2024 (8) TMI 201 - AT - Central Excise

Tribunal Overturns Order, Grants Refund Claim Due to Unchallenged Sanction and Expired Limitation Period.

M/s Pace Non Woven Fabric Products Versus Commissioner of CE & CGST, Jammu

M/s Pace Non Woven Fabric Products Versus Commissioner of CE & CGST, Jammu - TMI Issues:1. Appeal against rejection of refund due to alleged excess tax payment.2. Applicability of judicial precedents and legal provisions.3. Challenge to refund sanction order and limitation period.Analysis:1. The appeal was filed against the rejection of a refund claim by the Commissioner (Appeals) based on an alleged excess tax payment by the appellant. The appellant contended that the excess tax was due to sales returns and had corrected the balance sheet accordingly. The extended period of limitation was invoked to recover the refund already sanctioned. The appellant argued that the self-credit claimed was based on the actual amount paid by them, and legal precedents supported their position, citing the case of M/s Medley Pharmaceutical Ltd vs. CCE & ST Chandigarh-I. The Tribunal found that the issue was settled by the majority view in the mentioned case, emphasizing that the refund cannot be rejected even if a higher duty was paid than what was payable.2. The appellant further argued that the department had not challenged the refund sanction order, and therefore, the refund could not be rejected. Citing the case of CCE, Shillong vs. Jellalpur Tea Estate, the appellant highlighted the importance of following the prescribed legal procedures. Additionally, the appellant referred to the case of M/s Ravi Crop Science vs. CCE, Jammu, which stated that if the refund sanction order was not challenged, it could not be recovered through a show cause notice. The Tribunal agreed with these arguments, emphasizing the significance of challenging refund sanction orders and following statutory remedies.3. The Tribunal also considered the issue of limitation, noting that the entire demand was barred by limitation as the department failed to establish the grounds for invoking the extended period as per Section 11A sub-section (4) of the Central Excise Act, 1944. By analyzing the submissions and legal precedents, the Tribunal concluded that the impugned order was not sustainable in law. Therefore, the Tribunal set aside the order, allowing the appeal of the appellant with any consequential relief as per the law. The judgment highlighted the importance of adherence to legal procedures, precedent, and statutory limitations in matters concerning tax refunds and recovery.