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TMI Blog1990 (8) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... r and ordered de novo adjudication for issue of a speaking order. This appeal is against the said order. 3. We have heard Shri N. Singh, Consultant for the appellants and Shri Balbir Singh for the Department. 4. The contention of the appellants is that the demand under notice dated 18-5-1979 was barred by time and therefore the Collector (Appeals), who accepted that the grant of rebate under order dated 28-10-78 was not provisional, should have on this ground of time bar itself set aside the order of the Assistant Collector and should not have ordered readjudication by way of remand. The Collector (Appeals) had ordered readjudication on the ground that in his order confirming the demand the Assistant Collector had not indicated the provision in the Central Excise Rules under which he was confirming the demand. 5. On the issue whether the grant of rebate under order dated 28-10-1978 was provisional, the order of the Collector (Appeals) reads as follows : The Assistant Collector in his order dated 16-12-1979 has stated that the rebate amounting to Rs. 6,17,890.92P was granted to the appellants PLA provisionally. However, in the order dated 28-10-1978 sanctioning the rebate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was cleared from the factory. If the department happened to allow a greater amount of reduction in duty than what it thinks was warranted, the excess payment has, in law, to be treated as nothing else but erroneous refund of duty. The authority and procedure for recovering back such excess payment by the Department are laid down in Section 11A of the Act. If the Department chose to issue a demand for such recovery under Section 11A, it cannot in the same breath, say that it is not bound by the time limit laid down in that section. If, on the contrary, the department s stand is that Section 11A did not apply and the limitation under the common law applied, as held by the Collector, then the Collector himself had no jurisdiction to decide the matter; the only course open to him was to file a civil suit for recovery of the excess payment. 7. The concept of provisional refund in such circumstances has again been rejected in the case of Collector of Central Excise v. Malwa Sugar Mills Co. Ltd. - (1986 Vol. 23 E.L.T. 144). The Tribunal observed as follows: The department s plea against the time bar is that the whole arrangement of paying the sugar rebate in anticipation of actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of rebate provisionally. For the reasons stated earlier I hold that the said finding was correct. If so it follows that the demand for repayment of part of that refund was, in this case, made beyond the period of limitation prescribed therefor. I accordingly hold that the Collector (Appeals) should have, following his earler finding, set aside the order of the Assistant Collector finally and ought not have ordered a readjudication, I accordingly allow this appeal and, while upholding the order of the Collector (Appeals) in setting aside the order of the Assistant Collector, set aside the order of the Collector (Appeals) so far as it directs the remand for readjudication. [Contra per : P.C. Jain, Member (T)]. - 10. I have gone through the order dated 14-10-1987 passed by learned brother Sh. Raghavachari. With respect, I regret, I am unable to agree. My separate order is as follows :- 11. A sum of Rs. 6,17,890.92P had been allowed as rebate on the quantity of excess production of sugar during the months May and June, 1978 by the appellants M/s. Kanpur Sugar Works Ltd. in terms of Notification No. 108/78 dated 28-4-1978. This was under order dated 28-10-1978 of the Asstt. Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Asstt. Collector had not indicated the provisions in the Central Excise Rules under which he had confirmed the demand. 16. I am unable to accept the aforesaid pleas of the appellant. From a reading of the Collector (Appeals) order as extracted above, it is apparent that the Collector (Appeals) has cast doubts about the correct state of facts available in the case; In the order dated 28-10-1978, the Collector (Appeals) observes, the Asst. Collector had not indicated that the sanction was provisional, whereas in the order dated 26-12-1979, the Asstt. Collector had indicated that the earlier order dated 28-10-1978 sanctioning the amount of Rs. 6 lakhs as rebate was credited to the appellants PLA provisionally. In view of the confusion of facts and in the absence of any clear indication regarding the Rules under which the demand was finally confirmed, the Collector (Appeals) has ordered for de novo adjudication. There is nothing wrong on the part of the appellate authority to remand the case to the lower authority for de novo adjudication if the state of facts to be decided is not clear and on this short point, the impugned order does not appear to suffer from any infirmity. 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule 8(1) for excess production of sugar is available only at the time of clearance of such excess production and there is no provision for any advance credit. Yet it remains a fact that the advance credits are given to facilitate the working of the sugar industry and a well laid down procedure has been adopted in consultation with the ISMA (Indian Sugar Mills Association) - a body representing the Sugar Industry - which is working for over two decades. Although I have not been able to lay my hands on the initial order of the Board, a gist of it is available in para 4 of a trade notice based on Board s letter at page 327-A of CENCUS Vol. Ill 1975 which is reproduced below :- Regarding the operation of the rebate scheme is concerned, the benefit of the exemption is being given not as usual in the case of such notifications at the time of clearance of the goods, but an advance credit to the extent of the concession admissible under the notification is given as soon as excess production is determinable, in anticipation of the clearance of such sugar. It is an essential part of the scheme of grant of advance credit that all sugar in respect of which such advance credit is allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he may call for a remand report from the lower authority and then decide the matter. On the question of time bar, he may take into account the observations referred to in para 11 mentioned above. [Order per: G. Sankaran, President]. - 22. I have heard Shri N. Singh, Consultant, for the appellants and Shri L.C. Chakraborty, DR, for the respondent-Collector. 23. The facts of the case have been set out in the order of the referring Bench and do not need to be repeated. 24. On perusal of the Assistant Collector s order dated 28-10-1978 sanctioning the rebate , I do not see any provisionality about it save in two respects : (a) no rebate would be admissible on the quantity of sugar exported under bond without payment of duty out of the quantity in respect of which the rebate was sanctioned and (b) the entire quantity produced during May and June, 1978 should be cleared from the factory and if there was any loss due to any reason, the rebate would be reduced accordingly. Therefore, when the Assistant Collector observed in his Order-in-Original dated 28-12-1979 that the rebate was allowed to be credited on a provisional basis, he was only partially correct. There was nothing in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of limitation would be the starting point when the mistake or the error comes to light. But in making claims for refund before the departmental authority, an assesses is bound within four corners of the Statute and the period of limitation prescribed in the Central Excise Act and the Rules framed thereunder must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the department, the provisions of limitation prescribed in the Act will prevail. It may, however, be open to the department to initiate proceedings in the Civil Court for recovery of the amount due to the department in case when such a remedy is open on the ground that the money received by the assessee was not in the nature of refund. This was the view taken by the Tribunal in a previous decision in the case of Miles India Ltd. v. The Assistant Collector of Customs but it was assailed before the Court. The appeal was withdrawn. This Court observed that the Customs Authorities, acting under the Act, were justified in disallowing the claim for refund as they were bound by the period of limitation provided therefor in the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenged by a special leave petition. Leave was declined in the following words :- We are of the opinion that this is not a fit case in which leave to appeal under Article 136 of the Constitution should be granted. The petitioner s contention is that the rebate granted is sought to be recovered without issue of a notice under Sec. 11-A. The High Court has pointed out that the original grant of rebate could be treated as on a provisional assessment. It is also common ground that the petitioner obtained the rebate originally in pursuance of the trade notice which made it clear that the rebate was being granted in advance purely on a provisional basis and the petitioner also gave an undertaking that he would refund the excess, if any, found later. There is no dispute that the petitioner has received excess rebate. In these circumstances we do not think that the petitioner is entitled to special leave from this Court. The special leave petition is dismissed." This, it must be noted, was on the facts and in the circumstances of the case. In the present case, as we have seen, the original sanction of rebate was not provisional in so far as the present dispute is concerned. The record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under examination, applies fully to the facts of this appeal. That the Bombay High Court was examining a question of demand raised by Revenue, does not make any difference. It is seen that the assessee had executed an undertaking and it was understood between the parties that the sanction of the rebate was provisional. Thus the facts are not similar to those in the present case. Of particular significance is the fact that the rebate was sanctioned only after the assessee executed an undertaking in the Dhampur SugarMills case. It was on the facts and in the circumstances of the case that the Tribunal in the aforesaid case observed: For these reasons, we come to the finding, after considering all the evidence including the correspondence placed before us, that in the peculiar circumstance of this matter where both sides from the beginning, proceeded on the basis that the assessment was provisional, the assessment order and the grant of rebate were provisional. We find so, in spite of our observations in para-9 supra, as the documentary evidence available in this case is too strong to be ignored and the Bombay High Court, examining a similar matter came to conclusions which we c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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