1983 (8) TMI 296 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 203/C.E., dated 28-9-1972 regarding duty concession for sugar factories.
2. Validity of the demand for refund based on adjustment in the Personal Ledger Account.
3. Application of Rule 10 or Rule 10A for raising the demand for refund.
4. Time-barred nature of the show cause notice for refund.

Analysis:
The judgment by the Appellate Tribunal CEGAT New Delhi involved a dispute where a sugar factory contested a demand for refund made by excise authorities based on an adjustment in the Personal Ledger Account (PLA) relating to a duty concession notification. The Central Government had issued Notification No. 203/C.E., dated 28-9-1972, allowing relief to sugar factories for excess production during specific periods. In this case, the factory claimed a rebate for exceeding production in October and November 1972 compared to the same period in 1971. The excise authorities initially allowed the rebate but later issued a show cause notice in 1977, seeking a refund of the amount, alleging it was erroneously allowed.

The Assistant Collector upheld the demand for refund, stating that since there was no production in October and November 1971, the factory was not eligible for the duty concession under the notification. The factory's argument of the notice being time-barred was not addressed at this stage. The Appellate Collector affirmed this decision, emphasizing that the benefit of the notification applied only if there was production during the corresponding period. The factory's plea that the demand should have been raised under Rule 10 was rejected, citing Rule 10A as applicable without a time limit for refund demands.

Upon appeal to the Appellate Tribunal, the factory argued that the notice was time-barred under Rule 10, emphasizing a judgment from the Allahabad High Court supporting their interpretation of the notification. The Tribunal considered the mistake in allowing the rebate and concluded that it amounted to a refund of duty paid, thus falling under Rule 10 with a one-year time limit. As the notice was issued almost four years later, the Tribunal ruled it was time-barred, setting aside the Appellate Collector's decision based on Rule 10A. The Tribunal allowed the appeal on the grounds of the notice being barred by time, without delving into the notification's applicability.