2024 (9) TMI 921 - HC - Central Excise

Refund application filed within limitation period when proper authority gained jurisdiction to grant refund

HC held that refund application filed within limitation period. Following SC precedent in Sunrays Engineers case, court determined limitation period ... CENVAT Credit - Refund claim with interest - applicability of time limitation - case of the appellant is that effectively no Central Excise Duty had been claimed from M/s ONGC and Oil India Limited, and in this backdrop, the cenvat credit could not be availed by the purchaser - HELD THAT:- The Hon’ble Supreme Court in the case of M/S. SUNRAYS ENGINEERS PVT. LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2015 (4) TMI 122 - SUPREME COURT] had examined the case of limitation under Section 11B of the Central Excise Act, 1944. The Hon’ble Supreme Court was examining a Notification dated 31.10.2000, where the rate of excise duty has been reduced with retrospective effect i.e. w.e.f 01.07.1999. The refund application was made on 19.06.2001. Keeping in view the Notification dated 31.10.2000, the Hon’ble Supreme Court held that the trigger point which entitled the authority to refund was 31.10.2000, and the limitation has to be reckoned from the date the Notification has been issued. In the absence of such notification, there was no cause of action in favour of the assessee. Hence, the application moved for refund on 19.06.2001, was within time, and there was no logic in reckoning the limitation from July, 1999, under section 11B of the Central Excise Act, 1944. The ratio of the judgments are applicable in the facts of the present case, in the present case, after the Notification dated 18.04.2013, the DGFT, had no powers to grant the refund and the time taken before that authority could not be made basis to reject the application for refund on the ground of expiry of the limitation. The application in the present case was made on 03.10.2013, and after the Notification dated 18.04.2013, the period of one year would start from the date 18.04.2013, to approach the correct forum for grant of refund i.e. Deputy Commissioner. The period of one year would expire on 18.04.2014, and the appellant had approached the DGFT, Dehradun on 03.10.2013, which was before the expiry of limitation i.e. 18.04.2014. The order passed by the CESTAT, New Delhi is being set aside - Appeal allowed. Issues Involved:1. Quashing of the impugned order dated 01.07.2016.2. Refund of Rs. 21,09,929/- with appropriate interest under section 11BB of the Central Excise Act, 1944.3. Applicability of the limitation period under section 11B of the Central Excise Act, 1944.4. Validity of project authorization certificates for claiming the refund.Detailed Analysis:1. Quashing of the Impugned Order Dated 01.07.2016:The appellant, M/s Sara Sae Pvt. Ltd., sought to quash the impugned order dated 01.07.2016, passed in Central Excise Appeals by the CESTAT, New Delhi. The appeal was based on the grounds that the order was erroneous in rejecting the refund claims on the basis of the limitation period under section 11B of the Central Excise Act, 1944.2. Refund of Rs. 21,09,929/- with Appropriate Interest:The appellant claimed a refund of Rs. 21,09,929/- with interest under section 11BB of the Central Excise Act, 1944. The appellant initially filed refund claims with the DGFT and later with the Deputy Commissioner of Central Excise, Dehradun, following the DGFT's direction. The refund claims were partly allowed and partly rejected on the grounds of being time-barred under section 11B.3. Applicability of the Limitation Period Under Section 11B:The core issue was whether the time taken before the DGFT, where the appellant initially filed the refund claims, could be excluded from the limitation period prescribed under section 11B. The court referred to the Supreme Court judgment in 'M.P. Steel Corporation Vs. Commissioner of Central Excise,' which held that the Limitation Act, 1963, applies to tribunals and quasi-judicial authorities. The time spent before the wrong forum (DGFT) should be adjusted when the appellant approaches the correct forum (Deputy Commissioner of Central Excise).The court also referred to 'Sunrays Engineers Pvt. Ltd. Vs. Commissioner of C. Ex., Jaipur,' where the Supreme Court held that the limitation period should be reckoned from the date of the notification that triggered the right to claim a refund. In this case, the relevant notification was dated 18.04.2013, which took away the DGFT's power to grant refunds.4. Validity of Project Authorization Certificates:The appellant's project authorization certificates issued by M/s ONGC and M/s Oil India Limited were deemed valid for claiming the refund of terminal excise duty. The court noted that the appellant had complied with the procedural requirements and filed the refund claims within the prescribed time limit after the DGFT's notification dated 18.04.2013.Conclusion:The court allowed the appeals, setting aside the impugned order dated 01.07.2016. It directed the respondents to release the refund amount of Rs. 21,09,929/- with appropriate interest under section 11BB of the Central Excise Act, 1944, within six weeks. The court held that the limitation period should be calculated from the date of the notification (18.04.2013), and the appellant's claims were filed within the prescribed time limit.