1995 (5) TMI 125 - AT - Central Excise

Summary

Issues:
1. Proforma credit denial for non-production of gate pass.
2. Refund recovery due to time limitation under Section 11B.
3. Legal point on duty payment under T.R. 6 challan.
4. Applicability of time limit for refund sanction.

Analysis:
The appeal before the Appellate Tribunal concerned the denial of proforma credit to the appellants for not producing original gate passes for certain cotton fabrics. The Tribunal had remanded the case to the Assistant Collector to consider the gate passes produced during the appeal stage. Subsequently, the Assistant Collector sanctioned the refund of the duty paid, which led to the initiation of proceedings for recovery of the refund on the grounds of time limitation under Section 11B. The department issued Show Cause Notices and passed an adjudication order for recovery, which was confirmed by the Collector (Appeals), leading to the present appeal.

The legal contention raised by the JDR was that the time limit prescribed under Section 11B for refund sanction should be adhered to, especially if the duty payment under T.R. 6 challan was not made under protest. However, the Tribunal disagreed with this argument, emphasizing that the refund should be granted based on the order passed by the appellate forum. The Tribunal noted that when an original order is set aside, any payment made pursuant to that order is not a duty payment but a deposit that should be refunded. Furthermore, the Tribunal highlighted that the payment of duty is necessary to pursue the statutory remedy of appeal, and if the appeal results in modifying or setting aside the original order, the time limit under Section 11B does not apply.

In conclusion, the Tribunal allowed the appeal, rejecting the department's stance on re-cycling the issue of refund recovery despite the earlier order of the Tribunal. The Tribunal emphasized that the refund should be granted following the appellate forum's decision, and in this case, there was no merit in applying the time limit under Section 11B. The stay application was also disposed of in light of the appeal decision.