2004 (9) TMI 227 - AT - Central Excise

Tribunal rules in favor of appellants in Modvat credit case, rejecting time bar on refund claim.

MAIHAR CEMENT Versus COMMISSIONER OF CENTRAL EXCISE, BHOPAL

The Tribunal ruled in favor of the appellants in a case involving Modvat credit denial and refund claim rejection based on a time bar. The Tribunal held ... Refund - Limitation - Protest Issues involved: Modvat credit denial, refund claim rejection based on time bar.Modvat credit denial: The appellants had taken Modvat credit on certain capital inputs or capital goods, which was contested by the Department through a show cause notice. The appellants debited the disputed amount and contested the notice. The show cause notice was ultimately decided in their favor by the Commissioner. The appellants then filed a refund claim, which was denied by lower authorities citing it as time-barred under Section 11B. The appellant argued that since they paid the amount post the show cause notice and contested it successfully, Section 11B should not apply, as the payment was under protest. They cited relevant case laws to support their argument, emphasizing that the time limit under Section 11B should not apply when the issue is being contested.Refund claim rejection based on time bar: The Tribunal noted that the duty was paid by the appellants following the show cause notice issued by the department. As the show cause notice was decided in favor of the appellants by the Commissioner, they filed a refund claim. The Tribunal held that since the appellants were actively contesting the show cause notice, the time limit under Section 11B should not apply until the Commissioner's decision. Therefore, the deposit of the amount was deemed to be under protest. Consequently, the Tribunal set aside the lower authorities' order rejecting the refund claim on the grounds of being time-barred and allowed the appeal in favor of the appellants.