1996 (10) TMI 273 - AT - Central Excise

Summary

Issues Involved:
1. Timeliness of the application under Section 35E(4) of the Central Excise Act, 1944.
2. Validity of the direction issued by the Collector to the Assistant Collector (Legal) under Section 35E(2) of the Act.
3. Applicability of the time limit specified in Section 11A of the Act to the appeal process under Section 35E(4).

Issue-wise Detailed Analysis:

1. Timeliness of the application under Section 35E(4) of the Central Excise Act, 1944:

The Collector (Appeals) dismissed the appeal on the grounds that the application filed before him under Section 35E(4) was barred by the time stipulated under Section 35E(3). The adjudication order was passed on 9-12-1982, and the Collector directed the Assistant Collector to file an application before the Collector (Appeals) under Section 35E(4). The Collector (Appeals) believed that since the order of the Collector under Section 35E(2) was passed beyond the one-year time limit stipulated under Section 35E(3), the application was not maintainable. However, the period stipulated was two years at the time the Collector passed the order, and the reduction to one year by the Finance Act, 1984, was not applicable retroactively. Therefore, the application was within the permissible time frame.

2. Validity of the direction issued by the Collector to the Assistant Collector (Legal) under Section 35E(2) of the Act:

The Collector (Appeals) held that the Collector could not direct an officer other than the adjudicating authority to file an application under Section 35E(4). Section 35E(2) allows the Collector to direct "such authority" to apply to the Collector (Appeals), which typically refers to the adjudicating authority. However, Section 35E(4) states that the application can be made by "the adjudicating authority or authorized officer." This indicates a broader interpretation, allowing the Collector to direct either the adjudicating authority or another authorized officer to file the application. The Tribunal referred to previous decisions, such as *Collector of Customs v. Merah Exports Pvt. Ltd.* and *Sun Export Corporation v. Collector of Customs*, which supported a broader interpretation, allowing any authorized officer to file the application.

3. Applicability of the time limit specified in Section 11A of the Act to the appeal process under Section 35E(4):

The Collector (Appeals) reasoned that under Section 35A, he could not demand repayment of an erroneously refunded amount unless notice was given within the time limit specified under Section 11A. Since the notice was issued to the assessee on 26-12-1983 and received on 27-12-1983, it was beyond the six-month limit stipulated under Section 11A. However, the Tribunal clarified that the second proviso to Section 35A(3) applies only in appeals preferred by the assessee, where the appellate authority proposes to pass an order against the appellant-assessee. In such cases, notice must be given within the time limits specified in Section 11A. This proviso does not apply to appeals filed by the department under Section 35E(4).

Conclusion:

The Tribunal found that the Collector (Appeals) erred in holding that the application was barred by time and that the Collector could not direct an officer other than the adjudicating authority to file the application. The case was remanded to the jurisdictional Collector (Appeals) for fresh disposal on merits, as the merits of the appeal were not considered. The impugned order was set aside, and the appeal was allowed.