By TIOL News Service

MUMBAI, AUG 23, 2016: THE appellant filed a refund claim on 01/12/2005 for the period January 2004 to December 2004. On 23/01/2006 a show-cause notice was issued seeking to deny the refund claim on the ground of unjust enrichment. Another SCN in respect of the same refund claim was issued on 29/10/2007 seeking to deny the same on the ground of limitation.

Both the notices were heard together and the refund claim was rejected on the ground of limitation.

As the lower appellate authority upheld this order, the appellant is before the CESTAT.

It is inter alia submitted that -

++ Two SCNs cannot be issued for the same refund claim.

++ The original SCN did not invoke the limitation and, therefore, it is not open to the Revenue to invoke the said ground by issue of another SCN.

++ Moreover, the second SCN has been issued after one year of filing of the refund claim and therefore, the same is barred by limitation.

The AR submitted that there is no need to issue a SCN for refund and there is no time limit prescribed u/s 11B for the same; that the SCN was issued to assist the appellant in defending his refund claim. Reliance is placed on the decision of the Bombay High Court in the case of ONGC - 2013-TIOL-809-HC-MUM-CX wherein it is held -

…that while adjudicating upon refund claims, it is necessary in the interest of justice for the assessing officers as well as the first appellate authorities to dispose of all the objections. Otherwise, where the assessing officer or as the case may be the first appellate authority deals with only one or more of the objections without dealing with the claim in its entirety, proceedings remain pending for several years thereafter before the Central Excise and Service Tax Appellate Tribunal. This results in orders of remand in consequence of the failure of the assessing officer or the first appellate authority, as the case may be, to deal with all the aspects of the matter. This prolongs litigation, with several rounds of appeal and remand, which is best avoided both in the interest of the assessee and the revenue. Certainty promotes the rule of law.

While distinguishing the case laws cited by the appellant, the CESTAT observed -

"4. …I find that the decision of Vidarbha Veneer Industries Ltd. (supra) is not applicable to the instant case as the duty has not been collected illegally. It is in fact a case of voluntary payment of duty. It was open to the appellant to opt for provisional assessment if he was unable to determine the assessable value at the time of clearances from the factory. If he has not opted for the same, the only recourse open to him is to file a refund claim under Section 11B. The show-cause notice issued under Section 11B are in the nature of communication of the objection. In fact there is no time limit prescribed for issue of show-cause notice under Section 11B and thus it is open to Revenue to point out the shortcomings in the refund claim. The Hon'ble High Court of Bombay in the case of ONGC has also observed that all the objections should be sorted out before finalizing the refund claim. In these circumstances, I do not find any reason to interfere with the impugned order…."

The appeal was dismissed.

(See 2016-TIOL-2156-CESTAT-MUM)