Ramesh Nair, Member (J)

1. The brief facts of the case are that the appellants during investigation of the demand case paid the duty, interest and 25% penalty. Subsequently, the said demand case has been settled in favour of the appellant vide this tribunal order No. A/1680-1681/WZB/AHD/2011 dated 26.09.2011. After passing of the said decision by the tribunal after almost one year, appellant filed refund claim for the amount of duty interest penalty paid during investigation of demand case. The refund was rejected on the ground of time bar by the adjudicating authority vide Order-In-Original 10/CE/Ref/13-14 dated 09.07.2013. Being aggrieved by the said order appellant filed appeal before the Commissioner (Appeals) who vide impugned order dated 27.02.2014 allowed the refund of penalty on the ground that the refund of penalty is not governed by section 11B. However, rejected the appeal for the refund of duty and interest paid by the appellant being hit by limitation of time. Thereafter the appellant filed an appeal before this tribunal, this tribunal vide order dated 13.10.2017 dismissed the appeal by passing ex-parte order. Being aggrieved by the said order appellant filed an application for restoration of appeal. The said application was also dismissed vide order No. M/10366/2018 dated 04.05.2018. The appellant challenged both the orders i.e. Final order dated 13.10.2017 and Miscellaneous order dated 04.05.2018 before the Hon'ble Gujarat High Court on the ground that principle of natural justice was not followed in passing the ex-parte order and also for non consideration of application for restoration of appeal. The Hon'ble Gujarat High Court vide judgment dated 09.03.2021 restored this appeal to the file of this tribunal. Therefore, the present proceeding.

2. Shri V.B. Sheth, Learned counsel for the appellant submits that the payment made by the appellant during investigation is not a duty but the same needs to be treated as pre-deposit in terms of the Section 35F. He invited my attention to the stay order in the demand case bearing No. S/364-365/WBZ/AHD/2011 dated 18.03.11 and argued that this tribunal considering the amount of deposit i.e. the entire amount of duty along with interest and 25% penalty waived the condition of pre deposit of balance amount of penalty. Therefore, as per the stay order the amount deposited is pre-deposit under section 35F. In such case refund of any deposit under section 35F is not governed by the provision of section 11B. Accordingly, the limitation of time provided in section 11B is not applicable. He submits that in case of refund of pre-deposit even no formal application is required, merely a letter informing about the appeal being allowed the department must refund the amount. He placed reliance on the board circulars and the judgments as under:

• CBEC Circular No. 275/37/2K-CX-8A dated 02.01.2002

• CBEC Circular No. 984/8/2014-CX :   dated 16.09.2014

• Nelco Limited reported in  : 2002-144-ELT-56 (Bom) confirmed by SC reported in 2002-144-ELT-A104 (SC)

• Eveready Industries India Ltd. reported in   : 2017-357-ELT-11 (ALL)

• KVR Construction reported in  012-26-STR-1952(Kar) confirmed by SC 22018-14-GSTL-J70 (SC)

• Mahalaxmi Exports reported in   : 2010-258-ELT-217 (Guj. H.C)

• Pricol Ltd. Reported in  : 2015-320-ELT-703 (Mad)

• Krishi Upaj Mandi Samiti reported in  : 2020-43-GSTL-204 (Tri-Del)

• Bharat Foam Udyog (P) Ltd. reported in   2002-142-ELT-546 (P&H)

3. Shri Vinod Lukose, Learned Superintendent, (Authorized Representative) appearing on behalf of the revenue reiterates the finding of the impugned order. He submits that the appellant has paid the entire duty, interest and 25% penalty to avail the benefit of waiver of 75% penalty. Therefore, it cannot be said that the amount paid by the appellant is not a duty but a pre-deposit. He submits that the pre-deposit is the amount which is directed by the tribunal in terms of 35F for granting stay which is not the case here. He also submits that the tribunal in the stay order clearly recorded that the appellant have already deposited the entire amount of duty along with interest and 25 % penalty and for this reason the condition of pre deposit of balance amount of penalty, was dispensed with. He submits that since the amount deposited is duty, interest and penalty for the purpose of refund of said amount Section 11B is clearly applicable including limitation of time. Since the appellant has filed the refund claim after the time limit prescribed under Section 11B, the same was righty rejected as time barred. He Placed reliance on the following judgments:

• Citizen Metalloys Ltd. [R/SCA No. 19261/18]

• Ajni Interiors [SCA No. 10453 of 2018]

• Ajni Interiors [SLP (Civil) Diary No(S). 3952/2020]

• Evershine Marbles & Exporters P. Ltd. [2009 (245) ELT 398 (Tri-Del)]

• Hindustan Petroleum Corporation Ltd. [2015 (317) ELT (Tri-Mum)]

• India Medtronic Pvt. Ltd. [Order No. A/12615/2018]

• M/s. Petronet LNG Limited [A/11614/2018]

• M/s. Vts Directorate [A/10438/2018]

4. I have carefully considered the submission made by both the sides and perused the records. I find that the learned counsel appearing on behalf of the appellant has mainly argued that since this amount was paid before filing of appeal the same should be treated as pre-deposit in terms of section 35F. Therefore, the refund of said amount will not be governed by the provision of Section 11B. He placed reliance on those judgments wherein deposit was provided as pre-deposit under section 35F. I find that the appellant has very consciously paid the amount of duty under the head of Excise Duty, interest and penalty also under the respective account head and the department has not compelled appellant to make the said payment. The appellant could have availed the waiver of the Pre-deposit without paying any amount but they have chosen to make payment of excise duty, interest and penalty. The tribunal while disposing the stay application also passed the order no S/364-365/WZB/AHD/2011 dated 18.03.2011 which is scanned below:

4.1. From the above order it is clear that the tribunal has recorded that deposit made by the appellant is an amount of duty, interest and 25% Penalty. In view of the above facts, it is clear that the amount paid by the appellant is indeed Excise duty, interest and penalty. Therefore, the refund of the same is clearly governed by the proviso of Section 11B of the Central Excise Act, 1944. The present refund claim is arising of consequential to the dropping of demand by the tribunal. In section 11B as per the relevant sub clause (ec) of clause (B) which is reproduced below:

"(ec) 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, order or direction;"

4.2. From the above sub clause it is clear that the amount which is paid prior to or after the adjudication of demand case will become refundable only after any order decree in court or tribunal. In section 11B, as regard relevant date in the case of the refund of any amount paid, the relevant date is from the date of the order by which such demand is dropped. In the present case one year period is applicable from the dropping of demand by this tribunal in the demand case. The appellant has admittedly filed the refund after one year from the passing of the tribunal order whereby demand was set aside. Therefore, in terms of the sub clause (ec) of clause (B) of section 11B, the refund claim filed after one year from the relevant date is clearly time bar.

4.3. I further observed that it is evident from the record that the appellant during the course of investigation deposited the amount of duty, interest and 25% penalty on 10.02.2006 in order to avail the benefit of Section 11A(2B) of Central Excise Act, 1944 which is reproduced below:

[(2B) Where any duty or excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person, chargeable with the duty, may pay the amount of duty [on the basis of his own ascertainment of such duty or on the basis of duty ascertained by a Central Excise Officer] before service of notice on him under sub-section (1) in respect of the duty, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid: Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of "one year" referred to in sub-section (1) shall be counted from the date of receipt of such information of payment.

Explanation 1.--Nothing contained in this sub-section shall apply in a case where the duty was not levied or was not paid or was short-levied or was short-paid or was erroneously refunded by reason of fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made there under with intent to evade payment of duty.

[Explanation 2. --For the removal of doubts, it is hereby declared that the interest under section 11AB shall be payable on the amount paid by the person under this sub-section and also on the amount of short-payment of duty, if any, as may be determined by the Central Excise Officer, but for this sub-section.]

[Explanation 3.--For the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made there under shall be imposed in respect of payment of duty under this sub-section and interest thereon.]

4.4. From the above section it is clear that if any assessee pay duty, interest and 25% penalty no notice needs to be issued and this benefit was explicitly availed by the appellant as they have made the submission before the Adjudicating Authority in the submission dated 26.12.2019 and 20.07.2010 which was recorded in the Order-In-Original No. 11/ADC (SC)/2010 dated 02.08.2010. Since appellant have availed this benefit it is clear that the appellant has consciously paid the duty, interest and 25% penalty. Hence it cannot be said that the amount paid is not duty and Pre-deposit.

5. As regard judgment and circular relied upon by the learned counsel for the appellant, I find that in all those judgments it was decided on the facts that the amount deposit is the pre-deposit whereas as per facts of the present case as discussed above the amount was consciously paid as a duty and the same was endorsed by this tribunal while granting the stay. Therefore, the judgment and circulars are distinguished.

6. In view of my above observation and findings based on the facts of the present case this is a case of refund of duty and interest and the same is governed by Section 11B. Hence, being time bar not admissible to the appellant.

7. Accordingly, impugned order is upheld and appeal is dismissed.