1984 (6) TMI 258 - AT - Central Excise

Issues:
1. Whether the order of the Appellate Collector of Central Excise, Madras, dated 8-10-1982, should be set aside.
2. Whether there was suppression of facts justifying the extended time limit under Rule 10/Section 11 A.
3. Whether the scheme of grant of incentive for excess production allows for recovery of over-payment through Rule 10.
4. Whether the advance credit given to the respondent was recoverable by the Department.
5. Whether the amount demanded by the Assistant Collector should be paid by the respondents within 30 days.

Analysis:
1. The appeal was against the order of the Appellate Collector, who allowed the appeal of the respondent based on the bar of limitation due to the time elapsed since the clearances related to the period May to September 1978. The Collector of Central Excise, Madras, appealed against this decision, arguing that the excess payment of rebate was not justified. The Tribunal found that the Appellate Collector's order was incorrect and restored the order of the Assistant Collector, directing the respondents to pay the demanded amount within 30 days.

2. The appellant contended that the respondent suppressed facts by not disclosing the authorization of incentive rebate in excess of the actual excise duty paid, justifying the application of the extended time limit under Rule 10/Section 11 A. However, the Tribunal found that the incentive scheme provided an advance credit to the factory, which was an administrative function, not subject to the statutory functions under the Central Excise Act. Therefore, the question of time limit under Rule 10 was deemed irrelevant, and the order of the Appellate Collector was set aside.

3. The scheme of grant of incentive for excess production was explained, emphasizing that the advance credited to the factory was utilized for excise duty payments, not necessarily on the sugar entitled to the concession. The Tribunal concluded that the over-payment of the advance credit could be adjusted by executive action, and recourse to Rule 10 was unnecessary in this case.

4. The respondent's advocate argued that the recovery of the over-payment should be through the provisions of the Act and Rules, specifically Rule 10. However, the Tribunal held that the advance credit given to the respondent was recoverable by the Department as it was an administrative credit, not subject to the statutory functions of the Act. Therefore, the order of the Appellate Collector was not maintainable in law.

5. The Tribunal directed the respondents to pay the demanded amount within 30 days, emphasizing that the advance credit given to the factory was recoverable by the Department, and the time limit under Rule 10 was not applicable in this administrative function scenario. The provisions of Section 11 regarding recovery of sums payable to the Central Government were briefly discussed but deemed not applicable in this case.

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