1989 (7) TMI 228 - AT - Central Excise

Summary

Issues:
Claim for refund of central excise duty under Notification No. 17/71-C.E., application of limitation period for refund claim, revision of refund claim, proportionate basis for refund calculation, verification of input materials by the Asstt. Collector.

Analysis:
The appellants manufactured steel castings using a mix of fresh unused duty paid steel melting scrap and old steel melting scrap. They applied for a refund of a part of the central excise duty paid, citing Notification No. 17/71-C.E. The claim was rejected by the Asstt. Collector and upheld by the Appellate Collector, stating that the exemption did not apply as the input included both duty paid and non-duty paid scrap. The advocate argued that several judgments support the view that the exemption should be granted on a proportionate basis, considering the duty paid and non-duty paid scrap used in manufacturing. The Tribunal agreed, citing relevant case law and setting aside the impugned order as contrary to the law as interpreted by the Supreme Court.

Regarding the revision of the refund claim, the advocate contended that the revision at the department's direction should not affect their right to a full refund. The Asstt. Collector pointed out that the factual position of the input materials needed verification before any refund could be granted. The Tribunal acknowledged the applicability of the law of limitation even if the revision was done at the department's behest, directing the Asstt. Collector to consider this while reassessing the matter.

The Tribunal also addressed the issue of limitation under Section 11B for the claim, agreeing with the advocate that the claims submitted before a specific date should be governed by the limitation in force at that time. The limitation for these claims should align with Rule 11 read with Rule 173J as applicable during the relevant period. Consequently, the impugned order was set aside, and the matter was remanded to the Asstt. Collector for verifying the factual position of the raw materials used and determining the admissible refund amount based on the law.

Given the age of the matter, the Tribunal directed the Asstt. Collector to prioritize the case and issue fresh orders within three months of the appellants submitting the necessary evidence. The appellants were to be granted a fair opportunity to present their case during this process. Ultimately, the appeal was disposed of by remand, emphasizing the need for a thorough verification process before granting any refund.