2009 (11) TMI 377 - AT - Central Excise

Refund- Limitation- The relevant date in the present case would be as defined in Section 11B(5)(d) as this is a case of reduction of duty by the Government and if this date is accepted to be the relevant date, then the claim is not barred, as the duty was reduced only from 20% to 18% only on 1-3-1997. Held that- the adjudicating authority who shall put the appellants notice on the applicability of the provisions of Rule 9A and hear the appellants both on the above issue as well on their plea that the relevant date in this case is one defined in Section 11B(5)(d) of the Central Excise Act. Fresh orders shall be passed in accordance with law after extending a reasonable opportunity to the assessees of being heard in their defence. The appeal is thus allowed by way of remand.

Summary

Issues: Refund claim under Section 11B of the Central Excise Act, 1944 for differential duty due to reduction in duty rate; Determination of relevant date for computation of limitation period; Applicability of Rule 9A of the Central Excise Rules, 1944 on rate of duty for pre-budget clearances.

Analysis:
1. The case involved a refund claim under Section 11B of the Central Excise Act, 1944 for the period when the duty rate was reduced from 20% to 18%. The appellants, manufacturers of explosives, faced challenges in collecting the differential duty from customers post the duty reduction. The claim was initially rejected due to being time-barred under Section 11B, with only a partial refund granted. The adjudicating authority upheld this decision, leading to the appeal.

2. The Tribunal considered the relevant date for limitation under Section 11B(5)(d) in cases of duty reduction by the Government. The appellants argued that the duty reduction date should be the relevant date, which was not raised earlier. The Tribunal highlighted the importance of determining the applicable duty rate under Rule 9A at the time of actual removal of goods from the factory. It was noted that the authorities had not assessed whether the reduced rate could apply to pre-budget clearances, emphasizing the need to consider the rate applicable at the time of removal.

3. Consequently, the Tribunal set aside the previous order and remitted the case for fresh consideration. The adjudicating authority was instructed to address the applicability of Rule 9A and hear the appellants on both the duty rate issue and the relevant date as per Section 11B(5)(d). It was emphasized that determining the correct duty rate was crucial for assessing eligibility for the refund claim. The appellants were to be given a fair opportunity to present their case before a new decision was made.

4. In conclusion, the appeal was allowed for a remand to reevaluate the refund claim in light of the duty rate determination and the relevant date for limitation under Section 11B. The case highlighted the importance of considering statutory provisions and ensuring a thorough assessment of the duty rates applicable during the relevant period for excise duty refunds.