Customs, Excise and Gold Tribunal - Delhi
National Winder vs Commissioner Of Central Excise, ... on 22 January, 2002
Equivalent citations: 2002(80)ECC338, 2002(141)ELT483(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. This appeal has been preferred against the impugned order-in-appeal dated 24-3-2001 of the Commissioner (Appeals) vide which he had affirmed the Order-in Original dated 30-7-1998 of the A.C. disallowing the refund claim of the appellants.
2. The appellants are engaged in the manufacture of electric fans. They are exporting the fans besides clearing in the local market. They availed benefit of Duty Entitlement Certificate Scheme (DEEC Scheme). They imported raw material under the value based and quantity based advance licences issued to them under the said scheme. The Notification No. 203/92-Cus., dated 19-5-92 exempted the materials imported against that licence from the payment of whole of customs duty and additional duty, subject to the conditions specified therein. The appellants were initially not aware of the notification and on realisation their mistake, they decided to reverse the credit. However, they vide letter dated 30-1-95 intimated to the department that reversal of Modvat credit due to mistake, should be treated to had been done under protest. This they so stated as they were not sure that no input stage credit was obtained on exported goods, as only part of the Modvat credit already availed by them on lumpsum basis, was relatable to the exported goods. Later on when they noticed the mistake after reversing the Modvat credit, they rectified that mistake by recrediting the amount in RG-23 Part-II on 12-12-96. But when Assistant Commissioner objected to the recredit having been taken without prior permission, they again debited the recredited amount on 10-2-97. On the insistence of the Additional Commissioner, they also deposited the interest on the delayed reversal of the Modvat credit for the period 12-12-96 to 10-2-97. Thereafter, they filed refund claim on 29-5-97 for the amount debited by them under protest. They were, however, issued show cause notice by the A.C. for rejection of their claim being time barred. The A.C. vide order dated 30-7-98 rejected their claim on the ground of limitation. The Commissioner (Appeals) had affirmed that order of the A.C., through the impugned order.
3. The learned Counsel has contended that since reversal of the credit was done under protest as per letter dated 30-1-95, the period of limitation of six months prescribed under Section 11B of the Act for claiming refund, was not applicable to their case. In the alternative, the counsel has also contended that period of limitation even if applicable, started only from 10-2-97 when they debited the recredited amount under protest at the asking of the A.C. Therefore, the impugned order of the Commissioner (Appeals) deserves to be set aside. The counsel has also referred, in support of his contention, the Apex Court judgment in India Cement Ltd. v. CCE - 1989 (41) E.L.T. 358 (S.C.) and the Tribunal's judgment in Rosin & Turpentine Factory v. CCE -1994 (73) E.L.T. 66.
4. On the other hand, learned SDR has only reiterated the correctness of the impugned order.
5. We have heard both the sides and gone through the record.
6. The facts are not much in dispute. The appellants when firstly reversed the credit, sent letter dated 30-1-95 to the excise department. The relevant para of that letter is extracted below :-
"We however undertake to debit any deficiency of Modvat Credit noticed at any subsequent stage but at the same time want to make it clear that in case any excess debit is noticed at a subsequent stage it may be deemed to have been done under protest".
7. It also remains undisputed that on realising the mistake committed by them while reversing the Modvat credit, they later on recredited the amount in their statutory record on 12-12-96. It is only after an objection raised by the A.C. that recrediting could not be done without prior permission, they again debited the recredited amount on 10-2-97. They were also asked to make deposit of the interest on delayed reversal of the Modvat credit, as is evident from the department's letter dated 4-4-97. The deposit of interest was also made by them under protest as is clear from their letter dated 29-5-97.
8. From resume of the above referred detailed facts, it is quite evident that the reversal of the credit was made by the appellants under protest. That being so, the provisions of Section 11B were not attracted to their case. Their claim for refund of the amount could not be summarily dismissed on the ground of limitation.
9. In India Cement Limited case (supra), the Apex Court has observed that even writing of the assessee to the department that if department feels duty is leviable they had no option, amounted to protest as no form was prescribed for payment of duty under protest under Rule 11 prior to indication of Rule 233B of the Rules. Similarly, in Rosin & Turpentine Factory case (supra), the Tribunal had held that payment was made under protest, by treating the letter sent by the assessee as protest letter.
10. Apart from this, from the facts and material brought on record, referred to above, it is evident that cause of action for claiming refund accrued to the appellants on 10-2-97 when they were directed by the A.C. to debit the recredited amount and they were also asked to pay even interest for the period 12-12-96 to 10-2-97 on account of delayed reversal of the credit. The payment of interest was accepted from them in May, 1999. Earlier to that, they had no occasion to claim refund of the Modvat credit because they had themselves recredited the amount in their RG-23 Part-II on 12-12-96. The right to claim recredit of the debited amount accrued to them only after 10-2-97 when under the order of the A.C., they had to make debit entry and also pay interest thereon. From that date the claim of the appellants is perfectly within time.
11. In the light of the discussions made above, the impugned order of the Commissioner (Appeals) rejecting the Modvat claim of the appellants, on the question of limitation is set aside. Since the matter had not been decided on merit, by the authorities below, the case is sent back to the A.C. for adjudicating on merit, the refund claim of the appellants after hearing them. The appeal of the appellants stands disposed of in these terms.