Order Date – 12 January 2023

Parties: M/s Jalan Con Cast Ltd. Vs Commissioner of Central GST & Central Excise, Varanasi

Facts –

• The Appellant, M/s Jalan Con Cast Ltd., was subjected to searches by the Officers of DGCEI. During investigation, the Officers alleged non-payment/short-payment of duty and the Appellant was coerced to deposit an amount of Rs.30 Lakhs through e-challans.
• They filed a refund application for the amount so paid and the same wassanctioned, however on an appeal filed by the department the order was set aside by holding that the bar of limitation under Section 11B (1) is applicable and since the refund claim was filed after period of one year from the date of the order passed by this tribunal, the claim is barred by limitation.

Issue –

• Whether the bar of limitation under Section 11B (1) of the Act would be applicable to the refund?

Order –

• The Tribunal observed that when admittedly the Appellant is not required to pay any amount, then the Appellant was clearly entitled to refund of the amount deposited under-protest and consequently the revenue has no authority to retain such amount as it would be in violation of Article 265 of the Constitution.
• Further, the Hon’ble High Courts of Bombay, Madras, Telangana and Calcutta have similarly held that refunds of amounts paid under mistake of law would not be hit by the statutory limitation periods in the case of Parijat Construction vs. CCE, Nashik [2018 (9) G.S.T.L. 8 (Bom.)].
• Hence it was held that the statutory limitation period prescribed under Section 11B is not applicable to the refund claimed by the Appellant since the amount paid by the Appellant is not a tax. The present appeal is allowed. The Appellant shall be entitled to the refund amount along with interest.