1996 (11) TMI 155 - AT - Central Excise

Summary

Issues:
1. Benefit of exemption Notification No. 198/76 dated 16-6-1976.
2. Entitlement to refund of excess duty paid.
3. Barred by limitation refund claim.
4. Determination of base period and base clearances for availing exemption.
5. Commencement of the period of limitation for refund claims.
6. Interpretation of refund claim submission date.

Analysis:

1. The Respondent, engaged in chemical manufacturing, sought exemption under Notification No. 198/76 dated 16-6-1976, which allowed exemption of excise duty in excess of 75% of the duty on clearances exceeding the base clearance. The Respondent applied for approval of base period and clearances on 17-9-1976, which was granted on 27-5-1977. The dispute arose when the Respondent claimed refund of excess duty paid due to belated approval, leading to the current appeal by the Department.

2. The issue of whether the Respondent was entitled to the benefit of the Notification despite not claiming it in the original classification list filed before the Notification's issuance was raised. The Collector (Appeals) rightly rejected the argument that the Respondent could not claim the benefit due to the timing of the revised classification list submission, as the original list was filed before the Notification came into effect, and the Respondent promptly sought approval post-Notification.

3. The crucial question of limitation for the refund claim was debated. The Assistant Collector initially deemed the claim time-barred, but the Collector (Appeals) overturned this decision, considering a letter dated 6-6-1976 as the effective refund claim submission, thus ruling the claim within the time limit.

4. Notification No. 198/76 required a determination of base period and clearances before availing the exemption. The process involved approaching the Assistant Collector for approval based on necessary documents. This procedural requirement was essential for claiming the exemption, as clarified by various trade notices issued by Collectors.

5. The Tribunal's decision in K.B. Foams Limited v. Collector of Central Excise established that the period of limitation for refund claims commences from the approval date of base period and clearances. This departure from the standard limitation commencement date was further supported by logical explanations in other Tribunal decisions, ensuring relief for the assessee in such cases.

6. Following the logic from previous decisions, the Tribunal concluded that the Respondent's declaration on 17-9-1976 staked a claim for future clearances, and the letter dated 6-6-1976 effectively constituted the refund claim submission, meeting all necessary requirements. Consequently, the Tribunal upheld the Collector (Appeals) decision that the refund claim was within the stipulated time, leading to the dismissal of the Department's appeal.