Claims for refund of excise duty under Section 11B must be filed within one year; reversal of CENVAT credit to obtain exemption does not constitute a mistake of law, thus refund claims beyond this limit are invalid.

PER: M.M. PARTHIBAN

This appeal has been filed by M/s Raymond Limited, Thane (herein after referred to, as ‘the appellants’, for short) assailing the Order-in- Appeal No. PUN-EXCUSS-000-APPL/2017-18 dated 23.08.2018 (referred to, as ‘the impugned order’) passed by the Commissioner (Appeals), CGST & Central Excise, Nashik.

2.1 Briefly stated, the facts of the case are that the appellants’ factory situated at E-1, MIDC, Ajanta Road, Jalgaon are registered with jurisdictional Central Excise department for manufacture of ‘textile fabrics and textile articles’ falling under Chapter Nos. 51, 55, 62 and 63 of the First Schedule to the Central Excise Tariff Act, 1985, by holding Central Excise Registration No. AAACRG4896AXM003. The appellants avail CENVAT credit of duty paid on inputs, capital goods and input services used for manufacture of final products and utilize the said credit for payment of duty on their final products.

2.2 The Central Government had introduced a completely revised Central Excise duty structure in the Union Budget 2004, wherein manmade fibres alone was subject to mandatory duty viz., 24% on polyester filament yarn (including textured yarn) and 16% on all other filament yarns and man- made fibres. Except for these duties, all Textile goods viz., yarn, fabrics, garments, articles of chapter 50 to 63 were made fully exempt, if no CENVAT credit of duties is taken under the CENVAT Credit Rules, 2002/ 2004. Further, CENVAT credit scheme for textiles was made optional. For those units/ manufacturers opting to pay Central Excise duty, and thereby avail of CENVAT duty credit, the applicable rates of duty for all other goods of chapter 50 to 63 was prescribed at 4% for pure cotton textiles including yarn, fabrics, garments, made ups and articles; and 8% for other textiles including yarn, fabrics, garments, made ups and articles. All textiles and textile articles falling under chapter 50 to 63 have been fully exempt from duties under Additional Excise Duty (Goods of Special Importance) Act and Additional Excise Duty (Textiles and Textile Articles) Act, where ever applicable.

2.3 The appellants had opted for full exemption from payment of Central Excise duty by availing Notification No.30/2004-C.E. dated 09.07.2004, since all the final products manufactured by the appellants covered under the aforesaid notification benefit. As the pre-requisite condition to avail the said notification benefit being non-availment of CENVAT credit on inputs the appellants reversed CENVAT credit taken by them, based on the clarification issued by Tax Research Unit (TRU) of the Ministry of Finance vide Circular No. 795/ 28/2004-CX., dated 28-7-2004 issued from file F. No. 345/2/2004-TRU. In the said circular it was clarified clarifying that for manufacturers who had pre-budget stock of inputs (or stock of semi- finished or finished goods which contained inputs) on which credit had already been availed, they can reverse the CENVAT credit amount and avail of full exemption from payment of Central Excise duty. Accordingly, the appellants had reversed the CENVAT credit of Rs.1,46,26,733/-.

2.4 The appellants had found that in two cases, which were relied upon by them, the Tribunal have held that amendment to Rule 11(3) ibid which was brought into effect from 01.03.2007, by way of Notification No. 10/ 2007–C.E. (N.T.) dated 01.03.2007 is prospective and not retrospective in operation. Such referred cases are (i) Commissioner of Central Excise, Nagpur Vs. Suryalaxshmi Cotton Mills 2016-TIOL-3336 and (ii) Madhu Industries Limited Vs. Commissioner of Central Excise, Ahmedabad – 2017 (2) TMI 837. Accordingly, on the basis of such orders, the appellants had filed a refund application in the prescribed form under Form-R in claiming refund of Rs.1,46,26,733/- by submitting it before the Assistant Commissioner of Jalgaon Division on 02.06.2017, stating the grounds mentioned therein, which have been held by the Tribunal in such relied upon cases.

3.1 Upon scru