TaxTMI 
TaxTMI 
2026 (4) TMI 861
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....of DGCEI conducted searches and alleged suppression of production and clandestine removal of excisable goods, resulting in issuance of a show cause notice dated 10.12.2008 proposing demand of duty. During the course of investigation, even prior to issuance of the show cause notice, the appellant paid amounts of Rs.5,00,000/- on 01.10.2007 and Rs.3,00,000/- on 05.12. 2007.Subsequently, adjudication culminated in confirmation of demand along with interest and penalty vide Order-in-Original dated 15.02.2011. The appellant discharged the amounts as determined therein. On appeal, the Commissioner (Appeals), vide Order-in-Appeal dated 25.01.2012, substantially reduced the duty demand to Rs.38,870/- with corresponding modification of penalty, thereby resulting in excess payment by the appellant. 1.3 The Department preferred an appeal before this Tribunal against the said Order-in-Appeal; however, the same was subsequently withdrawn and dismissed vide Final Order dated 18.08.2016. Consequent upon the reduction of demand and attainment of finality of proceedings, the appellant filed a refund claim on 26.10.2016 for Rs.12,80,456/- (subsequently restricted to Rs.12,63,056/-). The refund cl....
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....esentative reiterated the findings of the lower authorities and further submitted that: - i. the refund claim has been filed beyond the period of one year from the relevant date as prescribed under Section 11B. ii. the relevant date in the present case is the date of Order-in-Appeal dated 25.01.2012 and since the refund claim has been filed only on 26.10.2016, the same is clearly time-barred. iii. Reliance was placed on the decision in Rachna Art Prints Pvt Ltd vs CCE, 2022 (1) Centax 320 (Tri.Ahmd), wherein it has been held that once an amount is appropriated towards confirmed demand, it takes the character of duty and limitation under Section 11B applies. iv. Further reliance was placed on Citizen Metalloys Ltd vs CCE, 2022 (379) ELT 361 (Tri.-Ahmd), wherein it has been held that refund claims filed beyond one year from the date of final order are time-barred. 6. We have carefully heard the submissions advanced by both sides, examined the appeal records in detail, and considered the statutory provisions and the case laws cited. 7. Upon consideration the following questions arise. i. Whether the amounts paid by the appellant durin....
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....governed by the provisions of Section 11B. The ratio of these decisions is that upon crystallization of liability, the nature of payment changes from deposit to duty. 9.6 In the present case, therefore, while the amounts paid during investigation may initially have been in the nature of deposits, the same stood appropriated upon adjudication and assumed the character of duty. The subsequent modification of demand at the appellate stage does not alter the character of such payments as duty, but only gives rise to a claim for refund of the excess amount in accordance with Section 11B of the Act. 9.7 Accordingly, we hold that the amounts paid by the appellant, upon appropriation in the Order-in-Original, are to be treated as duty and not as deposits. ISSUE (ii): Whether the refund claim is barred by limitation under Section 11B and consequently whether the appellant is entitled to refund 10.1 First, we have to observe that it is not disputed that the appellant though has not filed any formal refund application as the record reveals, not even a letter was sent to the Refund Sanctioning Authority after passing of the Commissioner (Appeals) order dated 25.01.2012 in his favor....
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....ar and enforceable right to claim refund. The appellant was not precluded from filing the refund claim at that stage. Therefore, the ratio of the said decision is not applicable. 10.8 The reliance placed on the judgment of the Hon'ble Supreme Court in West Coast Paper Mills Ltd. vs CCE, 2004 (164) E.L.T. 375 (S.C.), is also misplaced. In the said case, the right to claim refund arose only upon final adjudication of the dispute and the assessee could not have claimed refund at an earlier stage. In the present case, however, the right to refund had already accrued upon passing of the Order-in-Appeal. Therefore, the principle laid down in the said judgment cannot be extended to defer the limitation prescribed under Section 11B. 10.9 The appellant has further contended that since the Department had preferred an appeal before this Tribunal and the appellant had filed cross-objections, which were also taken note of in the final order of this Tribunal while dismissing the Department's appeal, the said order of the Tribunal should be treated as the relevant order for the purpose of Section 11B. However, this contention cannot be accepted. The Order-in-Appeal dated 25.01.2012 had alre....