TMI Blog2018 (12) TMI 1471X X X X Extracts X X X X X X X X Extracts X X X X ..... eference to the refund claim filed by the appellants claiming refund of the MODVAT Credit balance available in their account on the date of surrender of the registration. They had also claimed the refund of PLA balance. The refund claims have been considered by the lower authorities and the Assistant Commissioner rejected the refund claim on the basis of time bar. In appeal, the Commissioner (Appeals) considered the submissions and rejected the refund claims for merits as well as on limitation. In fact, he upheld the order of the Assistant Commissioner. 3. We have heard Shri. Vipin Kumar Jain, learned Counsel on behalf of the appellants and Shri. Anil Choudhary, learned Assistant Commissioner (AR), on behalf of the Revenue. 3.1 Arguing on behalf of Appellant learned counsel submitted that: i. the appellants are challenging the order of the Commissioner (Appeals) both on merits and limitation. Both the authorities have failed to appreciate they were deprived from filing the refund claim immediately after the surrender of the registration. When they surrendered their registration, the range officer advised them that their surrender will be accepted only after closure of proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bar by limitation. b) Whether the Commissioner (Appeals) was right in rejecting the refund claim on merits also when the Assistant Commissioner has not done so. 5.1 On the issue of refund of balance MODVAT credit at the time of surrender of registration, the larger bench of tribunal has settled the law holding against the appellants in the case of Gauri Pisiculture [2006 (202) ELT 199 (T-LB)]. In the said decision tribunal larger bench has held as follows: 8. Detailed reading of the above judgments, leads in to the fact that wherever the assessee was unable to utilize the credit on account of objection raised by the Department or actions taken by them by way of initiation of proceedings or paid duty out of modvat account at the Department s insistence, and for that reason, he had to pay duty in cash or out of the PLA, they would be entitled to refund of that credit in cash, on the dispute being ultimately settled in their favour. In the decisions holding that such refund in cash is not possible, it has been observed that there is no provision allowing refund of such credit in cash. However, we are not in agreement with the above proposition for the simple reason that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. As such, even if the amounts towards duty would not have been debited by them in the said account, the same would have been remained unutilized. As such, on the success of their appeal before the Commissioner (Appeals), they cannot claim the refund of the same in cash, inasmuch as on account of such debit entry, they have not discharged any duty out of PLA. If the said refund is granted to the appellants by way of cash, the same would amount to making him unjustifiable enrich. It is well settled principles of law that what cannot be done directly should not be allowed to be done indirectly. On surrendering of their licence, the appellants was not allowed to claim the refund of the unutilized credit in the Modvat account, the same would have lapsed. As such, utilization of the same towards payment of disputed demand of duty, after surrendering of their registration, has not led to a situation where the assessee was compelled not to use the credit for regular clearances and had to make payment from PLA. As such, in this case we find that the refund in cash is not to be allowed. 5.2 It is not the case of the appellant that they were at any time barred by the revenue from uti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed this refund claim. Thus the boundaries for the processing of refund claim has to be drawn by the claimant and not the authority deciding the refund claim. 6.2 In case of Section 11A, the first documents, whereby proceedings are initiated is the show cause notice. In this manner department/investigating authority states its the ground for said proceedings. Thus in all the proceedings after the issuance of show cause notice department is bound within the four boundaries laid down by the show cause notice. Thus distinction make the proceedings undertaken in terms of section 11B different from the proceedings under Section 11A. 6.3 While rejecting or admitting the refund claim by any authority all the three grounds forming the basis of refund claim have to be considered by the Assistant Commissioner and if the refund claim has been rejected on time bar even without mentioning a merits, the refund claim has been rejected in which merits and all other things have been considered. Thus in appeal appellant challenges the order of the Assistant Commissioner will have to satisfy the Appellate Authority with regards to admissibility of the refund claim. 6.4 Appellate Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the Commissioner (A) continues to exercise the powers of the adjudicating authority in the matters of assessment. Under Section 35B any person aggrieved by the order of the Commissioner as an adjudicating authority is entitled to move the Tribunal in appeal. Section 35B indicates that the decision of order passed by the Commissioner (A) shall be treated as an order of an adjudicating authority. In the circumstances the High Court had erred in holding that the assessee was not entitled to agitate the question of dutiability in appeal before the Tribunal. 6.6 To support their arguments on limitation, appellants have shown certain correspondences/ letters written by the range officer to them when they surrendered the registration certificate. On the basis of the said letter they claim that they were not allowed to file the refund claim. 9.2 They have enclosed a copy of the surrender letter available at page 26 of the paper book. By the said letter they have stated the manufacturing activities undertaken by them at the said registered premises shall come to close with effect from 21st December 1999. In the said letter they have also disclosed the credits available in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimant when to file the refund claim. 7.2 Since the appellants heave themselves chosen to file the refund claim in time and manner most appropriate they are responsible for the consequences and cannot shift the burden of their negligence to anyone else. For this argument reference is made to para 22 of the Supreme Court decision in case of Mafatlal Industries [1997 (89) ELT 247 (SC)]- 22. There is as yet a third and an equally important category. It is this : a manufacturer (let us call him X ) pays duty either without protest or after registering his protest. It may also be a case where he disputes the levy and fights it out up to first Appellate or second Appellate/Revisional level and gives up the fight, being unsuccessful therein. It may also be a case where he approaches the High Court too, remains unsuccessful and gives up the fight. He pays the duty demanded or it is recovered from him, as the case may be. In other words, so far as `X in concerned, the levy of duty becomes final and his claim that the duty is not leviable is finally rejected. But it so happens that sometime later - may be one year, five years, ten years, twenty years or even fifty years - the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he money available in the hands of the appellants itself and they could have claimed the refund of the same at any time. Accordingly, in respect of refund for the balance lying in PLA, the order of the lower authorities to be upheld. 9. In view of the above discussion and relying on the decision, the Larger Bench of Tribunal in the case of Gauri Plasticulture (P) Ltd., reported in 2006 (202) ELT 199 (Tri-LB), the order of the lower authority is upheld except for the refund of PLA amount. The appeal is disposed of in above terms. (Pronounced and dictated in Court) (Archana Wadhwa) Member (Judicial) (Sanjiv Srivastava) Member (Technical) Per: Mrs. Archana Wadhwa 10. While agreeing with the findings of the learned Brother as regards the refund of PLA amount of ₹ 15,224/-, I have different views as regards the refund of unutilised Cenvat Credit lying in the assesse s accounts at the time of closing of their manufacturing unit. Though my learned Brother has detailed the facts in his order, but to elaborate further factual position, which is required to be taken into consideration, I would like to refer to some of the further facts. 11. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved and there are no issues pending adjudication at any time, we have preferred this application for refund of Excise Duty, which is due to us. Unutilized credit balance in RG 23A (Part-II) pertains to actual payments made by us in the form of CVD and all the credits have been verified as can be seen from the attached copy of RG 23A (Part-II). We request your honour to kindly pass our refund application and order for refund of unutilized balance in PLA as well as RG 23A (Part II) at your very earliest. In case you need any other documents to be produced in this communication or attend any personal hearing may kindly be communicated to us and oblige. 12. As is clear from the above letter, there is a reference to the earlier correspondence clarifying that since their surrendering of registration application was not accepted by the Government on the ground of continuation of certain disputes against them, which disputes now stand settled, the deregistration may be accepted vide the same letter, they filed a refund of the pending unutilised Cenvat Credit. 13. It is seen that against the said refund application filed by the appellant no show-cause notice was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... + PLA balance of ₹ 15,224/-) since it is not filed within a period of one year from the date of surrendering the registration as required under the provisions of Section 11B of the Central Excise Act, 1944. 15. A reading of the above order of the Assistant Commissioner leads to an inevitable conclusion that the refund claim stands rejected by him only on the point of limitation, without giving any findings on the merits of the case, though a reference stands made by him to the Hon ble Karnataka High Court in the case of Slovak India Trading Co. Pvt. Ltd. (supra). However, the merits did not stand discussed by him and his views on the merits are not available. 16. The first issue, which arises is as to whether in such a scenario, was it open to the Commissioner (Appeals) to frame an issue on the merits of the case. The appellate authority has gone to the merits of the case and has rejected the appeal on merits as also on limitation. 17. In my views when the original authority has not expressed any opinion on the merits of the case, it is not even clear as to whether he has agreed with the assessee on merits or not. We have also seen the appeal filed by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graphs once the issue of limitation is decided by me. 19. As regards limitation, it is seen that there is no dispute on the facts of the case. The appellant filed an application surrendering their licence in December 1999. Such surrendering was not accepted by the Revenue. There is no further communication accepting such surrendering by the proper officer. As such in terms of the first letter written by the Range Superintendent intimating the appellants that their surrender application would not be accepted and registration would not be considered as cancelled at all till the clearances of all the proceedings pending against them relatable to excise or customs. As per the appellants, such proceedings were over by 2006 only. 20. In such a scenario, the appellant could not have filed refund claim at all inasmuch as the refund would arise only when their surrender application is accepted by the Revenue. As such, with due respect, the findings of my Ld. Brother that the said letter of December, 1999 written by the Superintendent has not debarred the assessee to file the refund claim are being differed by him inasmuch as the cause of action would arise only when the assessee becom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid decision that the earlier identical matter was dismissed by the Hon ble Supreme Court by way of dismissal of SLP and legal issues were not concluded. As such, the Court observed that they cannot take a different view from the view taken by a co-ordinate bench and the questions are required to be decided by the Larger Bench of the court. As such, the matter stands referred to the Larger Bench. 23. Inasmuch as I have observed that the matter needs to be remanded to the original adjudicating authority for decision on limitation as also on merits, the adjudicating authority is expected to take into consideration the entire development on the said legal issue by way of various decisions of the Tribunal as also the fact that the matter stands referred to Larger Bench and it would be in the interest of justice that the Larger Bench of the Bombay High Court decision in the above referred case may be awaited till the final decision is taken. 24. In view of my forgoing discussion, I deem it fit to set aside the impugned order and remand the matter to the adjudicating authority for fresh decision on limitation as also on merits, in the light of the observations made as above, instea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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