1987 (2) TMI 180 - AT - Central Excise

Summary

Issues: Appeal against order allowing refund claim under compounded levy scheme rejected by Assistant Collector based on Rule 11 of Central Excise Rules, 1944 - Department's contention on limitation under Rule 11 and applicability of general Law of Limitation - Respondents' argument on refund nature and Rule 92B provisions - Collector (Appeals) decision based on nature of refund and limitation.

In this case, the department filed an appeal against the order passed by the Collector (Appeals) Central Excise, New Delhi, allowing a refund claim under the compounded levy scheme. The claim for refund of an advance deposit was rejected by the Assistant Collector citing Rule 11 of Central Excise Rules, 1944 due to being filed after 6 months. The respondents argued that the claim was for a return of deposit, not duty paid, and thus, Rule 11's limitation did not apply to them. The Collector (Appeals) allowed the appeal on the grounds that the refund sought was from an advance deposit under the compounded levy scheme, not duty paid, and that Rule 11's limitation was not applicable, suggesting the general Law of Limitation applied.

The department, represented by Shri Rakesh Bhatia, SDR, contended that the claim was time-barred under Rule 11 due to being filed after one and a half years. They argued that the departmental authorities must act within the statutory framework and that the Collector (Appeals) erred in applying the general Law of Limitation to the refund claim. Citing cases like M/s. Afro Asian Association and Incheck-Tyre, the department emphasized the statutory limitations.

On the other hand, Shri Gopal Prasad, the consultant for the respondents, acknowledged the settled position that departmental authorities are bound by statutory provisions. However, he argued that the refund claim was for an advance deposit under the compounded levy scheme, not duty paid, referencing Rule 92B which allows for adjustment or refund of such deposits. He highlighted the Tribunal's decision in Niranjan Battery, stating that such deposits are provisional payments, making Rule 11 inapplicable.

Upon careful consideration of the case and submissions, the judgment rejected the Collector (Appeals) decision on the general Law of Limitation, citing Supreme Court precedents. However, regarding the nature of the refund and Rule 11's applicability, it was noted that Rule 92B provides for advance deposit adjustment and refund without a prescribed time limit. As the pre-deposit is provisional and meant for adjustment against actual liability, Rule 11 was deemed inapplicable. The decision was upheld based on the nature of the refund and the provisions of Rule 92B, ultimately rejecting the appeal.