1995 (3) TMI 284 - AT - Customs

Summary

Issues Involved:

1. Applicability of Section 11A of the Central Excises & Salt Act, 1944.
2. Allegation of suppression of facts by the appellants.
3. Interpretation of Rule 57F(3) and Notification No. 85/87.
4. Limitation period for recovery of erroneously paid refunds.

Issue-wise Detailed Analysis:

1. Applicability of Section 11A of the Central Excises & Salt Act, 1944:

The appellants contended that Section 11A does not apply to their case as the refund was claimed under a special notification issued under Rule 57F(3), which contains a self-contained procedure. They argued that the notification does not reference Section 11A, and thus, it should be construed independently. The Tribunal agreed, noting that Section 11A deals with the refund of duty under the Act and rebate eligible under Rule 12 and 12A of the Central Excise Rules, which do not pertain to the Modvat scheme. The Tribunal emphasized that the Modvat scheme is self-contained with its own procedures and limitations.

2. Allegation of suppression of facts by the appellants:

The appellants were accused of misdeclaring and suppressing the actual quantity of inputs used in the manufacture of Analgin, leading to an erroneous refund. The appellants argued that all relevant particulars were furnished to the department and scrutinized by various authorities before the refund was granted. The Tribunal found that the appellants' accounts were thoroughly examined, and the refund was sanctioned after due scrutiny, thus the allegation of suppression was not substantiated.

3. Interpretation of Rule 57F(3) and Notification No. 85/87:

The appellants claimed a refund under Rule 57F(3) read with Notification No. 85/87, which allows for the refund of Modvat credit on inputs used in the manufacture of exported goods. The Tribunal noted that the notification issued under Rule 57F(3) is a special provision with specific conditions, including a built-in period of limitation for erroneous refunds. The Tribunal emphasized that the notification must be interpreted as a self-contained scheme, excluding the applicability of Section 11A.

4. Limitation period for recovery of erroneously paid refunds:

The Tribunal highlighted that Clause 4 of the notification mandates a six-month period for the recovery of erroneously paid refunds. The Tribunal ruled that this specific period of limitation, as prescribed in the notification, must be adhered to. Consequently, the show cause notice issued on 19-1-1993 for the recovery of refunds granted for the period April 1990 to December 1991 was deemed barred by limitation.

Conclusion:

The Tribunal concluded that the show cause notice was barred by limitation based on the specific period prescribed in the notification under Rule 57F(3). The impugned order was set aside, and the appeals were allowed, without addressing other pleas raised by the appellants.