1983 (10) TMI 252 - AT - Central Excise

Summary

Issues:
1. Whether rejection of part of appellants' claim for refund as barred by limitation is correct.

Analysis:
The judgment in question involves the issue of whether the rejection of part of the appellants' claim for refund relating to a specific period was justified due to being time-barred. The appellants, engaged in the manufacture of Die-cast rotors, had initially classified the goods under a specific item and paid the duty accordingly. However, a subsequent trade notice clarified that the goods did not fall under the same category. The appellants then applied for a refund of the duty paid during a certain period. The Assistant Collector granted a refund for a specific timeframe but rejected the part of the claim for an earlier period as inadmissible. The Appellate Collector upheld this decision, leading to the present appeal.

The appellants argued that all money collected based on the initial interpretation was illegal and should be refunded in its entirety. They contended that the Limitation Act should not apply as the Excise Act provides its own limitation rules. Additionally, they referenced a Supreme Court judgment stating that amounts collected by the government under a mistake of law must be refunded within three years of the discovery of the mistake. However, they failed to provide the actual citation of the ruling to support their claim.

The Tribunal noted that the appellants did not submit the Supreme Court judgment they referred to but only a news item mentioning a ruling related to a different case. The Tribunal also clarified that the reference to Article 96 of the Limitation Act was not applicable in this context. The Tribunal refrained from deciding on the applicability of the Limitation Act to the claim but analyzed the appellants' argument regarding the discovery of the mistake of law. It was observed that the appellants were aware of the correct legal position before the trade notice was issued, undermining their claim that the mistake was discovered only then. The Tribunal emphasized that to benefit from the relevant section of the Limitation Act, it must be shown that the mistake could not have been discovered with reasonable diligence, which the appellants failed to demonstrate.

Ultimately, the Tribunal found no grounds to interfere with the lower authorities' decisions. It concluded that the rejection of the part of the claim for refund based on limitation was justified, given the appellants' prior knowledge of the correct legal position. As a result, the appeal was dismissed.