1989 (8) TMI 220 - AT - Central Excise

Summary

Issues Involved:
1. Entitlement to exemption under Notification No. 83/83-C.E.
2. Time-barred refund claim.
3. Proper assessment and adjustment under Rule 173I.
4. Applicability of Section 11B for refund claims.

Issue-wise Detailed Analysis:

1. Entitlement to Exemption under Notification No. 83/83-C.E.:
The appellant is engaged in the manufacture and sale of Steel Bolts and Nuts, which fall under Item No. 52 of the Central Excise Tariff. According to the Government of India Notification No. 83/83-C.E., dated 1-3-1983, these products were eligible for full exemption from duty up to a value of Rs. 7.5 lakhs during the financial year 1983-84. The appellant's total value of excisable goods cleared in the preceding financial year was far less than Rs. 25 lakhs, making them entitled to clear bolts and nuts without payment of duty up to Rs. 75 lakhs for the financial year ending 31-3-1984.

2. Time-barred Refund Claim:
The appellant inadvertently paid duty on a consignment cleared on 14-3-1984, mistakenly thinking that the total clearance value had exceeded Rs. 7.5 lakhs. They requested the Jurisdictional Superintendent to assess the goods at a Nil rate of duty, which was in line with the approved classification list. The Superintendent assessed the goods at Nil duty and advised the appellant to file a refund application. The Assistant Collector rejected the refund claim as time-barred, and this decision was upheld by the Collector (Appeals).

3. Proper Assessment and Adjustment under Rule 173I:
The appellant argued that their refund claim arose from an assessment on RT-12 for March 1984, which the Superintendent had assessed at Nil duty. They contended that the Superintendent had erred in advising them to file a refund application and that the Assistant Collector should have ordered the correction and allowed adjustment by crediting the amount in the PLA. The appellant submitted that Rule 173I, framed under Section 37(2), excluded refund by adjustment from the purview of Section 11B.

4. Applicability of Section 11B for Refund Claims:
The appellant received the assessed copy of the RT-12 return on 12-12-1984 and filed the refund claim on 27-12-1984, within 15 days of receiving the communication. They argued that the Superintendent should have allowed credit or debit in the PLA in case of over-payment and under-payment, as was the prevalent practice. The learned SDR contended that Section 11B talks of refund, while Rule 173(1) talks of adjustment, and these terms are different. The SDR also argued that the relevant date for the purpose of claiming a refund is the date of payment of duty by debiting the PLA, not the date of completion of RT-12.

Judgment:
The Tribunal observed that the classification list had been approved by the Assistant Collector, allowing the appellant the benefit of the exemption notification. The Superintendent had finalized the RT-12 indicating Nil duty. Therefore, any payment in excess of the amount assessed could not be categorized as duty and was not covered by Section 11B, which relates to cases of refund of duty. The Tribunal held that the present case was one of correct assessment but incorrect payment, requiring rectification. The Superintendent was within his competence to allow credit of the amount due in the PLA. The Tribunal set aside the orders of the lower authorities, stating that no refund application was necessary and no question of time bar arose. The appeal was accepted.

Separate Judgment by Member (J):
Member (J) agreed with the conclusions of Member (T), emphasizing that the present case was about implementing the initial order of the Assistant Collector approving the classification list. The adjustment was consequential to the completion of the assessment by the Superintendent. The contention that the date of payment to the Government by adjustment or debit in PLA is the relevant date for calculating the time-bar under Section 11B was not accepted, as there is no provision to this effect under Section 11B. The claim was not one of refund but one of assessment, and Rule 173I applied to this case. The appeal was accepted, and the impugned order was set aside.