1987 (9) TMI 167 - AT - Central Excise

Summary

Issues:
Refund claim under Item 1B Central Excise Tariff, period of limitation for refund claims, applicability of Limitation Act, departure from earlier decisions of the Tribunal, authority of High Court judgments, prerogative powers of High Courts in refund claims, application of limitation period by departmental authorities, Supreme Court decisions on limitation periods, decision of the Delhi High Court on limitation period for refund claims.

Analysis:
The case involves a refund claim by M/s. Milkfood Limited for duty paid under Item 1B Central Excise Tariff from 1-8-1974 to 8-4-1977. The Assistant Collector rejected the refund claim as time-barred, which was upheld by the Collector (Appeals), leading to the current appeal.

The Tribunal had previously held that the period of limitation prescribed in the Customs Act must be applied to refund claims, and parties cannot rely on the Limitation Act for claims arising from duty payment mistakes. The appellant sought a reconsideration, citing High Court decisions that money collected without legal authority should be refunded without reference to statutory limitation periods.

The appellant argued that the Tribunal could depart from its earlier decisions, citing a Calcutta High Court judgment that the Tribunal is not bound by res judicata. However, the Tribunal noted that High Court judgments allowing refunds without statutory limitation periods were based on Article 226 powers, not applicable to authorities under the Acts.

The Department contended that departmental authorities, including the Tribunal, must adhere to statutory provisions and cannot ignore limitation periods. The Tribunal referenced a previous decision where a 3-year limitation period was upheld, contrary to the appellant's arguments.

The Tribunal also considered a Supreme Court case where a refund claim under the Customs Act was rejected due to exceeding the limitation period. They highlighted that courts, except when exercising prerogative powers, apply statutory limitation periods to orders by authorities under the Acts.

Referring to a Delhi High Court decision, the Tribunal emphasized that authorities must act in accordance with the law governing them, and refund claims must adhere to the limitation periods specified in the Acts.

Ultimately, the Tribunal held that refund claims under the Central Excises and Salt Act must be processed with reference to the Act's limitation period, not the Limitation Act. Therefore, the lower authorities were correct in rejecting the refund claim as time-barred, leading to the dismissal of the appeal.