1992 (10) TMI 206 - AT - Central Excise

Summary

Issues Involved:
1. Whether the refund claim filed by the assessee is time-barred under Section 11B of the Central Excises and Salt Act, 1944.
2. Whether the reclassification of the product by the Assistant Collector entitles the assessee to a refund.
3. Whether the reply to the show cause notice can be considered as a valid refund claim.

Issue-wise Detailed Analysis:

1. Whether the refund claim filed by the assessee is time-barred under Section 11B of the Central Excises and Salt Act, 1944:
The assessee filed a refund claim on 1-6-1982 for duty paid from 1-3-1978 to 30-10-1980, arguing that the duty was paid in excess due to a mistake in classification. The department issued a show cause notice on 23-12-1982, stating the refund was time-barred under Section 11B. The Assistant Collector concluded that the claim was filed after 18 months from the date of payment and was thus time-barred. The Collector (Appeals) partially agreed but limited the refund eligibility to the period from 26-2-1980 to 30-10-1980 due to the reclassification date. However, the Tribunal found that the refund application dated 1-6-1982 was indeed filed beyond the six-month limit prescribed by Section 11B, making the claim time-barred.

2. Whether the reclassification of the product by the Assistant Collector entitles the assessee to a refund:
The Collector (Appeals) held that the refund claim arose due to the reclassification of the product by the Assistant Collector on 26-2-1980, which changed the duty rate from 32% ad valorem plus Rs. 800 per M.T. to 5% ad valorem. The Tribunal noted that mere reclassification does not automatically entitle the assessee to a refund without a proper refund application as per Section 11B. The Tribunal cited the case of Stewarts and Lloyds of India Ltd., emphasizing that reclassification alone does not justify a refund without a formal application.

3. Whether the reply to the show cause notice can be considered as a valid refund claim:
The assessee argued that their reply to the show cause notice dated 28-12-1980 should be treated as a refund claim. The Assistant Collector and the Tribunal found this argument unsustainable because the reply did not furnish the necessary details and documents required for a refund claim. Additionally, the period and amount mentioned in the reply did not match the refund claim. The Tribunal referenced the Embarkation Headquarters Bombay v. Collector of Customs and C.C.E. v. I.T.C. Ltd. cases, which held that refunds are liable to be rejected if material documents are not furnished with the claim.

Conclusion:
The Tribunal concluded that the refund claim filed on 1-6-1982 was time-barred under Section 11B and that the reclassification of the product did not automatically entitle the assessee to a refund. The reply to the show cause notice could not be considered a valid refund claim. Consequently, the Revenue's appeal was allowed, and the assessee's cross-appeal was rejected.