1985 (12) TMI 271 - AT - Central Excise

Summary

Issues:
1. Review of excess rebate granted to a sugar mill.
2. Recovery of excess rebate by the Central Excise department.
3. Allegation of suppression of facts by the sugar mill.
4. Time limitation for recovery of excess rebate.

Analysis:
1. The case involved a review of the excess rebate sanctioned to a sugar mill for the production of sugar during a specific period. The Government issued a show cause notice to the sugar mill for reviewing the order passed by the Appellate Collector of Central Excise, Madras. The sugar mill had been granted rebate on excess sugar production, but discrepancies were found in the duty paid and the rebate amount, leading to an excess rebate of Rs. 1,46,016.42.

2. The Central Excise department contended that the sugar mill had enjoyed an exemption exceeding the duty paid, leading to an erroneous refund that could be recovered within the extended time limit. On the other hand, the sugar mill argued that they had not concealed any information and had complied with all formalities to obtain the rebate. They disputed the department's claim of excess rebate and argued that the demand for recovery was time-barred.

3. The Tribunal considered the submissions from both sides regarding the suppression of facts by the sugar mill. The show cause notice issued by the department did not specifically allege suppression of facts, and the Tribunal emphasized that suppression needed to be both alleged and proven for the extended recovery period to apply. The Tribunal noted discrepancies in the department's claims regarding the duty amount to be recovered, indicating inconsistencies in the department's case.

4. Ultimately, the Tribunal agreed with the Appellate Collector that there was no basis for the department to claim suppression of facts by the sugar mill. The Tribunal rejected the appeal, ruling that the recovery demand was time-barred and that the department's contentions regarding suppression of facts were not substantiated. The Tribunal emphasized the importance of proving suppression and adhering to the criteria for applying the extended recovery period, ultimately siding with the sugar mill in this case.