1984 (2) TMI 334 - AT - Central Excise

Summary

Issues:
Interpretation of exemption Notification No. 198/76-C.E. for concessional rate of duty on excess clearances of tea, whether the concession applies to the manufacturer as a whole or individual factories, time-barred refund claim under Rule 11 of the Central Excise Rules, 1944.

Analysis:
The judgment by the Appellate Tribunal CEGAT NEW DELHI involved two appellants who owned multiple tea factories and were entitled to a concessional rate of duty on excess clearances of tea under exemption Notification No. 198/76-C.E. The appellants expected to surpass their base year figures and duly informed the Department before availing the concessional rate. However, the Department later informed them that each tea factory must exceed the base year figure individually, leading to a directive to pay back the concession amount for factories with shortfalls and claim refunds for factories with excess clearances.

During the hearing, the appellants argued that the concession should apply to the manufacturer as a whole based on a previous order by the Bench. They promptly complied with the Department's directive to pay back the money and subsequently applied for refunds. The Department contended that each tea factory was a distinct entity licensed separately under the Central Excises Act.

Upon careful consideration, the Tribunal found that the exemption Notification provided the concession for goods cleared in excess of base clearances by or on behalf of a manufacturer. Therefore, the excess clearances should be considered for the manufacturer as a whole, not individual factories. The Tribunal deemed the Department's directive to pay back the concession for individual factories with shortfalls as incorrect. The appellants had availed of the concession correctly and promptly applied for refunds within the required time frame under Rule 11 of the Central Excise Rules, 1944.

The Tribunal clarified that the time limit for the refund claim should be calculated from the second payment made in compliance with the Department's directive, not from the original duty payment. Consequently, the refund claims of the two appellants were deemed not time-barred, and their appeals were allowed. The Tribunal concluded that the Department's actions lacked justification from both legal and equitable standpoints, emphasizing the correctness of the appellants' refund claims.