1983 (11) TMI 285 - AT - Central Excise

Summary

Issues Involved:
1. Classification of goods under the Central Excise Tariff.
2. Entitlement to refund claims under Rule 11 of the Central Excise Rules, 1944.
3. Applicability of the general law of limitation for refund claims.

Summary:

1. Classification of Goods:
The primary issue was whether the products "Paragon Zinc Oxide Adhesive Plasters B.P.C." and "Elastoplast Electric Adhesive Bandages B.P.C." should be classified under Tariff Item (T.I.) 60 or T.I. 14E of the Central Excise Tariff (CET). The appellants argued that these products were medicated plasters with therapeutic properties and should not be classified as ordinary adhesive tapes under T.I. 60. They contended that these products were surgical dressings with medicinal value, supported by technical literature and the British Pharmaceutical Codex (BPC). The Tribunal found merit in the appellants' arguments, noting that zinc oxide had curative properties and that the products were manufactured to pharmacopeial specifications. The Tribunal concluded that the goods should be classified under T.I. 14E as medicated tapes, rather than under T.I. 60.

2. Entitlement to Refund Claims:
The appellants sought refunds for duty paid on the grounds that the duty was erroneously paid under T.I. 60 instead of T.I. 14E. The Assistant Collector and the Appellate Collector had rejected the refund claims, stating that the appellants had not appealed against the initial classification and that the claims were not entertainable. The Tribunal, however, held that the appellants were entitled to claim refunds under Rule 11 of the Central Excise Rules, 1944, which allowed for refunds of duty paid by mistake or error. The Tribunal directed that the appellants be granted a proportionate refund based on the reclassification under T.I. 14E.

3. Applicability of General Law of Limitation:
The appellants argued that they were entitled to a longer period of three years for claiming refunds under the general law of limitation, as the payments were made under a mistaken classification. However, the Tribunal referred to its decision in the case of Miles India Ltd., which held that the specific provisions of Rule 11, prescribing a one-year period for refund claims, would apply. Consequently, the Tribunal allowed refunds only for the period within one year preceding the dates of filing the respective claims.

Conclusion:
The Tribunal set aside the classification determined by the lower authorities and held that the goods were classifiable under T.I. 14E. The appellants were entitled to a proportionate refund for the period within one year preceding the filing of the claims, to be processed within three months from the date of the order.