1988 (8) TMI 377 - AT - Central Excise

Summary

Issues Involved:
1. Entitlement for refund of duty paid on pre-budget stock.
2. Limitation period for refund claims.
3. Payment of duty under protest.

Detailed Analysis:

1. Entitlement for Refund of Duty Paid on Pre-Budget Stock:

The primary issue revolves around whether the goods manufactured before 1-3-1982 but removed thereafter are liable for duty. The Assistant Collector had initially rejected the refund claim of M/s. Golden Tobacco Ltd. on the basis that the proper classification under Item 17(4) CET negated the exemption claimed under Notification No. 66/82. The Collector (Appeals) allowed the refund for goods manufactured before 1-3-1982, as they were exempt from duty at the time of manufacture, despite being removed later.

The department's appeal contended that the goods were not unconditionally exempt before 1-3-1982, as the exemption was conditional on captive use. The Tribunal, referencing the Supreme Court decision in M/s. Anchor Pressing Pvt. Ltd., held that legal grounds for relief could be urged even if not initially claimed. The Tribunal reiterated that pre-budget stock, wholly exempt at the time of manufacture, is not liable for duty when removed post-exemption withdrawal, citing Castrol Ltd. and Andhra Sugar Ltd. cases.

However, dissenting opinions from Members D.C. Mandal and V.P. Gulati argued that the exemption under Notification No. 118/75 was conditional and became operative only if the goods were intended for captive use. They concluded that the goods lying in stock on 28-2-1982 did not qualify for the exemption post-1-3-1982, as the conditions were not met.

2. Limitation Period for Refund Claims:

The Collector (Appeals) limited the refund to the duty paid within six months preceding the refund claim, which the assessee contested, arguing that the Assistant Collector did not reject the claim on limitation grounds. The Tribunal noted that the Collector (Appeals) had considered the matter on merits and appropriately applied the six-month limitation. The Tribunal referenced the Government of India decision in Sukhan Steel Re-rolling Mills, distinguishing it from the present case.

3. Payment of Duty Under Protest:

The assessee argued that the limitation period did not apply as the duty was paid under protest, supported by a letter dated 2-3-1982 and marked GP-1 forms. The Tribunal observed that the Collector (Appeals) did not address this aspect, necessitating further examination.

Final Judgment:

In conclusion, the Tribunal dismissed the department's appeal (Excise Appeal No. 1465 of 1986) and allowed the assessee's appeal (Excise Appeal No. 2859 of 1986), remitting the matter to the Collector (Appeals) to consider the protest payment issue. However, the majority opinion from Members D.C. Mandal and V.P. Gulati ultimately allowed the Revenue's appeal and dismissed the assessee's appeal, concluding that the goods were correctly charged to duty post-budget changes. The final order reflects the majority opinion, aligning with the views of Members D.C. Mandal and V.P. Gulati.