was issued, but no reference to the deposit was made. The Appellants filed a refund claim, which was initially rejected by the Deputy Commissioner and Commissioner (Appeals) on grounds of prematurity and being time-barred. However, the Tribunal set aside the demand for duty and penalties, treating the deposit as a pre-deposit. The Appellate Tribunal found that the refund claim was not barred by the time limit specified in Section 11B of the Central Excise Act.The Appellants contended that the deposit of Rs. 20 lakhs was treated as a pre-deposit by the Tribunal, making them eligible for a refund. They argued that the refund claim was not time-barred as the payment was made under protest. They also cited relevant case law to support their position. The Departmental Representative reiterated the findings of the Commissioner (Appeals).The Tribunal considered the submissions and noted that the amount deposited by the Appellants was treated as a pre-deposit for entertaining the Appeal under Section 35F of the Central Excise Act. The Tribunal had previously held in similar cases that such deposits could be considered pre-deposits. The confirmation of duty demand and penalties was set aside by the Tribunal, making the Department liable to refund the deposited amount. The Tribunal rejected the Commissioner (Appeals)' finding that the refund claim was time-barred under Section 11B. The Tribunal highlighted that the payment was made under protest, no show cause notice was issued before the refund claim, and Rule 233(b) of the Central Excise Rules was not applicable post-clearance. Therefore, the Tribunal allowed the Appeal filed by the Appellants, setting aside the impugned Order.In conclusion, the Tribunal ruled in favor of M/s. Prempreet Textile Industries Ltd., holding that their claim for refund of the deposited amount was not barred by limitation and ordering the Department to refund the amount treated as a pre-deposit by the Tribunal.