1984 (10) TMI 217 - AT - Central Excise

Summary

Issues:
- Rejection of refund claim by lower authorities
- Applicability of Rule 11 on the refund claim
- Interpretation of the saving clause in Notification No. 146/77-C.E.
- Authority for granting refunds after the deletion of Rule 96 J

Analysis:
The appellants were aggrieved by the rejection of their refund claim amounting to Rs. 3401.60 by both the lower authorities. The case revolved around the application of the compounded levy scheme under Central Excise Rules, 1944, for unprocessed cotton fabrics produced by a powerloom unit. The appellants paid the levy for a year in advance, but due to a subsequent full exemption from duty on their goods, they sought a proportionate refund for the period post-exemption. The Assistant Collector rejected the claim citing the absence of an authority for refunds after the deletion of Rule 96 J and the saving clause in Notification No. 146/77-C.E. The Appellate Collector upheld this decision, mistakenly assuming the claim was time-barred under Rule 11.

Upon review, the Appellate Tribunal found the Appellate Collector's time-bar assessment erroneous. The claim was lodged within six months of duty exemption, making Rule 11 inapplicable. The Tribunal determined that since the duty itself was withdrawn by the Government, the advance payment made by the appellants was akin to a deposit and not subject to Rule 11 restrictions on duty refunds. The Tribunal emphasized that the saving clause in Notification No. 146/77-C.E. did not preclude refunds for deposits made post-exemption. Refunds for deposits did not necessitate a specific rule under the Central Excise Rules, and the saving clause did not impede the appellants' right to a refund that accrued upon duty withdrawal. The Tribunal concluded that the Department lacked the authority to retain the advance payment for the duty-free period and allowed the appeal, granting relief to the appellants.