1987 (10) TMI 214 - AT - Central Excise

Issues Involved:

(a) Whether the refund sanctioned by an order passed in pursuance of the order-in-revision could be treated as erroneous refund?
(b) Whether in case of refund granted in pursuance of an order-in-revision, the time limit prescribed under Section 11B is applicable?
(c) Whether such a case is governed by sub-section (3) of Section 11B which calls for suomoto refund without waiting for a claim?
(d) Whether any mis-statement could be attributed to the appellant relating to the protest when admittedly the department had received the letter of protest?
(e) Whether in such a situation, the Asstt. Collector could invoke extended period of time under Section 11 A for recovery?
(f) Whether a time-barred claim in respect of an amount otherwise due could be recovered?
(g) Whether the demand notice dated 16-8-1984 (for recovery of the amount paid on 18.3.83) was time-barred in view of the fact that it is beyond a period of six months?

Detailed Analysis:

(a) Erroneous Refund:
The learned counsel argued that the refund sanctioned in pursuance of an Appellate Order or Order-in-Revision cannot be termed as "erroneous refund." The refund was made in compliance with the order dated 29-9-1982 passed by the Collector in revision, which was binding on the Asstt. Collector. Therefore, the refund sanctioned by the order dated 11-5-1983 cannot be considered erroneous.

(b) Applicability of Section 11B Time Limit:
The counsel contended that the six-month limitation under Section 11B(3) should not apply to refunds granted in pursuance of an order-in-revision. The Asstt. Collector was required to grant the refund suo moto, making the time limit inapplicable.

(c) Suo Moto Refund:
The appellant argued that the case is governed by sub-section (3) of Section 11B, which calls for suo moto refund without waiting for a claim. Since the refund was due as a consequence of the Collector's order, it was the duty of the Asstt. Collector to grant the refund without a formal claim.

(d) Mis-statement and Protest:
The appellant had written letters indicating that the payment would be made under protest. The department's receipt of these letters negates any mis-statement by the appellant. The Asstt. Collector's reliance on the absence of "Under protest" stamps on Gate Passes and R.T.12 forms was deemed insufficient to establish mis-statement.

(e) Extended Period under Section 11 A:
The Asstt. Collector invoked the extended period of five years under Section 11 A, citing mis-statement by the appellant. However, the tribunal found that the protest letters were sufficient to negate claims of mis-statement, making the extended period inapplicable.

(f) Recovery of Time-barred Claim:
The tribunal referenced multiple judgments, including the Kerala High Court and Tribunal decisions, to assert that a time-barred claim, if admitted and paid, does not confer a right of recovery on the department. Limitation bars the remedy but does not extinguish the right.

(g) Time-barred Demand Notice:
The demand notice dated 16-8-1984, issued more than six months after the payment on 18-5-1983, was deemed time-barred. The normal period for recovery under Section 11 A is six months, and the extended period was not applicable due to the absence of mis-statement.

Conclusion:
The tribunal concluded that the appellant's contentions were valid. The refund was due as a consequence of the Collector's order, making the time limit inapplicable. The protest letters negated claims of mis-statement, and the demand notice was time-barred. The order-in-appeal and the Asstt. Collector's order were set aside, and the appeal was accepted.

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