1998 (3) TMI 434 - AT - Central Excise

Summary

Issues:
Refund claim rejection based on lack of clarity in discount allowance and grounds for rejection, bar of limitation not mentioned in show cause notice, inconsistency in approved price list and refund claim, applicability of Section 11B(2) of the Central Excise Act, 1944.

Analysis:

1. The appeal challenged the order-in-appeal confirming the rejection of a refund claim by the Assistant Collector. The refund claim pertained to a period from July 1986 to September 1987, based on yearly rebates granted to wholesale buyers. The discount was not reflected in invoices but granted at the end of the year. The Assistant Collector rejected the claim, citing inconsistency with the price list and lack of discount allowance at the time of clearance.

2. The Collector (Appeals) upheld the rejection on the grounds of limitation, alteration of approved price list, and rendering the price list meaningless. However, it was noted that the show cause notice did not mention the bar of limitation, violating principles of natural justice. The Collector was deemed unjustified in supporting the rejection on the ground of limitation without proper notice.

3. The price list submitted by the appellant clearly disclosed the yearly discount structure with slab rates, approved without modification. The lower authorities' argument of inconsistency with the approved price list was deemed invalid. Even if a specific discount was not declared, the refund claim could be allowed if the discount was known to the trade and actually granted.

4. The appellant relied on precedents to support the admissibility of the refund claim, emphasizing that excess duty payment warrants a refund irrespective of the reasons for overpayment. The key issue was whether the discount scheme was known to all buyers and applied during the relevant period. The appellant's contentions regarding the circulation of the scheme and lack of consideration by the Assistant Collector necessitated a reevaluation based on evidence.

5. The judgment set aside the impugned order and remanded the case for fresh adjudication, allowing the appellant to present evidence and have a personal hearing. The matter was to be reconsidered in light of the evidence provided, including the applicability of Section 11B(2) of the Central Excise Act, 1944, concerning refund claims.