1986 (1) TMI 227 - AT - Central Excise

Summary

Issues:
1. Appeal against order vacating directions to make good a sum of money for wrongly availing concession under Notification No. 251/82.
2. Failure to file an appeal against denial of concession in classification list.
3. Applicability of bar of limitation under Section 11A of the Central Excises and Salt Act, 1944 to R.T. 12 assessment proceedings.

Detailed Analysis:
1. The appeal was filed by the Collector Central Excise, Bangalore, against the order of the Collector of Central Excise (Appeals), Madras, vacating the directions given to the respondents to rectify an amount of Rs. 16,902.07 for wrongly availing the concession under Notification No. 251/82. The respondents, cotton processors, had their classification list approved but were denied the benefit of the concession under the said notification. The Superintendent directed the respondents to rectify the wrongly availed credit, which was challenged by the respondents in the appeal to the Collector (Appeals) who vacated the directions. The issue was whether the respondents could avail the concession without approval and whether the bar of limitation applied to the proceedings.

2. The S.D.R. argued that since the respondents' classification list was not entirely approved and they were denied the concessional benefit, they should have appealed against the denial instead of questioning it during the finalization of their R.T. 12 return. The S.D.R. contended that the Collector (Appeals) erred in finding that clearances were made as per the approved list and that the bar of limitation under Section 11A did not apply to R.T. 12 proceedings.

3. The counsel for the respondents argued that despite not appealing the denial of concession in the classification list, the Department should have issued a show cause notice before asking the respondents to rectify the amount. It was contended that the bar of limitation under Section 11A applied to the R.T. 12 assessment proceedings. The respondents' failure to appeal did not absolve the Department from independently notifying them before demanding the amount.

4. The judgment highlighted that the respondents' claim for the concession under Notification No. 251/82 was not approved in their classification list. As aggrieved parties, the respondents should have appealed against the denial. The R.T. 12 finalization required compliance with approved lists, and since the concession was not approved, the respondents could not avail themselves of it. The judgment emphasized that the bar of limitation under Section 11A was not relevant in this case. The Collector (Appeals) was found to have made an error in assuming the approval of the classification list, leading to the appeal's allowance. The respondents were given the liberty to seek other remedies if available under the law.