1990 (2) TMI 203 - AT - Central Excise

Summary

Issues Involved:
1. Whether the credit sought to be availed can be equated with the refund under Sec. 11B of the Central Excises and Salt Act, 1944.
2. Whether the application for incentive credit is barred by limitation as provided under Sec. 11B.

Detailed Analysis:

Issue 1: Equating Credit with Refund under Sec. 11B
The appellants argued that their application for incentive credit under Notification No. 150/83-C.E. should not be construed as a refund claim under Sec. 11B of the Central Excises and Salt Act, 1944. They contended that their application was for the grant of sanction to avail incentive credit and not a refund, thus Sec. 11B should not apply. They relied on previous decisions (Collector of Central Excise v. Fort William Co. Ltd., Carborundum Universal Ltd. v. Union of India, and Collector of Central Excise v. Associated Cement Corporation Ltd.) to support their claim that the limitation period for refunds does not apply to incentive credits.

The respondents, however, argued that the incentive credit could be construed as a refund or rebate and cited decisions (Collector of Central Excise v. Tulsipur Sugar Co. Ltd., Collector of Central Excise v. Matwa Sugar Mills Co. Ltd., and M/s. Namdang Tea Co. Ltd. v. Collector of Central Excise) to support their stance that the period of limitation under Sec. 11B applies to incentive rebates.

The Tribunal examined the dictionary meaning of "refund" and concluded that the credit contemplated under Rule 56AA and Notification No. 150/83 is essentially a refund of the duty initially paid, albeit to be utilized for future payments rather than being paid back in cash. Thus, the Tribunal held that the credit sought by the appellants falls within the purview of "refund" under Sec. 11B.

Issue 2: Limitation Period for Application
The Tribunal noted that the appellants made their application for incentive credit on 16-10-1984, well beyond the incentive period which ended on 29-2-1984. According to Notification No. 150/83, the earliest date for availing the credit was 1-4-1984. Therefore, any application for credit should have been made within six months from this date, as per the limitation period specified in Sec. 11B.

The Tribunal referred to the decisions cited by the appellants and respondents, particularly emphasizing that while the Madras High Court and CEGAT decisions in similar cases pertained to notifications where the base period and base clearance had to be determined by the competent authority, in this case, both were already specified in the notification. Thus, the limitation period could be computed from the specified date without any need for further determination.

The Tribunal concluded that the application filed on 16-10-1984 was beyond the six-month limitation period starting from 1-4-1984, making the claim time-barred under Sec. 11B.

Conclusion:
The Tribunal held that the claim for incentive credit was rightly rejected as time-barred under Sec. 11B of the Central Excises and Salt Act, 1944. The appeal was accordingly rejected.