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PJ/Case Laws/2012-13/1502

Whether time limit of refund claim should be one year from the date of taking credit or from the date of decision of dispute.

Case:- India Trimmings Pvt. Ltd. Vs. C.C.E. Coimbatore

Citation:- 2013 (29) S.T.R. 383 (Tri. - Chennai)
 
Brief facts:- The appellants are 100% EOU. They have availed credit on inputs and input services. After manufacturing the goods, they exported the goods.Initially, the SCNs were issued to the appellants for re­versal of the Cenvat credit availed both on inputs and input services as they were not eligible for the same. The said dispute was settled by the Commissioner (Appeals) in favour of the appellants. Thereafter, the appel­lants filed refund claims respectively for the relevant period. The refund claims were denied as time-barred as per Clause (6) of Notification No. 5/2006 under Rule 5 of Cenvat Credit Rules, 2004. Against the said orders, the appellant filed appeal before Tribunal.
 
Appellant’s Contention:-The appellants submits that as there was a dispute of eligibility of Cenvat credit availed by them, therefore unless and until the dispute is settled, they are not entitled for refund claims and when the dis­pute was settled in their favour, within one year of the said order, they have filed the refund claims. Therefore, they are entitled for refund claims as per Notification No. 5/2006. To support his contention, the appellant further placed reliance on the decision of this Tribunal in the case of CCE, Indore v. Indorama Exports - 2010 (254) E.L.T. 147 (Tri.-Del.) and Dena Snuff Pvt. Ltd. v. Commissioner - 2003 (157) E.L.T. 500 (S.C.).
 
Respondent’s Contention:- The respondent opposed the contention of the appellant and submitted that notification is to be construed strictly and as per clause (6) of the Notification No. 5/2006, the appellants are required to file refund claim within one year as stated in Section 11B of the Central Excise Act, 1944 for availment of the credit. Admittedly, they have not filed refund claims within time. Therefore, they are not entitled for refund claims. To support his contention, he relied on the decision of CCE, Hyderabad v. Sunder Steels Ltd. - 2005 (181) E.L.T. 154 (S.C.) and Utttam Industries v. CCE, Haryana - 2011-TIOL-23- SC-CX = 2011 (265) E.L.T. 14 (S.C.).

Reasoning of Judgment: -The Tribunal heard both sides and considered their submissions. In this case, these facts are not in dispute that initially Cenvat credit availed by the appellant was denied and the same was settled in their favour and within one year, they have availed refund claims. As per Notification No. 5/2006, the assessees are required to file a refund claim within the time prescribed under Section 11B of the Central Excise Act. As per Section 11B of the Act, the assessees are required to file a refund claim within one year from the relevant date and the limitation of one year shall not apply where duty has been paid under protest. From the facts of the case, it is clear that whether the appellants are entitled for refund or not was in dispute. Therefore, it cannot be said that the Cenvat credit availed by them is the date of availment of credit. That dispute was settled only on the date of Order-in-Appeal.  Therefore, the facts of the case of Indoranui Exports (supra) are squarely applicable to the facts of this case wherein this Tribunal had held that limitation shall begin when lis ends. Therefore, as per Notification No. 5/2006, the appellants are entitled for refund from the relevant date i.e. settlement of the dispute between the parties. Therefore, the appellants have filed refund claims within the time prescribed as per Notification No. 5/2006. In view of these ob­servations,

Decision:-The appeals are allowed with consequential relief.
 
Comment:-  When the dispute is settled then the assessee is eligible for credit and hence the refund. Hence the tribunal has rightly held that the time limit is to be computed from the date of settle of dispute.
 

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