1985 (2) TMI 180 - AT - Central Excise

Summary

Issues:
Claim for rebate under Notification No. 257/76-C.E.
Validity of demand under Form DD. 2 without Show Cause Notice.
Time-barred demand for repayment.
Suppression of fact regarding export of sugar without duty payment.
Applicability of wilful mis-statement or suppression of fact.
Verification of records before granting rebate.

Analysis:
The judgment involves a claim for rebate by M/s. Basti Sugar Mills Co. under Notification No. 257/76-C.E. The Assistant Collector initially allowed a rebate of Rs. 9,41,707.67 for excess sugar production from October 1976 to September 1977. However, a subsequent demand was made in January 1981 for a repayment of Rs. 20,104 due to the export of sugar without duty payment, leading to a dispute.

The validity of the demand under Form DD. 2 without a Show Cause Notice was raised by the appellants. It was argued that the demand lacked validity as no opportunity to contest was provided initially. However, it was noted that a subsequent letter did offer an opportunity for submission, which the appellants utilized before the order was passed.

The issue of the demand being time-barred was also raised. The demand was made in January 1981, well beyond the normal six-month period for enforcement. The absence of any indication of fraud or wilful mis-statement in the demand letters supported the argument that the demand was time-barred and could not be enforced.

The question of suppression of fact regarding the export of sugar without duty payment was central to the dispute. The Assistant Collector contended that the appellants intentionally suppressed this fact, justifying the demand for repayment. However, it was highlighted that the export details were disclosed in the RG.1 register and RT.12 returns before the rebate order was granted, indicating no deliberate concealment by the appellants.

The applicability of wilful mis-statement or suppression of fact was crucial in determining the validity of the demand. The absence of any such misconduct by the appellants during the rebate claim process, as evidenced by the disclosed export details, undermined the authorities' assertion of suppression of fact.

The judgment emphasized the importance of verifying records before granting rebates. It was noted that the authorities had access to the export information in the RG.1 register and RT.12 returns when sanctioning the rebate, indicating that the appellants had not engaged in wilful mis-statement or suppression of fact during the claim process.

Ultimately, the Tribunal found the demand for repayment to be time-barred due to the lack of evidence supporting wilful mis-statement or suppression of fact by the appellants. Consequently, the appeal was allowed, and the orders of the lower authorities were set aside.