1985 (1) TMI 314 - AT - Central Excise

Summary

Issues Involved:
1. Whether the revised claim for refund was time-barred.
2. Whether the Assistant Collector was functus officio and could not revise his earlier order.
3. Whether the revised claim could be considered a valid claim under Rule 11 of the Central Excise Rules.
4. Whether the interpretation of Notification No. 146/74 was correctly applied.

Issue-wise Detailed Analysis:

1. Whether the revised claim for refund was time-barred:

The appellants argued that the time limit for filing a refund claim was one year under Rule 173J, not three months as assumed by the Appellate Collector. The sugar in question was cleared from October 1975 onwards, and the revised claim was submitted on 28-3-1976 and received on 3-4-1976, thus within the one-year limit. The Tribunal agreed that the claim was within the time limit specified under Rule 11 read with Rule 173J, subject to verification of the date from which the clearance of excess production started.

2. Whether the Assistant Collector was functus officio and could not revise his earlier order:

The Appellate Collector had held that the Assistant Collector became functus officio after passing his initial order and could not reconsider or revise it. The appellants contended that the first letter dated 19-6-1975 was merely a determination of eligibility and not a refund claim, as no excess duty had been paid at that time. The Tribunal found that the revised claim did not involve a review of the first order since the specific issue of the interpretation of Notification No. 146/74 had not been considered or decided in the first order. Therefore, the Assistant Collector was not revising his earlier order but considering a new claim based on a different interpretation.

3. Whether the revised claim could be considered a valid claim under Rule 11 of the Central Excise Rules:

The appellants argued that the revised claim met the requirements of Rule 11, which allowed for a refund of duty paid through inadvertence, error, or misconstruction. The Tribunal found substance in this argument, noting that the claim was made within the one-year limit and related to duty paid through misconstruction of the notification. The Tribunal held that the revised claim was valid under Rule 11.

4. Whether the interpretation of Notification No. 146/74 was correctly applied:

The appellants' revised claim was based on the interpretation that the rebate should be calculated with reference to percentages of excess production, not average production. This interpretation had been upheld by various High Courts and the Supreme Court and accepted by the Tribunal in previous cases. The Tribunal agreed with this interpretation and held that the appellants were entitled to the refund claimed based on this interpretation.

Conclusion:

The Tribunal concluded that the appellants' revised claim dated 28-3-1976 was a valid claim for refund under Rule 11 and was within the time limit. The Assistant Collector was not functus officio and could consider the revised claim without revising his earlier order. The interpretation of Notification No. 146/74 as applied by the appellants was correct. The Tribunal allowed the appeal and directed that the refund due to the appellants be worked out and sanctioned by the Assistant Collector, subject to verification of the dates of excess production clearance.