1983 (7) TMI 329 - AT - Central Excise

Summary

Issues:
1. Appeal under Section 35B of the Central Excises and Salt Act, 1944 for refund of duty collected.
2. Transfer of revision application to the Tribunal under Section 35P of the Act.
3. Confirmation of demand under Rule 10A of the Central Excise Rules, 1944.
4. Application of Rule 56A and Rule 51A in the case.
5. Validity of demand and limitation period under Rule 56A(5).

Analysis:
The appeal before the Appellate Tribunal CEGAT MADRAS involved a demand for payment of duty under Rule 10A of the Central Excise Rules, 1944, amounting to &8377; 21,696.27, made on the appellants. The demand arose from a situation where Aluminium ingots were cleared but not taken delivery of by the consignee, leading to confusion regarding the applicable rules for such transactions. The Assistant Collector confirmed the demand, which was challenged through various legal arguments by the appellants' advocate, including questioning the application of Rule 56A to the case and the validity of Rule 10A. However, the Tribunal decided to dispose of the appeal on a different legal issue.

The Tribunal noted that the demand, though made under Rule 10A, should have been considered under Rule 56A(5) due to the circumstances of the case. It was highlighted that as per Rule 56A(5), if proforma credit has been availed of due to error or inadvertence, a notice should be served on the assessee within six months from the date of such credit. In this case, the notice was not served within the stipulated period of six months. The Tribunal emphasized that there was no justification for extending the six-month period to five years based on factual data. Consequently, the Tribunal found that the demand was barred by limitation under Rule 56A(5) and allowed the appeal, setting aside the order of the Assistant Collector confirming the demand. The Tribunal directed that if the demand had been paid, it should be refunded to the appellants.