2001 (2) TMI 571 - AT - Central Excise

Appellate Court Clarifies Refund Claim Timing Under Central Excise Act

The appellate court held that a refund claim could be filed under Section 11B of the Central Excise Act, 1944, before the finalization of provisional ... Refund - Provisional assessment not finalised Issues Involved:1. Whether a refund claim can be filed under Section 11B of the Central Excise Act, 1944, before the finalization of provisional assessment under Rule 9B of the Central Excise Rules, 1944.2. Whether the refund claim filed by the appellant is time-barred.3. Whether the authorities' rejection of the refund claim as premature is valid.4. Whether the orders passed by the authorities below traveled beyond the show cause notice.Issue-wise Detailed Analysis:1. Filing of Refund Claim Before Finalization of Provisional Assessment:The primary issue in this appeal was whether a refund claim could be filed under Section 11B of the Central Excise Act, 1944, before the finalization of provisional assessment under Rule 9B of the Central Excise Rules, 1944. The appellant contended that they were entitled to file a refund claim even before the finalization of provisional assessments for amounts collected under a mistake of law or fact. They argued that Section 11B provides an outer time limit of six months from the 'relevant date' for filing a refund claim, and the claim could be filed anytime before this limit expires. The authorities below, however, rejected the claim as premature, advising the appellant to submit the claim upon finalization of the provisional assessment.2. Time-barred Refund Claim:The appellant initially filed a refund claim on 30-3-1990, which was revised on 29-6-1990. A show cause notice was issued, questioning why the refund claim should not be rejected as time-barred, having been submitted after six months from the date of payment. The appellant argued that since the assessments during the relevant period were provisional, the claim was not hit by the time-bar. The authorities, however, upheld the rejection, stating that the claim was premature and should be submitted after the finalization of the provisional assessment.3. Validity of Rejection as Premature:The Tribunal considered whether the rejection of the refund claim as premature was valid. The authorities below argued that ignoring the final assessment in deciding the refund claim could lead to an absurd situation. They held that a harmonious reading of Rule 9B(5) and Section 11B indicates that a refund claim should arise only after the provisional assessment is finalized and adjustments made. The Tribunal agreed with this reasoning, upholding the order impugned in toto and rejecting the appeal.4. Orders Traveling Beyond Show Cause Notice:A separate judgment by another member of the Tribunal highlighted additional facts, including the amendment of Section 11B during the pendency of the refund claim. The member noted that the refund claim was returned and re-submitted in compliance with revised requirements. The member argued that the unamended Section 11B allowed for filing a refund claim within six months of the relevant date, and there was no clause debarring the filing of a refund claim during the pendency of provisional assessments. The member concluded that the claim could not be rejected as premature and that the orders passed by the authorities below had traveled beyond the show cause notice, necessitating the setting aside of the orders and allowing the appeal with consequential relief.Majority Decision:Due to a difference of opinion among the Tribunal members, the matter was referred to a third member. The third member agreed with the view that the orders passed by the authorities below should be set aside. The third member emphasized that the provisional assessment had not been finalized, and thus, no period of limitation could run against the appellant for denying the refund. The third member concluded that the matter should be remanded back to the jurisdictional adjudicating authority to pass a final order on the refund application, ensuring the matter is resolved expeditiously.Final Order:In view of the majority order, the impugned orders were set aside, and the matter was remanded back to the Assistant Commissioner to examine the amount of refund payable to the appellants. The final order was to be passed within three months from the date of receipt of a copy of the order.