Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Hindustan Fertilizer Corporation on 10 July, 1986
Equivalent citations: 1986(9)ECC153, 1986ECR213(TRI.-DELHI), 1986(26)ELT575(TRI-DEL)
ORDER
S.D. Jha, Vice-President (J)
1. The question for decision in these appeals by the Collector of Central Excise, Patna - originally a notice under Section 36(2) of Central Excises & Salt Act, 1944 (as it stood at the material time) issued by the Govt. of India, Ministry of Finance proposing to review Order-in-Appeal Nos. 227 & 228/BR/81 dated 31.8.81, is the correctness of the order passed by the Appellate Collector of Central Excise, Calcutta granting respondents' applications dated 1.11.78 and 8.5.79 for refund in terms of relief in excise duty as an incentive to higher production granted under Notification 198/76 dated 16.5.76.
2. Notification No. 198/76 dated 16.5.76 granted 25% relief in central excise duty as an incentive to higher production subject to fulfilment of conditions stipulated therein. Barauni Unit of the respondent was earlier a constituent unit of Fertilizer Corporation of India upto 31.3.78 but on reorganization of Fertilizer Corporation of India, the Unit became a constituent of the newly formed Hindustan Fertilizer Corporation i.e., the respondent with effect from 1.4.78. Respondents claimed that earlier joint and individual declaration was submitted to Co-ordinating Assistant Collector of Central Excise Ludhiana who was nearest to the Nangal Unit of Fertilizer Corporation of India. This Assistant Collector determined base clearances in respect of all the constituent factories of Fertilizer Corporation, of India on 8.5.78. The particulars were communicated on 25.5.78 by the Finance Manager of Nangal Factory to all the constituent factories of the erstwhile Fertilizer Corporation of India. The Coordinating Assistant Collector, Ludhiana also on 12.1.79 communicated to Assistant Collectors of Central Excise having jurisdiction over the constituent factories of erstwhile Fertilizer Corporation of India about the Corporation having exceeded base clearance on 31.12.76 and entitled to claim relief on clearances of fertilizer effected from 1.1.77 during the year 1976-77. Again the Coordinating Assistant Collector similarly communicated on 7.6.79 about base year and clearances having been exceeded from 31.1.78 during the year 1977-78. Respondents on 1.11.78 for the excess clearance of fertilizer during the period 1.1.77 to 31.3.77 made on payment of normal duty applied for refund relying on the abovesaid notification. The refund claimed was Rs. 8,69,683.22 - 25% of the actual duty paid. By another letter dated 27.9.79 the respondents re-calculated their claim and the revised claim was Rs. 7,81,806.69. By another application dated 8.5.79 the respondents filed another similar refund claim for the period 31.1.78 to 31.3.78 in respect of fertilizer cleared on payment of normal duty relying on the abovesaid notification. The Asst. Collector of Central Excise Division Patna by orders dated 15.1.80 and 14.1.80 after following the usual procedure rejected these claims as time barred having been presented beyond six months limitation stipulated in Rule 11 read with Rule 173J of Central Excise Rules, 1944.
3. Aggrieved with the decision the appellant filed appeal to the Appellate Collector of Central Excise, Calcutta. The Appellate Collector of Central Excise, Calcutta by Order-in-Appeal Nos. 227 & 228/BR/81 dated 31.8.81 accepted the respondents claim (appellant before him) that they had filed their refund claim for the first time on 1.11.78 even before the Coordinating Assistant Collector had certified the date they exceeded the base clearance and therefore the refund claim could not be treated as time barred. The Appellate Collector of Central Excise held that while considering the exemption of this nature the date from which entitlement of the appellants to the exemption arises would be the crucial date for counting the time limit under Rule 11 of the Central Excise Rules. With this reasoning he found the claims to be within time and set aside the order of the Assistant Collector with the direction to grant refund. The order was also to apply to the other appeal of the respondent relating to subsequent period as already set out above. Govt. of India then issued review show cause notice proposing to review the order of the Appellate Collector of Central Excise and restore the order of the Assistant Collector. Respondents filed reply to this review show cause notice in which they reiterated the pleas advanced before the Appellate Collector of Central Excise. It was inter alia urged that inherent in the scheme of granting exemption is the position that claim for refund 'or exemption from duty cannot be submitted till base year, quantum of base clearance and date from which clearance had exceeded are determined by the Assistant Collector. Limitation should therefore be computed from the date of issue of orders by the Coordinating Assistant Collector determining the date from which the clearance had exceeded the base clearance. Limitation of time for making claim for refund should be counted from the date of issue of relevant orders by the Coordinating Assistant Collector determining the requirements set out above. This position had been accepted by the Govt. of India. Reliance was also placed on another order dated 26.2.81 passed by the same Appellate Collector. On these grounds they prayed for dropping the notice. In the meanwhile the Tribunal had been set up and the review notice was transferred to the Tribunal to be disposed of an appeal presented before it. To comply with the practice and procedure followed in the Tribunal the appellant filed one more supplementary appeal which is E/177/86-C.
4. At the hearing of the appeal on 7.3.86 Shri A.S. Sundar Rajan, the learned JDR represented the appellant and Shri A.K. Sil, Advocate the respondent. Shri Sundar Rajan relied on a decision of Special Bench 'C' in Collector of Central Excise v. Steel Authority of India where it was held that such claims would be governed by Rule 11 of the Central Excise Rules as it stood at the material time from the date of payment of duty. Shri Sil in his submissions relied on the following decisions :
1. Nagarjuna Steels Limited v. Collector of Central Excise, Hyderabad - 1985 (21) E.L.T. 854 (Tribunal)
2. K.B. Foams Private Ltd. Bangalore v. Collector of Central Excise Bangalore - 1985 (19) ELT 476 (Trib.)
3. George Williamson (Assam) Ltd. v. Collector of Central Excise, Shillong - 1985 (20) E.L.T. 389
4. New Jatiaga Valley Tea Estates Ltd. Calcutta v. Collector of Central Excise, Shillong - (1983 ELT 1274) Sri Sil argued that in view of these decisions at least a small part of the respondents' claim for refund would be within time.
5. As for reliance of the respondent in K.B. Foams Private Ltd. case 1985 (19) ELT 476, it is observed that the decision that the claim was not time barred was given on the peculiar facts of the case. That decision could not be taken as a precedent for the present case. In Nagarjuna Steels Ltd, v. Collector of Central Excise, Hyderabad (supra) in respect of the same notification relying on the Bombay High Court judgment in Universal Drinks Private Limited v. Union of India 1984 (18) ELT 208 (Bombay) it was, inter alia, held that claims for refund of duty made before 6.8.77 would be governed by the provisions of Rule 11 as it stood prior to its amendment on 6.8.77 even if refund was lodged after 6.8.77. Prior to 6.8.77 Rule 11 read with Rule 1733, which would be applicable also in the case of the respondent, provided for a limitation of one year making claim for refund of duty. In, Neelamali Tea (Coffee) Estates & Industries Ltd. Nilgiris v. Collector of Central Excise, Madras (1983 ELT 2426 CEGAT) which was distinguished in Collector of Central Excise v. Steel Authority of India on the ground that in the latter case there was the manufacturer had applied necessary particulars well in advance about eight months prior to start of their excess clearances to the Department, this would constitute staking of the claim and the claim held to have been filed within time. In the instant case it is seen that for duty paid between 31.12.76 to 31.3.77 a period prior to 6.8.77 before amendment of Rule 11 when one year limitation was applicable, the respondents had staked their claim by filing a declaration on 10.2.78, Therefore, claim for refund of duty between 10.2.77 and 31.3.77 in view of the two decisions in Nagarjuna Steels Ltd, and Neelamali Tea (Coffee) Estates & Industries Ltd, (supra) must be held to have been made within time even though the actual refund claim may have been filed on 1.11.78.
6. The other claim presented on 8.5.79 relates-to duty paid between the period 31.1.78 to 31.3.78 i.e., after Rule 11 had been amended on 6.8.77. Filing of declaration on 16.2.79 after six months limitation under the amended rule had expired could not help the respondent and the claim for refund made on 8.5.79 must be held to be time barred.
7. As a result, the respondents' claim for refund to the extent it relates to the period 10.2.77 to 31.3.77 is held within time. It shall be worked out in accordance with law and refunded. Rest of the claim is held to be beyond limitation following the decision, in Steel Authority of India's case (supra).
8. The appeals to the extent the respondents' claim related to 10.2.77 to 31.3.77 are dismissed and for the rest of the claim allowed and this part of the claim held to be beyond limitation and the respondents' claim for this amount dismissed. The impugned orders passed by the Appellate Collector of Central Excise are upheld to the extent they relate to the respondents' claim for refund for the period 10.2.77 to 31.3.77 and for the rest set aside.
9. The appeals are disposed of in the foregoing terms.