1992 (6) TMI 119 - AT - Central Excise

Summary

Issues:
- Appeal against rejection of refund application as time-barred under Section 35 of the Central Excises & Salt Act, 1944.
- Interpretation of speaking order requirement for filing an appeal.
- Determining the date of communication of refund order for appeal purposes.

Analysis:

The appeal before the Appellate Tribunal CEGAT, Madras was against the rejection of a refund application by the Collector of Central Excise (Appeals), Madras, claiming it was barred by time under Section 35 of the Central Excises & Salt Act, 1944. The appellant had filed a provisional price list initially and later a final price list seeking a refund of excess amounts paid for transport and insurance charges. The Assistant Collector issued cheques for lesser amounts without providing reasons, prompting the appellant to seek clarification. The Assistant Collector's explanation on 23-2-1988 was considered the legal basis for filing an appeal, as it constituted a speaking order, necessary for appeal initiation.

The Tribunal noted that the communication on 23-2-1988, explaining why the full refund was not granted, served as the cause of action for the appellant to appeal. A speaking order is essential for appealability, and the letter dated 23-2-1988 fulfilled this requirement. The Tribunal held that the lower appellate authority's dismissal of the appeal as time-barred was incorrect. Consequently, the impugned order was set aside, and the matter was remanded for reconsideration on merits in accordance with the law.

In a separate opinion, another Member of the Tribunal concurred with the decision. It was highlighted that the appellant was not informed about the sanctioning of lesser amounts before receiving the cheques, and no reasons were provided for the reduced refunds. The date of receipt of cheques was not considered the date of communication of the refund order. It was emphasized that for an order to be appealable, it must provide reasons and be passed after due process of law. The subsequent letter explaining the lesser amount sanctioned was deemed the appealable order as it informed the appellant of the reasons for the reduced refunds.

Additionally, it was clarified that the dispatch date of cheques was relevant from the Department's perspective for potential excess sanction recovery. The date of the cheque issue was determined as crucial for any future recovery actions, as per the provisions of Section 11A. This interpretation was supported by a previous order in the case of Collector of Central Excise, Cochin v. M/s. B.P.L. Systems & Projects Ltd. dated 28-4-1992.