Issues: The judgment involves the interpretation of Section 35L(b) of the Central Excises and Salt Act, 1944 regarding the recovery of an amount granted as an incentive for excess production under Notification No. 108/78. The key issues include the time limit for recovery, the authority of the Collector of Central Excise to issue a review show-cause notice, and the applicability of Section 11A of the Act in the context of excess sanction.
Summary: The respondent was granted a sum of Rs. 5,60,679.40 as an incentive for excess production under Notification No. 108/78. Subsequently, a show cause notice was issued by the Superintendent of Central Excise for the recovery of Rs. 66,306.62 granted in excess. The Assistant Collector held that the notice was time-barred due to no wilful incorrect statement or suppression of facts by the respondent.
However, the Collector of Central Excise issued a review show-cause notice against the Assistant Collector's decision, asserting that the time limit under Section 11A of the Act applies only to demands related to Central Excise duty. The respondent appealed to the Tribunal, which ruled in their favor, stating that Section 11A does not apply in this case.
The Tribunal held that when duty is levied without legal authority, the general law applies, and the limitation period starts when the mistake or error is discovered. While the department must adhere to the limitation period under the Central Excise Act for refund claims, they can pursue recovery through civil court if necessary. The Tribunal's decision was upheld, dismissing the appeal on the grounds that the department must follow the Act's provisions, and alternative remedies are available if a mistake of law is involved.
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