1987 (3) TMI 369 - AT - Central Excise

Summary

Issues involved:
The issue involves the jurisdiction of the Appellate Tribunal CEGAT, New Delhi to hear an appeal regarding an order passed by the Collector (Appeals) under Section 35E (4) of the Central Excises and Salt Act, 1944. The main point of contention is whether the order of the Collector (Appeals) can be appealed to the Tribunal and the merits of the case.

Summary:

1. The Collector (Appeals) passed an order under Section 35E of the Central Excises and Salt Act, 1944, regarding the entitlement of exemption to M/s. Re-Rolling Mills. The order stated that the appellants were no longer entitled to exemption from a certain date due to a substitution of the exemption notification. The department filed an appeal against the refund granted by the Assistant Collector, claiming it was erroneous due to suppression of material information by the appellants. The Tribunal found that the appeal was not time-barred as it was filed within the prescribed time limit under Section 11A.

2. The counsel for M/s. Re-Rolling Mills argued that the demand for recovery was time-barred and unlawful. They contended that there was no suppression of information as the clearances were known to the Central Excise officers. They also challenged the jurisdiction of the Collector (Appeals) to issue the notice under Section 35E.

3. The department's counsel argued that the Appellate Collector had the authority to act under Section 35E and cited relevant case laws in support. They emphasized that the appeal was filed within the statutory time limit, thus not time-barred.

4. The Tribunal noted that the demand for recovery should have been made within six months of the refund date, as per Section 11A. The notice issued by the Collector (Appeals) was not a demand and was issued after a considerable delay. The Tribunal clarified that the five-year time limit under Section 11A does not apply to appeals or applications, and the Collector misunderstood its application.

5. The Tribunal emphasized that the time limit under Section 11A governs the issuance of demands for erroneously refunded money. Since no demand was issued within the prescribed time limit, the order of the Appellate Collector was deemed invalid for recovery purposes.

6. It was concluded that the department should have followed the procedure under Section 11A to issue a demand within the specified time frame if they believed there was fraud or suppression involved in the refund. Since this was not done, the order of the Appellate Collector was set aside as incorrect.