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November 30, 2022

A Re submitted refund claim cannot be denied because it is time-barred as original filed in time

by CA Shivam Jaiswal in Income Tax

A Re submitted refund claim cannot be denied because it is time-barred as original filed in time

Facts and issue of the case

As per Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE (NT) dated 18.06.2012, the appellant filed refund claims for the unused accumulated cenvat credit. The authorities below sent the refund claims back to the appellant with a note that the provided documentation was insufficient and that the claims needed to be corrected. After correcting the errors, the appellants resubmitted their refund requests and included all required supporting documentation. The Central Excise Act of 1944’s Section 11B, which stipulates a one-year waiting period, was violated, and the refund sanctioning body rejected each and every refund claim as being time-barred.

The details of the refund claims filed along with date of filing of refund claims as well as date of resubmission are as below :

The department has taken a view that when claims have been resubmitted, the period of one year has to be computed from the date of resubmission. The discussion made by the original authority in this regard is as under : “ As regards the second issue as to whether the subject claim filed by the exporters for the quarter October, 2013 to December, 2013 is time barred. I find that the claim had been filed initially on 23.12.2014 without any supporting documents required to be submitted as specified in Form-A. Hence, their claim had been returned to them and their claim with the documents specified had been filed only on 10.07.2015, which is after a period of one year from the end of the quarter October, 2013 to December, 2013. The contention of the exporters that the date i.e. 23.12.2014 on which they filed the claim initially should be considered as the date of filing the claim cannot be accepted since any claim which does not satisfy the safeguards, conditions and limitations specified by Notification No.27/2012-CE(NT) dated 18.06.2012 ibid cannot be considered as a valid claim filed under Rule 5 of the CCR, 2004. Hence, I am convinced to hold that the claim is time barred.”

The rejection of refund claims as time-barred by ignoring the date of initial filing of the claim is not sustainable. The Tribunal in the case of Repco India Ltd. Vs CCE Belapur – 2016 (43) STR 203 (Tri.-Mumbai) had analyzed the similar issue and held that when claim has been returned for rectifying the deficiencies the claim cannot be held to be time-barred by computing the period of one year from the date of resubmitting the claim

Observation of the court

The tribunal after hearing to both parties

 In the present case, when the period of one year is computed from the date of initial filing of the claim, the claims are made well within time. The date of initial submission of the refund claim is 10.07.2015, 10.07.2015, 01.09.2015. The Ld. A.R has relied upon the decisions in the case of GTN Engineering and Celebrity Designs India Pvt. Ltd. (supra). The issue considered in these decisions was whether the limitation prescribed in Section 11B of Central Excise Act, 1944 is applicable when refund claim is filed under Rule 5 of CCR, 2004 read with Notification No.5/2006. In the present case there is no dispute as to whether limitation is applicable or not. The dispute is as to how to reckon the period of one year. Hence these decisions are of no support to the Revenue. 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.

In regard to the claim for July 2014-September 2014 it is seen that when computed from the last month of the quarter, the claim is filed well within time. The claim has been held to be time-barred computing the period of one year from the first month of the quarter. When the notification prescribes to file the refund claim for a quarter, the entire quarter has to be considered as a whole, without splitting each month. The appellant is eligible to get refund of unutilized credit of every month. The procedure to file 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.

Ld. A.R has submitted that even at the time of resubmission, the appellant has not furnished necessary documents. It is noted in the impugned order as well as the order passed by the original authority that the appellant has not furnished E.R.2 returns and other necessary documents for processing the refund claims. Taking note of this aspect, I am of the view that matter requires to be remanded to the original authority for processing the refund claims after giving an opportunity to the appellant to furnish the required documents.

Conclusion

When computing a year, the last month that makes up a quarter must be taken into account. When the assessee is given permission to submit refund claims for a quarter, such permission cannot be revoked by computing one year from the first month of said quarter.

From the discussions above, the impugned order rejecting the refund claims as time-barred is set aside. The matter is remanded to the original authority who shall process the refund claims after giving an opportunity to the appellant for personal hearing as well as to furnish the requisite documents. The appeals are partly allowed and partly remanded to the original authority in the above terms.

Ramesh-Flowers-Pvt.-Ltd.-100-EOU-Vs-Commissioner-of-GST-Central-Excise-CESTAT-Chennai

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