COMMISSIONER OF CENTRAL EXCISE Vs. ITEL INDUSTRIES

JUDGEMENT

(1.) THIS application filed by the Department (Appellant) seeks stay of operation of the impugned order. After perusing the records and hearing both sides, we are of the view that the appeal itself can be finally disposed of at this stage, having heard both sides at length on the substantive issue and ancillary issues. Accordingly, after rejecting the stay application, we proceed to deal with the appeal. On the strength of Final Order No. 1287/2009, dated 23 -10 -2009 passed by this Bench in Appeal No. E/896/2006 (ITEL Industries Ltd. v. CCE, Calicut) [ : 2010 (251) E.L.T. 429 (T)] the respondent claimed refund of duty of Rs. 7,40,651/ - which had been paid under protest during the period from April, 1998 to March, 2000. The Final Order ibid, which was received by the party on 10 -11 -2009 had set aside the demand of duty to the above extent in respect of "MTRs" for a period up to March, 1998. The respondent purported to enjoy the benefit of this decision by filing the subject refund claim. In a show cause notice dated 26 -11 -2010, the Assistant Commissioner concerned proposed to reject the refund claim, firstly on the ground that the claim was premature and, secondly, on the ground that the claim was time -barred. However, in an "ADDENDUM" to the show cause notice, issued on 14 -1 -2011, the Assistant Commissioner shifted focus from the first ground to the second by stating that the protest registered by the respondent at the time of payment of duty stood vacated with the passing of Final Order No. 1287/2009 ibid by this Appellate Tribunal and that the refund claim filed on 28 -10 -2010 was time -barred with reference to the date of the Final Order. In reply to the show cause notice and the 'ADDENDUM' thereto, the respondent contended that their refund claim was not time -barred with reference to the date of receipt of the Final Order (10 -11 -2009) which, according to them, was the "relevant date" as defined under Section 11B of the Central Excise Act. The original authority rejected this contention and reckoned the date of the Final Order as the relevant date and, on that basis, held the refund claim to be time -barred. The adjudicating authority relied, inter alia, on the Apex Court's judgment in Dena Snuff (P) Ltd. v. CCE, Chandigarh [ : 2003 (157) E.L.T. 500 (S.C.)] wherein the Hon'ble Supreme Court held as under:

(2.) AGGRIEVED by the order of rejection of refund claim, the party preferred an appeal to the Commissioner (Appeals). The appellate authority took the view that the lower authority had incorrectly interpreted the judgment of the Supreme Court and further held to the effect that the date of communication of the Tribunal's Final Order was the relevant date. In the result, the refund claim filed by the respondent on 28 -10 -2010 was found to be within the prescribed period of one year from 10 -11 -2009, the date on which the Tribunal's Final Order was received by the respondent. The Department is aggrieved by this decision of the learned Commissioner (Appeals).

(3.) THE learned consultant for the respondent, at the outset, submits that the duty was paid, admittedly, under protest and, therefore, the time -bar provisions of Section 11B of the Act are not applicable by virtue of the second proviso to sub -section (1) which reads thus: "Provided further that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest." It is submitted that the protest was never vacated and that it was subsisting at the time of filing of refund claim. Even if the protest is assumed to be inoperative or ineffective, it is argued, the refund claim cannot be rejected as time -bar red in view of the Apex Court's decision embodied in para 85 of its judgment in Mafatlal Industries Ltd. v. UOI [ : 1997 (89) E.L.T. 247 (S.C.)] wherein it was held that once a person had paid duty under protest in accordance with the prescribed procedure, the period of limitation prescribed under the statute would not be applicable to a claim for refund of such duty. The learned consultant has referred to a few decisions of this Tribunal which held limitation to be inapplicable to claims for refund of duties paid under protest.