Ramesh Flowers Pvt. Ltd. 100% EOU Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that refund claims rejected as time-barred considering the date of re-submission of refund claim as the date of filing of refund claim and ignoring the date on which the initial/ original refund claim was filed is unsustainable in law.
Facts-
The appellant filed refund claims for the unutilized accumulated cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.27/2012-CE (NT) dated 18.06.2012. The refund claims were returned to the appellant by the authorities below stating that documents furnished are insufficient and that claims required corrections. The appellants resubmitted the refund claims after making good the omissions and also furnished necessary documents. However, the refund sanctioning authority rejected all the refund claims as time-barred stating that the refund claims have been filed beyond the period of one year as envisaged under Section 11B of the Central Excise Act, 1944.
Conclusion-
I hold that the three refund claims which have been rejected as time-barred ignoring the date on which the claims were initially filed cannot sustain and requires to be set aside.
Held that the procedure to file a refund claim for a quarter is only to make the filing and processing easier. The last month which is included in the quarter would have to be reckoned for computing the period of one year. When the notification allows the assessee to file refund claims for a quarter, such right of refund cannot be snatched away by computing one year from the first month of the said quarter.
FULL TEXT OF THE CESTAT CHENNAI ORDER
These appeals are filed against the orders passed by the authorities below rejecting the refund claim as time-barred.
2. On behalf of the appellant, Ld. Counsel Shri S. Venkatachalam appeared and argued the matter. He submitted that the appellant is engaged in exporting dry flowers and bouquets. They filed refund claims for the unutilized accumulated cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.27/2012-CE (NT) dated 18.06.2012. . The refund claims were filed for the respective quarters for an amount of Rs.6,11,540/-, Rs.3,66,312/-, Rs.6,70,721/-and Rs.5,11,398/- being the cenvat credit of inputs and service tax paid by the appellant on input services for the quarters October 2013 to December 2013 / January 2014 to March 2014 / April 2014 to June 2014 / July 2014 to September 2014. Refund claims were filed on 23.12.2014, 27.03.2015, 30.06.2015 and 25.09.2015. The first three refund claims were returned to the appellant by the authorities below vide letters dated 27.02.2015, 07.04.2015 and 20.07.2015 stating that documents furnished are insufficient and that claims required corrections. The appellants resubmitted the refund claims after making good the omissions and also furnished necessary documents. The first three refund claims were thus resubmitted on 10.07.2015, 10.07.2015 & 01.09.2015. The refund sanctioning authority rejected all the refund claims as time-barred stating that the refund claims have been filed beyond the period of one year as envisaged under Section 11B of the Central Excise Act, 1944. He submitted that the Department has taken the date of resubmission of the claims as the date of filing claims and therefore held that the claims are time-barred. Ld. Counsel submitted that the said view of the Department is incorrect. The date of original filing of the claims should be considered as the date for computing the period of limitation and not the date of resubmission. He relied upon the following decisions:
(i) 2015 (315) E.L.T. 100 (Tri. – Kolkata) – Balmer Lawrie & Co.Ltd.
(ii) 2009 (237) E.L.T. 689 (Tri. – Mumbai) – Duraline India Pvt. Ltd.
(iii) 2006 (206) E.L.T. 536 (Tri. – Bang.) Rubberwood India (P) Ltd.
(iv) 2005 (184) E.L.T. 240 (Guj.) – United Phosphorus Ltd.
(v) Chennai Petroleum Corpn. Ltd Vs CGST & C EX – 2019 (369) E.L.T. 1636 (Tri.-Chennai)
3. Ld. Counsel submitted that the original authority failed to consider the above decisions and held that these decisions are not applicable as these decisions pertain to the period before 2012. Ld. Counsel submitted that there is no change in Rule 5 of Cenvat Credit Rules, 2004 before or after 2012. Notification issued under Rule 5 of CCR has been changed. Prior to 2012, Notification No.5/2006 was applicable whereas after 2012 Notification No.27/2012 is to be followed. A plain reading of both the notifications would establish that there is no substantial change in the basic principles for claim refund of unutilized credit. Hence the finding of the lower authority that the above decisions are not applicable and that refund claims are time-barred is erroneous. It is submitted by the Ld. Counsel that in regard to the fourth claim for the period July 2014 to September 2014, the appellant was not issued even a deficiency memo. As per CBEC Manual, it is provided in para 3.2 of Chapter 9 that a deficiency memo should be issued within 15 days of receipt of the refund claim. The same has not been followed and the claim has been rejected as time-barred. With regard to the fourth claim, the Department has computed the period of one year from the first month of the respective quarter and held that the refund is time-barred. He submitted that computation of period of one year has been erroneously done by the department to hold that refund claims are time-barred. He prayed that appeals may be allowed.
4. A.R Ms. Anandalakshmi Ganesh Ram appeared and argued for the department. She adverted to Notification No.27/2012-CE (NT) dated 18.06.2012 and submitted that clause (b) of para-3 of the said notification states that claim has to be filed before expiry of the period specified in Section 11B of the Central Excise Act, 1944. The appellant had initially filed the refund claims without supporting document. The same was returned to the appellants. The refund claims were not complete in all respects and the claims were thereafter filed beyond the period of one year. The contention of the appellant that the date when the claim was originally filed has to be taken to compute the period of one year cannot be accepted as the claim was incomplete.
5. A.R submitted that the contention of the appellant that period of one year has to be computed from the last month of the quarter cannot be accepted. If the period of one year is computed from the first month of each quarter it can be seen that the claims have been filed beyond the period of one year. She relied upon the decision in the case of CCE Chennai Vs Celebrity Designs India Pvt. Ltd. – 2015-TIOL-646-HC-MAD-CX and the decision in the case of CCE Vs GTN Engineering – 2012-TIOL-369-HC-MAD-CX. Ld. A.R prayed that the appeals may be dismissed.
6. Heard both sides.
7. The details of the refund claims filed along with date of filing of refund claims as well as date of resubmission are as below :
