1994 (6) TMI 71 - AT - Central Excise

Issues Involved:
1. Refund claims for duty paid between 18-6-1977 and June 1980.
2. Time-barred claims.
3. Payment of duty under protest.
4. Applicability of Rule 173B and Section 11B.
5. Entitlement to interest on refunded amounts.
6. Violation of natural justice.
7. Exemption from duty based on the use of power.

Issue-wise Detailed Analysis:

1. Refund Claims for Duty Paid Between 18-6-1977 and June 1980:
The appellant, a unit of Jammu & Kashmir Industries Ltd., claimed refunds for duty paid on the manufacture of turpentine oil between 18-6-1977 and June 1980. The claims were based on the assertion that the unit operated without the aid of power and thus was entitled to exemption under Notification 179/77. The refund claims were partially rejected and partially sanctioned, leading to multiple appeals.

2. Time-Barred Claims:
Refund claims for the periods 18-6-1977 to 31-3-1978, 1-4-1978 to 31-3-1979, and 1-4-1979 to 31-12-1979 were rejected as time-barred under Rule 11, which was in force during that period. The appellant's contention that duty was paid under protest was not accepted due to a lack of formal indication of protest in the relevant documents.

3. Payment of Duty Under Protest:
The appellant argued that duty was paid under protest, citing various correspondences and show cause notices. However, the tribunal found no formal indication of protest prior to 1-1-1980. The lower appellate authority's reliance on Rule 173B(3) was upheld, which mandates formal protest for disputing the rate of duty.

4. Applicability of Rule 173B and Section 11B:
The Vice President noted that Rule 173B could not be applied retrospectively and that Section 11B, inserted with effect from 17-11-1980, was not applicable to the period in question. Despite these technicalities, the Vice President found no evidence of coercion or protest during the relevant period.

5. Entitlement to Interest on Refunded Amounts:
The tribunal rejected the appellant's claim for interest on refunded amounts due to the absence of any legal provision allowing such interest. This decision was consistent across both the accepted and rejected refund claims.

6. Violation of Natural Justice:
The Vice President observed a technical violation of natural justice, as there was no reference to any hearing or notice of hearing in the orders. Although this point was not pressed by the appellant, it was noted as a procedural lapse.

7. Exemption from Duty Based on the Use of Power:
The appellant claimed exemption from duty on the grounds that the unit operated without the aid of power. However, no evidence was provided to substantiate this claim for the periods in question. The Assistant Collector's letter dated 26/28-5-1980, granting exemption, did not specify the relevant period and was considered a non-speaking order.

Separate Judgments:

Judgment by Member (Judicial):
The Member (Judicial) dismissed the appeals, upholding the rejection of refund claims as time-barred and unsupported by evidence of protest or coercion.

Judgment by Vice President:
The Vice President proposed remanding the matters to the Assistant Collector for reconsideration, noting procedural lapses and the need to consider the appellant's letter dated 20-9-1979 as a claim for exemption. The Vice President also emphasized that the benefit of exemption should be granted for the entire period if the conditions were fulfilled.

Final Order:
In view of the majority opinion, the matters were remanded to the Assistant Collector for de novo consideration, with instructions to provide the appellants an opportunity to be heard before passing the order.

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