1985 (2) TMI 281 - AT - Central Excise

Summary

Issues:
1. Refund claim rejected on the grounds of limitation under Rule 11 of the Central Excise Rules, 1944.
2. Interpretation of the retrospective effect of the order of exemption issued by the Central Board of Excise & Customs.
3. Consideration of the time limit for claiming refund based on the date of knowledge.
4. Discrepancy between the Collector's view on retrospective effect and the appellant's argument regarding the order of exemption.
5. Analysis of the Tribunal's authority in granting relief based on the circumstances of the case.

Analysis:
1. The appeal involved a refund claim of duty paid on universal milling machines. The claim was rejected by the Asstt. Collector and later by the Collector of Central Excise (Appeals) citing limitation under Rule 11 of the Central Excise Rules, 1944. The duty was paid between 25-5-1978 and 8-11-1978, while the application for refund was dated 26-6-1979.

2. The Collector of Central Excise (Appeals) held that the Central Board of Excise & Customs did not have the power to issue a special order with retrospective effect under Section 8(2) of the Central Excise Rules. However, the Tribunal disagreed with this view, emphasizing the significance of the order of exemption issued by the Government of India on 17-1-1979, which was after the duty payment period. The Tribunal highlighted that the Government's knowledge of the duty payment and subsequent issuance of the exemption order should be considered.

3. The appellant argued that their knowledge of the exemption order was delayed, and thus, the limitation for claiming the refund should be based on the date of knowledge. They referred to Circular No. 4261/78-79 dated 8-3-79, which informed them about the exemption order. The appellant urged for the condonation of any delay in claiming the refund based on the delayed intimation.

4. The discrepancy between the Collector's stance on the retrospective effect of the exemption order and the appellant's argument was addressed. The appellant contended that the order of exemption should be considered effective from the date of knowledge, and principles similar to Section 9 of the Limitation Act should apply. The Tribunal considered these arguments in conjunction with the nature of the special order issued under Rule 8(2) of the Central Excise Rules.

5. The Tribunal, after considering arguments from both sides, emphasized the importance of the Government's order of exemption and its implications on the refund claim. The Tribunal referenced a similar situation under the Customs Act, 1962, where a specific exemption was given retrospective effect. The Tribunal concluded that the Government's order should be viewed as granting an absolute right to the appellant for claiming the duty paid prior to the order's issuance. Consequently, the appeal was allowed, and relief was granted to the appellant based on the circumstances and interpretation of the order of exemption.