CESTAT: Claim for Refund of Deposits Lying With Department Is Beyond Scope of Sec.11B of Central Excise Act
The Customs, Exercise & Service Tax Appellate Tribunal (CESTAT) held in the case titled M/s KEC International Ltd. (Appellant) v. Commissioner of Central Excise & CGST (Respondent) held that a claim for refund of deposits lying with the department falls beyond the scope of Sec.11B(1) of the Central Excise Act (Act).
The CESTAT Judicial Member Mrs. Rachna Gupta observed that the amount regarding which refund is claimed is neither payment of duty nor interest. It ruled that the appellant is entitled to refund according to the principles of equity and the Tribunal is a quasi-judicial authority hence it lacks jurisdiction to appreciate principles of equity; the appellant shall exercise the alternative civil remedy or the remedy of writ jurisdiction.
An appeal was filed by M/s KEC International Ltd., before the Tribunal being aggrieved by the denial of its claim for refund of the unutilized balance of PLA accumulated till 30 June 2017.
The department rejected the claims of the appellant on grounds of lapse of limitation period prescribed under Sec.11B(1) of the Act. The rejection of the claim was justified by the Department by relying on the case of Collector of Central Excise, Chandigarh v. M/s. Doaba Co-Operative Sugar Mills [1988 (37) ELT 478 (S.C.)].
The CESTAT analyzed the scope of power to grant a refund and stated that Section 11B of the Central Excise Act, is the only provision that empowers the Department to grant a refund, nevertheless, the same applies only in respect of duty or interest and not to deposits as claimed for by the Appellant.
It held that there was no infirmity in the order rejecting the claim for refund. Moreover, such rejection was justified as the application was barred by limitation.
The CESTAT concluded that "It has already been a settled law that in making claims for a refund before the Departmental Authorities an assessee is bound within four corners of the statute and the period of limitation prescribed in Central Excise Act and Rules framed there-under must be adhered to."
The Tribunal stated that the appeal in hand is dismissed. It gave liberty to the appellant to exercise the alternative civil remedy or the remedy of writ jurisdiction.