Custom, Excise & Service Tax Tribunal
Aurobindo Pharma Ltd vs Hyderabad - G S T on 3 July, 2024
(1) Appeal No. E/30461/2023
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
REGIONAL BENCH - COURT NO. - I
Single Member Bench
Excise Appeal No. 30461 of 2023
(Arising out of Order-in-Appeal No.HYD-CE-HYD-APP-003-23-24 (APP- 1), dated
11.08.2023 passed by Commissioner of Customs & Central Tax (Appeals-I), Hyderabad)
M/s Aurobindo Pharma Ltd., .. APPELLANT
Galaxy, 22nd to 24th Floors,
Plot No. 1, Survey No. 83,
Hyderabad Knowledge City,
Raidurg Panmaktha,
Ranga Reddy,
Telangana - 500 032.
VERSUS
Commissioner of Central Tax .. RESPONDENT
Hyderabad - GST Kendriya Shulk Bhavan, L.B. Stadium Road, Basheerbagh, Hyderabad, Telangana - 500 004.
APPEARANCE:
Shri K Nagaraja Rao, Advocate for the Appellant. Shri K Sreenivasa Reddy, Authorised Representative for the Respondent. CORAM: HON'BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL) FINAL ORDER No. A/30339/2024 Date of Hearing:03.07.2024 Date of Decision:03.07.2024 [ORDER PER: A.K. JYOTISHI] M/s Aurobindo Pharma Ltd., (herein after referred to as appellant) are in appeal against the order of the Commissioner (Appeals) dated 11.08.2023 (impugned order) whereby he has upheld the order of the Original Authority rejecting the claim of refund and rejected the appeal filed by the appellant against the said Order-in-Original.
(2) Appeal No. E/30461/2023
2. The background of this appeal is that the appellants were, interalia, availing Cenvat Credit in respect of input and input services and the department noticed that they had taken a credit of Rs. 15,95,280/- in respect of "insurance premium" paid for group insurance services. According to Department, the credit availed on medical insurance was irregular in view of sub-rule (l) to Rule 2(1) of Cenvat Credit Rules 2004 and therefore they demanded an amount of Rs. 15,95,280/- towards irregularly availed Cenvat Credit under Rule 14 of CCR read with proviso to Section 11A(1) of Central Excise Act, 1944. In the meanwhile, the appellants informed the Department that they have reversed the service tax "under protest" credit availed on, interalia, health insurance services during the period 10.09.2004 to 31.03.2007.
3. On adjudication, the Original Authority dis-allowed the Cenvat Credit of input services availed in respect of insurance services and confirmed a demand along with imposition of penalty etc. Against the said order, the appellants went before the Commissioner (Appeals), who vide his order no. dated 31.03.2010, interalia, held that the appellants were eligible for Cenvat Credit of service tax paid on the insurance service in respect of the group mediclaim insurance policies of the employees and accordingly set aside the impugned order passed by the lower Adjudicating Authority. Admittedly, the appellants have not gone in appeal against this order in view of the fact that this was in their favour, whereas, Department went in appeal before the Tribunal and the Tribunal also finally upheld the order of the Commissioner (Appeals) dated 31.03.2010 rejecting Department's appeal.
4. The issue in the present appeal is however concerning with the refund for Rs. 15,95,280/- cleared by the appellants on 12.07.2021 as a (3) Appeal No. E/30461/2023 consequence to orders, cited supra, in their favour. The Department after going through various provisions issued a show cause notice asking them as to why the refund amount should not be rejected. On adjudication, the Original Authority after going through various provisions under the CGST Act and sub-section (2) of Section 11B of Central Excise Act held that the relevant date for this refund application is the date of order of the CESTAT passed on 05.05.2016. He also examined the provisions under the Central Excise Act, specifically Clause (ec) of explanation B to Section 11B, and held that the time limit for the said refund is applicable from the date of the order of the CESTAT i.e. 05.05.2016, therefore, making the refund application barred by limitation and therefore rejected the refund claim dated 12.07.2021.
5. On appeal before the Commissioner (Appeals), the issue was examined by the Commissioner (Appeals) who has mainly relied on legal provisions of Section 11B and the facts of the case to decide whether there is any provision for not applying limitation in case of payment "under protest" or otherwise. He observed that as per second proviso to Section 11B(1), there is a provision that in case the payment is made under protest that the limitation of one year will not apply. Admittedly, it is not in dispute that they have not reversed the credit under protest. However, he also observed that Clause (ec) of explanation B of Section 11B provides for relevant date in specified situation where, interalia, duty becomes refundable as a consequence to any order, decree, judgment etc., of Appellate Authority, Appellate Tribunal or any Court. He also examined the case laws cited namely Kisan Co-operative Sugar Factory Ltd., Vs CCE [2018 (8) GSTL 365 (All)] and M/s Mafatlal Industries Ltd., Vs UOI [1997 (89) ELT (4) Appeal No. E/30461/2023 247 (SC)] and distinguishes their case in view of insertion of Clause (ec), cited supra, at a later date.
6. In his impugned order the Commissioner (Appeals) has relied on Hon'ble Punjab & Haryana High Court judgment in the case of Malwa Industries Ltd., Vs UOI [2018 (361) ELT 8 (P & H)] to conclude that where the payment is made under protest and is followed by litigation or any appeal before Tribunal, Court etc., the date of final order becomes relevant for the purpose of limitation. The appellants are in appeal against this impugned order.
7. The Learned Advocate has reiterated the grounds taken in appeal and submits that duty paid under protest is excluded from time limit as per the last proviso to Section 11B and that Section 142(30(f) provides for refund in cash, in such situation.
8. Learned DR reiterates the grounds taken by Commissioner (Appeals) for rejecting the refund claim and emphasises that appeals on merits of eligibility of input service or otherwise were filed before the appointed day 01.07.2017 and issues were also settled prior to appointed day by Appellate Authority and Tribunal and that the relevant date would be passing of order dated 05.05.2016 by the Tribunal as it had reached finality and appellants has clearly not filed refund claim before expiry of one year before the said date and infact they filed only on 12.07.2021. He has also relied upon certain judgments in support of this.
9. Heard both the sides and perused records.
(5) Appeal No. E/30461/2023
10. The first issue in Commissioner (Appeals) in his reliance on Clause (ec) of explanation of Section 11B, in the case where duty becomes refundable as a consequence of judgment, decree, order, direction of the Appellate Authority. Clause (ec) is reproduced below for ease of reference:
"in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of Appellate Authority, Appellate Tribunal or any court, the date of such judgment, decree or order or direction will become relevant date for the purpose of seeking refund under Section 11B".
In other words, a plain reading would indicate that while there will be no limitation if duty has paid under protest as long as the matter is pending before any Appellate Fora, Court etc., but once they decide the matter and the refund becomes eligible to the appellant as a consequence of said judgment then the date of that judgment itself becomes the starting point for deciding the limitation of one year under Section 11B. In this case, the order of the Commissioner (Appeals) of 31.03.2010 itself was the relevant date when the decision went in favour of the appellant and no further appeal was filed by the appellant and they could have taken the credit in their books of account as there was no provision for cash refund under existing law. Apparently, the appellants did not file for any refund or re-credit before the proper authority after the passing of the order by the Commissioner (Appeals). Even if it is presumed that they were not aggrieved by the order of the Commissioner (Appeals) and the Department who went in appeal against the said order before the Tribunal, order of the Tribunal dated 05.05.2016 makes it a finality to the issue in so far as the issue of eligibility of the credit was concerned and as a consequence, they would have been eligible to take the credit either Suo-moto or under intimation to the Department within one year of said order. However, they did not do so. They have admittedly also not taken this credit before the appointed date (6) Appeal No. E/30461/2023 01.07.2017 which could have been migrated through TRAN-1 route under GST Regime.
11. Commissioner (Appeals) has also relied on the judgment of Hon'ble High Court of Punjab & Haryana in the case of Malwa Industries Vs UOI [2018 (361) ELT 81 (P & H)] in support of his views that the refund in the given facts of the case is hit by time limit prescribed under Section 11B. He has analysed the relevant provisions and pointed out that of insertion of Clause (ec) was to provide for time limit in cases of refund where claim arises as a consequence to Appellate order under Section 11B.
12. While the general provision of non applicability of limitation would not be applicable in such cases where payment has been made under protest but after insertion of Clause (ec), irrespective of whether payment of duty was under protest or otherwise, the refund claim arising out of such orders passed by Appellate Authority has to be made within one year of such order. The judgment of Hon'ble Punjab & Haryana High Court in Malwa case, cited supra, supports this view. Admittedly, appellants have not filed it within said period. Even reliance under Section 142(3) of CGST Act, 2017 is not correct as such cases where the refunds were otherwise permissible under existing law can only be covered under said provision. In this case, it was clearly a time barred case within existing law prior to appointed date itself.
13. Therefore, Commissioner (Appeals) order rejecting the appeal filed by the appellants on the reasons and the cited legal provisions, does not suffer from any infirmity in the facts of the case and is sustainable. There is a clear default of limitation in filing of refund application by appellant and (7) Appeal No. E/30461/2023 hence not eligible to get the said refund under Section 11B of Central Excise Act.
14. Appeal dismissed.
(Dictated and Pronounced in open court) (A.K. JYOTISHI) MEMBER (TECHNICAL) jaya