9911796707
TMI Blog1992 (4) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... -1987 for a sum of Rs. 2,33,200. These applications of the respondent were considered by the Assistant Collector of Central Excise, Trichur, Who by order dated 17-7-1987 granted refund of Rs. 12,10,937.40 in respect of item (1) and granted the entire refund of Rs. 233,200 in respect of Item {2). In the same order the Assistant Collector purported to appropriate a sum of Rs. 13,77,398.40 which amount, according to the Department, was due to the .Department in another case from the same party. The Assistant Collector, therefore, appropriated and adjusted die said amount due to the Department out of the aforesaid refund cited supra and after such appropriation granted a sum of Rs. 66,739/-. Thereafter, on 22-9-1987 another order was issued by the Assistant Collector explaining why he granted only a sum of Rs. 12,10,937.40 out of the total refund claim of Rs. 18,46,536 claimed by the respondent in his refund application of 6-5-1987 and why he disallowed the balance. In the above factual background the Department issued a show cause notice on 4-2-1988 purporting to recover the erroneous refund in a sum of Rs. 1,81,640.60 which is now the subject matter in the present appeal. Shri Gregor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriation would arise only after the sanction of the refund. Once in exercise of a statutory power an authority on consideration of a person s refund claim passed an order and sanctioned refund, eao instanto in the party in whose favour refund has been sanctioned gets a vested right to claim the money it is only in such a situation the Department would ever get a right to resort to appropriation, if the same is permissible under law. In the present case the Department also exercised the right of appropriation as set out in the order of the Assistant Collector dated 17-7-1987 and worked out the quantum also. Therefore, in this above factual background the time for recovery of amount erroneously refunded would start only from the date of this order viz, 17-7-1987 in terms of Section 11A(3)(c) of the Act. It would be relevant to note that the subsequent order dated 22-9-1987 referred to in the impugned order is only clarificatory in nature and has not been passed in supersession of the earlier order and, therefore, is inconsequential for purpose of reckoning the period of limitation under Section 11A of the Act. Therefore, in the light of the facts set out above we hold that the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor s order dated 17-7-1987 and the later order dated 22-9-1987 issued by the said authority giving reasons for the sanction of the reduced amount of refund out of their claim was only clarificatory in nature and the time limit, therefore, for recovery should run from 17-7-1987 and not from 22-9-1987. The learned Collector (Appeals) held that the limitation as urged by the respondents should run from 17-7-1987 and accepted their plea that the later order of the Assistant Collector giving reasons for the lower amounts sanctioned was only clarificatory in nature and held the demand as barred by limitation. 7A. The grounds of appeal by the Revenue are as under :- B. The above observation is not correct since the order C.No. V/85/18/32/87 dated 22-9-1987 is the relevant order pertaining to the refund of Rs. 12,10,937.40 and the show cause notice dated 4-2-1988 was issued demanding the erroneous refund of Rs, 1.81 lakhs which was granted vide the above refund order dated 22-9-1987, C. The refund order was issued on 22-9-1987 and the show cause notice pertaining to the refund order was issued on 4-2-1988. Hence the question of time bar does not arise, since the Assistant Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be appropriated by the said authority against another amount due from the respondents. In this background, therefore, the question that arises for consideration is whether the communication dated 17-7-1987 can be taken to be one under which the refund can be said to have been made. The wording used in the Section 11A is that the demand can be raised within six months against a person to whom a refund has been erroneously made and the relevant date for the limatation is the date on which the duty of exicse has been erroneously refunded. The section clearly envisages the actual refund of duty and the Hon ble Supreme Court has clearly held that the issue of a refund order does not constitute the actual refund of duty. The Special Bench of the Tribunal in the case of Ceat Tyres of (I) Ltd. v. Collector of Central Excise, 1983 (13) E.L.T. 954 (CEGAT), relying on the judgment of the Bombay High Court in the case of Vidarbha Mills Barar Ltd. and Others v. Collector of Central Excise, Nagpur, 1979 (4) E.L.T. (J 555), have held that in the absence of any other authority holding a different I view, the words from the date of making the refund under the erstwhile Rule 10 assumed the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order in respect of the refund only later. This later issue of the detailed order does not in any way detract from the legality of the sanction of refund earlier. The later issue of the order dated, 22-9-1987 only gives the respondents an additional benefit from limitation angle for filing an appeal taking 22-9-1987 as the relevant date for filing the appeal. If the authority felt that the letter dated 17-7-1987 was not a sanction Order, then appropriation of the amount communicated therein was not according to law. Then they should have challenged that particular order under Section 35E(2) but without doing that they cannot say, while the letter dated l7-7-l987 was correct so far as the appropriation of the refund amount was concerned, yet the same could not be considered as a proper order so far as the refund of the amount is concerned. As mentioned earlier, issue of the letter dated 22-9-1987 giving reasons for sanctioning lesser amount of refund than claimed only confers the benefit on the respondents for the purpose of limitation for filing the appeal from that date and it does not confer any corresponding right on the Department for the purpose of reckoning the limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
