2002 (1) TMI 359 - AT - Central Excise

Issues Involved:
1. Computation of time limit for refund claims under Section 11B of the Central Excise Act, 1944.
2. Treatment of original payment of duty as provisional.
3. Applicability of Section 11B(5)(B)(ea) of the Central Excise Act, 1944.
4. Harmonious interpretation of provisions relating to classification of levy sugar and correct payment of duty.

Detailed Analysis:

1. Computation of Time Limit for Refund Claims:
The appellants argued that the lower authorities incorrectly calculated the time limit for refund claims by considering the date of original duty payment as the 'relevant date.' They contended that the time limit should be computed from the date of the State Government's order to release the sugar as levy sugar. The Commissioner (Appeals) rejected this plea, stating that the release orders had no relevance as exemption orders already existed in the form of Government Notifications. The appellants relied on past Tribunal and Supreme Court decisions to support their claim that levy sugar should be assessed at the rate applicable to it and not at the rates for non-levy sugar.

2. Treatment of Original Payment of Duty as Provisional:
The appellants alternatively submitted that the original assessment and payment of duty should be treated as provisional, and upon the release of the sugar as levy sugar, the consignments should be reclassified, and the correct duty assessed. The Counsel for the appellants emphasized that the scheme of the Central Excise Law mandates that goods sold at statutorily fixed prices should be assessed based on those prices. The learned SDR countered that the original payment of duty was not in terms of Rule 9B of the Central Excise Rules, which relates to provisional assessment, and thus could not be treated as provisional.

3. Applicability of Section 11B(5)(B)(ea):
Section 11B(5)(B)(ea) relates to exemptions from payment of duty by a special order issued under sub-section (2) of Section 5(A). The appellants argued that the release order by the State Government should be treated as a special order. However, the Tribunal held that this provision does not apply to the present case, as the assessment of levy sugar was claimed under existing exemption notifications and not a special order under Section 5A(2) of the Central Excise Act.

4. Harmonious Interpretation of Provisions:
The Tribunal found merit in the appellants' submission that the original payment of duty should be treated as provisional. This would render Section 11B irrelevant for determining the refund of excess duty. The Tribunal noted that the classification and rate of duty on sugar depend on whether it is levy sugar or not, as per the Central Excise Tariff. The Tribunal emphasized that the original payment of duty could only be treated as provisional due to the statutory orders under the Essential Commodities Act, which are binding and determine the real character of the sugar. The Tribunal ordered that the original payment of duty be treated as provisional, assessments finalized based on the classification applicable to levy sugar, and the excess duty refunded.

Conclusion:
The appeal was allowed, with the Tribunal directing that the original payment of duty be treated as provisional and the assessments finalized accordingly, with consequential relief to the appellant. The Tribunal's decision aligned with the Supreme Court's principles of statutory interpretation, ensuring that each provision of the statute is given effect and harmoniously construed to achieve the enactment's objective.

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