Grant of refund on subsequent application when initial application filed within time limit

PJ/Case Law /2016-17/3436

Case -DCM SHRIRAM CONSOLIDATED LTD. Versus COMMISSIONER OF C. EX. & S.T., JAIPUR-I
Citation- 2017 (345) E.L.T. 132 (Tri. - Del.)

Brief Facts-The brief facts of the case are that the appellant is engaged in the manufacture of Cement, where grinding Media is used as an input. During the disputed period, the appellant had availed Modvat credit of Central Excise duty paid on inputs i.e. Grinding Media, used in manufacture of cement. Taking of Modvat credit by the appellant was disputed by the Department on the ground that grinding media is not an input and the same is a machinery item. Pursuant to the adjudication order dated 11-12-1997, the appellant had reversed the Modvat credit amount. The said adjudication order was appealed against by the appellant and the Tribunal vide order dated 1-10-1993 has allowed the appeal filed by the appellant, holding that grinding media is an input and Modvat credit will be available to the appellant. Pursuant to the favourable order of the Tribunal, the appellant had filed the refund application on 30-6-1994, claiming refund of Modvat credit already reversed in its books of account. However, the said refund application was returned by the Department to the appellant on various grounds. Thereafter, the appellant had filed the refund application again on 19-10-2011, consequent upon favourable order passed by the Joint Commissioner of Central Excise. Filing of this refund application was considered by both the authorities as time-barred. Hence, this present appeal is before the Tribunal.

Appellant’s Contention- None appeared for the appellant

Respondent’s Contention- It is an admitted fact on record that the refund application was initially filed by the appellant on 30-6-1994. However, the same was returned by the Central Excise Department to the appellant on the ground that the order of the Tribunal in allowing the Modvat credit on Grinding Media has not been accepted by the Department and the appeal is pending before the Hon’ble High Court. With regard to the issue, as to whether, Grinding Media should be considered as input for manufacture of cement, the adjudication proceedings initiated by the Department were dropped by the Joint Commissioner vide order dated 13-5-2009. Consequent upon the favourable order, the appellant pursued the matter with the Department for sanction of refund. Since, the request was not considered favourably, the appellant has filed the refund application once again on 19-10-2011. The authorities below took the view that since the order was passed on 13-5-2009 and the refund application was filed on 19-10-2011, the same is barred by limitation of time as provided under Section 11B of the Central Excise Act, 1944.

Reasoning of Judgment–There was no necessity for filing the fresh refund application by the appellant on 19-10-2011 with regard to the same refund amount, which was initially filed on 30-6-1994, which was returned by the Department on the ground that the Tribunal’s order is the subject matter of dispute before the Hon’ble High Court. Perusal of the provisions of Section 11B ibid reveals that no provisions exist therein to return the refund application to the assessee. Since, the ground of filing refund application on 30-6-1994 is same in the application filed on 19-10-2011, in considered view, application filed on 30-6-1994 should be construed as proper application for the purpose of computation of limitation of time.

Decision- Appeal allowed.

Comment–The gist of the case is that whenthe initial application was filed within the statutory time frame under section 11B i.e 30.06.1994, ,then there is no delay in filing the subsequent application i.e. 19.10.2011,which was in continuation to the earlier application involving the same set of facts. Hence refund should be given, thus appeal is allowed.

Prepared by- Alakh Bhandari

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PJ/Case Law /2016-17/3436

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