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CX - Word 'may' in Clause 2(b) of notf. 5/2006-CX(NT) is by way of giving an option - it does not put any embargo debarring assessee for making a quarterly/half - yearly/annually refund claim: CESTAT

By TIOL News Service

MUMBAI, JAN 02, 2018: THE appellant is a 100% EOU. By an application dated 08/07/2011, the appellant filed refund claim for the two quarters by a common application for the period October 2010 to March 2011.

The refund claim was sanctioned by the Dy. Commissioner.

Aggrieved, the Revenue preferred appeal before the Commissioner (Appeals) on the ground that as per provisions 2(b) of Notification No. 5/2006-CE (NT) the assessee have not complied with the said provision inasmuch as it is laid down that where the claim is filed by EOU, the claim for such refund may be submitted for each calendar month.

The Commissioner (Appeals) allowed the appeal of the Revenue.

The assessee is before the CESTAT and submits that the word 'may' has been erroneously read as 'shall' and/or mandatory by the Commissioner (A); that the intent of the legislature is to provide a facility particularly to the EOU units, unlike the D.T.A. units who are entitled to claim quarterly refund, so that the working capital of the EOU unit does not remain blocked for a long time;that there is no condition that the claim has to be compulsorily filed monthly and/or even if filed quarterly or half yearly or annually, the claim has to be calculated on monthly basis as regards turnover, etc. It is further submitted that the issue is no longer res integra in view of the decision in Western Cans Pvt. Ltd. - 2011-TIOL-919-CESTAT-MUM wherein it is observed that mention in the notification that refund claims are to be filed on quarterly basis does not mean that they cannot be filed once in a year; that the purpose of such legislation is to avoid multiplicity of claims being filed on day to day basis or weekly or invoice-wise .

The Bench observed –

"6. …, I hold that the word "may" in Clause 2(b) of the said notification is by way of giving an option to assessee to file refund claims on monthly basis. Being an EOU by way of facilitation, it does not put any embargo debarring the assessee for making a quarterly/half yearly/annually refund claim. My finding is also supported by the ruling of a Division Bench of this Tribunal in Western Can Pvt. Ltd. (supra)…"

The impugned order was set aside and the appeal was allowed with consequential relief.

(See 2018-TIOL-27-CESTAT-MUM)


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