CENVAT Refund for Deemed Exports Barred by Limitation Under Central Excise Act: Bombay High Court

The Bombay High Court (Nagpur Bench) has held that a refund claim of unutilised CENVAT credit arising from deemed exports is subject to the limitation period prescribed under Section 11B of the Central Excise Act, 1944, and that such limitation begins from the last day of the quarter for which the refund is claimed. Dismissing the appeal, the bench of Justice Anil L. Pansare and Justice Nivedita P. Mehta upheld the view that a delayed claim filed beyond one year from the relevant date is time-barred and cannot be entertained. The dispute related to a 100% Export Oriented Unit (EOU) which had supplied goods to another 100% EOU during the period from October 2009 to September 2010. The assessee filed a consolidated refund application on 17 March 2011 under Rule 5 of the CENVAT Credit Rules, 2004, seeking refund of unutilised credit for multiple quarters. While the refund claims pertaining to later quarters were sanctioned, the claim for the quarter October to December 2009 was rejected on the ground that it had been filed beyond the prescribed limitation period. The departmental authorities relied on Section 11B of the Central Excise Act, which mandates that any refund claim must be filed within one year from the “relevant date”. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), following the Larger Bench decision in Span Infotech (India) Pvt. Ltd., held that where refund is claimed on a quarterly basis, the relevant date for computing limitation would be the last day of the quarter to which the refund pertains. Since the quarter ended on 31 December 2009, the limitation period expired on 31 December 2010, making the refund application filed in March 2011 time-barred. Before the High Court, the appellant argued that supplies between EOUs did not fall under any of the specific categories defining “relevant date” under Section 11B. It was contended that in the absence of a specific statutory prescription, the concept of “reasonable time” should apply, and that the refund application filed in March 2011 ought to be treated as having been made within a reasonable period. Reliance was placed on judicial precedents to support the argument that limitation should not be strictly enforced in such circumstances. The High Court rejected these submissions, observing that the refund mechanism under Rule 5 of the CENVAT Credit Rules operated in conjunction with notifications issued by the Central Government, which expressly required refund claims to be filed within the time limit stipulated under Section 11B. The Court noted that the assessee had the option to file refund claims on a monthly basis and, in any case, within one year from the relevant date. It held that once a statutory limitation is clearly prescribed, courts cannot dilute or ignore it by importing the concept of reasonable time. The Bench further observed that a period of one year provided under Section 11B itself constitutes a reasonable time. Since the relevant date for the quarter October to December 2009 was 31 December 2009, the refund claim ought to have been filed on or before 31 December 2010. Filing the application in March 2011 was therefore clearly beyond the permissible period. Concluding that the CESTAT had correctly applied the law, the High Court answered the substantial question of law in favour of the revenue and dismissed the appeal. The ruling reinforces that refund claims of unutilised CENVAT credit relating to deemed exports are strictly governed by the limitation provisions of Section 11B and that the last day of the relevant quarter is the decisive date for computing limitation. Case Details Case Title: Inventys Research Co. Pvt. Ltd. Versus The Commissioner of Central Tax Case No.: CENTRAL EXCISE APPEAL NO.1/2024 Date: 23.01.2026 Counsel For Petitioner: Y. Patki Counsel For Respondent: S N. Bhattad Click Here To Read Order Read More: DGFT Imposes 1 Year Import Restrictions on Penicillins, Amoxycillin and 6-APA Below Minimum Import Price

CENVAT Refund for Deemed Exports Barred by Limitation Under Central Excise Act: Bombay High Court

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