The Court established that refund claims are not subject to limitation when duty has been paid under protest, reaffirming that appropriations made during the pendency of appeals with stay orders are deemed as such.

JUDGMENT :

N.ANAND VENKATESH, J.

The appellant was an assessee under the provisions of the " Central Excise Act, 1944 " (for brevity hereinafter referred to as "the Act") and migrated into GST regime after the same came into force. The appellant availed CENVAT credit, in respect of excise duty paid on inputs and capital goods and service tax paid on input services under the provisions of CENVAT Credit Rules, 2004.

2. A show cause notice dated 03.06.2011 was issued proposing to deny CENVAT credit of service tax paid on input service during the period May 2010 to March 2011. The proposal was confirmed by the adjudicating authority by Order-in-Original No.4/2012 dated 30.03.2012.

3. The appellant filed an appeal before the first appellate authority challenging the denial of this CENVAT credit. The first appellate authority dismissed the appeal filed by the appellant. Aggrieved by the same, the appellant challenged the same before the Tribunal.

4. The appellant, in the meantime, had filed an application under Rule 18 of the Central Excise Rules, 2002 seeking for refund of excise duty paid on goods cleared for export. The application was processed and refund was sanctioned by order dated 06.05.2014. However, the rebate sanctioned was appropriated against the demand arising out of the Order-in-Original No.4/2012, dated 30.03.2012.

5. It is alleged that the rebate was appropriated without considering the pendency of the appeal in respect of the demand, before the appellate Tribunal. Ultimately, the appellate tribunal by order dated 10.12.2018 was pleased to set aside the demand arising out of the Order-in-Original No.4/12.

6. In the light of the above development, the appellant filed a request dated 14.08.2020 seeking for return of the rebate appropriated against the demand confirmed in Order-in-Original No. 4/2012 in the light of the order passed by the Tribunal. The request for return of rebate was rejected by an order dated 08.09.2020 on the ground that the amount of rebate appropriated cannot be returned based on a letter as it does not have the character of pre-deposit and also the request dated 14.08.2020 is barred by limitation, as the Tribunal order is dated 10.12.2018 and such claim for refund ought to have been made within a period of one year.

7. The appellant filed an appeal before the first appellate authority and the first appellate authority dismissed the appeal by order dated 15.03.2021 once again on the ground of limitation. This order was upheld by the Appellate Tribunal through the impugned proceedings dated 08.09.2021 and aggrieved by the same, the present appeal has been filed before this Court under Section 35G of the Act read with Section 83 of the Finance Act, 1994 .

8. This appeal was admitted on 08.04.2022 and the following substantial questions of law were framed:

"1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the claim for return of amount illegally appropriated, is also in the nature of refund consequent to the Order of the Tribunal and the limitation in terms of explanation (B) (ec) to Section 11B is applicable ?

2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the return of rebate appropriated during the pendency of Appeal is consequent to the order of the Tribunal and hence, the limitation as prescribed in explanation (ec) to Section 11B is applicable when the appropriation of refund pertains to a completely different proceedings?"

9. When this appeal was taken up for