The limitation clause does not apply in case of refund of unutilized credit

PJ/Case Laws/2010-11/1181

Case: CCE, Hyderabad versus Hyundai Motors India Engineering

Citation: 2011 (21) S.T.R. 667 (Tri. – Bang.)

Issue: - The limitation clause does not apply in case of refund of unutilized credit

Brief Facts: - Respondent-assessee had claimed refund of cenvat credit - The Original Authority had allowed part of the refund of unutilized Cenvat credit and part of the refund was o disallowed on the ground of being time barred. In appeal, the Commissioner (Appeal) had allowed the refund and modified the impugned order allowed the claim for refund of entire amount following the procedure prescribed in Notification No. 5/2006–C.E. (NT) in terms of Rule 5 of CCR, 2004. Hence, Revenue is in appeal before the Tribunal.

Appellant’s Contention: - Revenue seeks stay of this order and restore the order of the original authority on the ground that the claim for refund of balance amount rejected by the original authority as barred by limitation, was in accordance with law.

Reasoning of the Judgment: - The Tribunal found that the impugned order is consistence with the Tribunal’s decision in the case of Global Energy Food Industries versus CCE, Ahmedabad [2010 (262) ELT 627 (Tri – Ahmd)]. In this case, the Tribunal followed the judgement of M.P High Court in a similar case where in it was held that law of limitation under section 11B of Central Excise Act, did not apply to refund of Cenvat Credit accumulated owing to export of finished goods. In the circumstances tribunal don not find any merit in the revenues application for staying the operation of the impugned order.

Decision: - Application is rejected.
Comment:- this is very important case. We have also dealt the similar case in Rangdhara polymers. Although the notification 5/2006 issued under Rule 5 says that Section 11B will be applicable but section 11B does not provide for mechanism to compute time of limitation. It has to be computed from the date of taking credit or from date of clearance of goods from factory or from the date of export or from the date when credit remained unutilized or from the last date of quarter when the refund was to be filed. Thus, nothing is provided for the same in Section 11B and hence the same cannot be applied for refund of unutlised credit.

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PJ/Case Laws/2010-11/1181

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