Supreme Court rejected claim for refund filed beyond limitation period by assessee

No Comments

Fact: M/s Western Coalfields Ltd.(“the Assessee”) is a Public Sector Undertaking engaged in coal mining, where price of coal is fixed by the Coal Ministry and accordingly the assessee sold the goods at the fixed price and no central excise duty is payable on coal. The Assessee bought conveyor beltings from the manufacturer who cleared the finished goods feneplast PVC impregnated conveyor beltings classifying the same under sub heading 3920.12 on the Central Excise Tariff Act, 1985 and paid the duty under protest. The Assessee filed application of claim of refund of the excise duty that was paid by manufacturer.

Issue Involved: Whether the period of limitation of six months shall apply where the refund of central excise duty has been claimed by the buyer and paid by the manufacturer under protest.

Assessee’s Interpretation of Law: Theassessee stated that he has bought book from manufacturer filed application of claim of refund on December 20, 1996 for the period from July 20, 1988 to January 15, 1994, on the ground that payment was made towards central excise duty by the manufacturer under protest due to pending classification and also after the settlement of dispute by this Court. So, he argued that the said duty should be refunded by excise department, while noting that as per amendment u/s 11B of Central Excise Act, 1944 there is no bar in claiming refund and the six months limitation shall not apply in case where duty is paid under protest.

Held: TheHon’ble Supreme Court dated February 20, 2019 stated with reference to Section 11B of Central Excise Act, 1944 which states that the claim of refund of duty as paid on his own accord by any person for refund of such duty to the competent authority before the expiry of six months from the relevant date as prescribed but where the duty was paid under protest in terms of 2nd proviso to Section 11B (1) of Central Excise Act, 1994, the period of limitation may not apply.

Therefore, SC rejected refund claim filed by assessee of conveyor beltings, a Public Sector Undertaking engaged in coal mining, beyond 6 months of purchase in respect of central excise duty paid by manufacturer under protest by stating that “The scheme of Section 11B of central Excise Act, 1944 makes a distinction between right of the manufacturer to claim refund from right of the buyer to claim refund treating them separate right under Section 11B of the Act”. Hence, it is clarified that though the assessee had the right to claim the refund, but same was restricted within the limitation of six months as per Sec 11B of Central Excise Act, 1944.

Citation: [ TS-76-SC-2019-EXC ]