1997 (4) TMI 147 - AT - Central Excise

Summary

Issues:
1. Whether the refund application for the excess amount of interest paid on fabrics is hit by limitation.
2. Whether interest payable under Rule 49A of the Central Excise Rules amounts to duty under the Central Excise Act.
3. Whether the provisions of Section 11B of the Central Excise Act are applicable to the refund claim.
4. Whether the refund claim filed beyond the time limit of six months under Section 11B is admissible.

Analysis:

1. The case involved a dispute regarding the payment of excise duty on cotton yarn and fabrics. The appellants claimed a refund of excess interest paid on cotton fabrics following a Supreme Court decision that calendering does not convert grey fabric into processed fabric. The Asstt. Commissioner rejected the refund claim on the grounds that the duty was not paid under protest and that the claim was beyond the limitation period of six months under Section 11B. The Commissioner (Appeals) upheld this decision.

2. The appellant's advocate argued that interest payable under Rule 49A does not amount to duty under the Central Excise Act, thus Section 11B does not apply. The advocate contended that the refund application was filed within three months of the Supreme Court judgment, and the general law of limitation should apply to refunds of duty paid without authority.

3. The Departmental Representative argued that a reasonable limit should be read into statutes without specific limitations. Referring to a recent Supreme Court decision, the DR contended that the limitation period should be strictly adhered to. The appellant's counsel countered that the Supreme Court decision did not address interest payment and refund in relation to Section 11B.

4. The Tribunal analyzed previous decisions and the scope of Section 11B. It noted a Tribunal decision stating that interest under Rule 49A is not considered duty. However, the Supreme Court emphasized that all refund claims must adhere to the limitations prescribed in the Central Excise Act and Rules. The Supreme Court held that no claim for refund is maintainable except under the Act's provisions. The Tribunal concluded that the refund claim based on another assessee's case was not permissible under Section 11B and rejected the appeal based on the Supreme Court's observations.

In conclusion, the Tribunal rejected the appeal, emphasizing the importance of adhering to the limitations and procedures prescribed under the Central Excise Act for refund claims, as established by the Supreme Court's judgments.