Order date – 04 November 2022

 Facts –

• The Appellant, M/s. Ponni Sugars (Erode) Ltd. is engaged in manufacture of sugar and are registered with the Central Excise Department.
• They filed claim for refund of the payment made by them under Rule 6 of CENVAT Credit Rules, 2004 on clearance of the waste products namely bagasse and press mud which emerged during the course of manufacture of sugar.
• According to appellant on being intimated by the department that they are not eligible to avail credit on common inputs and input services in regard to bagasse and press mud, they reversed the credit as under Rule 6(3A) of CENVAT Credit Rules, 2004.
• Later,the Hon'ble Supreme Court in the case of Union of India Vs. DSCL Sugar Ltd. reported in 2015 (322) ELT 769 (SC) held that bagasse and press mud are non-excisable products and that no duty is payable on these items. Consequently, they sought for refund of the credit that has already been reversed. 
• The refund sanctioning authority rejected the refund as time-barred.
• Aggrieve appellant had filed an appeal

Issue – 

• Whether refund claim filed by the appellant dated 19.9.2014 is hit by limitation as envisaged under sec. 11B of the Central Excise Act.

Order – 

• The Tribunal observed that the appellant has reversed the credit for the period 1.4.2010 to 1.5.2013 and refund claim has also been filed for this period. The department has calculated the period of one year from the date of reversal and taken the view that the refund claim is barred by limitation.
• It can be seen from the intimation submitted that the appellant has noted that they dispute the payment or reversal of credit. The intimation given by assessee would show that they have made the payment under protest. It is also seen that, later a Show Cause Notice has been issued to the appellant demanding 5% / 6% payment in regard to the common input and input services used in the manufacture of bagasse and press mud alleging that these are byproducts. The demand raised in the Show Cause Notice was higher than the amount reversed by the appellant; but included the amount reversed. The said demand was dropped by the department.
• The Tribunal has relied upon the decision in the case of Triveni Engineering and Industries Ltd. (supra) in which it is held that bagasse and press mud not are dutiable item and not manufactured item. Since the amount is not under the head of excise duty, the refund thereof does not fall under the term of Section 11B. Accordingly, limitation provided under Section 11B shall not be applicable in the present case
• Hence it was held that the refund claim is hit by time-bar cannot sustain and requires to be set aside.