Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Metal Box (I) Ltd. on 14 October, 1992
Equivalent citations: 1993(67)ELT593(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. As both the appeals arise from the same impugned order, they are taken up together for disposal as per law.
2. The assessee filed a refund claim on 1-6-1982 for an amount of Rs. 16,81,460.95 P. for duty paid for the period 1-3-1978 to 30-10-1980 on the ground that duty has been paid in excess on Aluminium foil/poly pouch under TI 27(c) of Central Excise Tariff. As the department felt that the refund was time-barred, a show cause notice dated 23-12-1982 was issued calling upon the assessee to explain as to why their refund claim should not be rejected as timebar under Section 11B of the Central Excises and Salt Act, 1944. The assessee in reply dated 14-2-1983 to the show cause notice did not dispute the factual aspect of the case but raised the following grounds -
(i) that to find out the duty payable under the revised classification costing of Aluminium foil was necessary and relied on the ratio of some rulings;
(ii) that the excess duty was paid by them under a mistake of law and in that view of the matter, time limit would be restricted to three years from the date of detection of the mistake; and
(iii) that they had in a previous correspondence in connection with a different case, referred the fact of excess payment and had requested the same reference to be treated as their claim.
3. The learned Assistant Collector, after giving a personal hearing to the assessee, held that the claim for refund has been filed after 18 months from the date of payment of duty and hence, it is time-barred as per Section 11B of Central Excises and Salt Act, 1944. He has observed that the procedure followed by the assessee was fully in keeping with the law and procedure laid down and that the duty was paid as per approved classification list and, therefore, the change brought out in subsequent form could not be constituted as detection of mistake. He has also held that assessee's reference to a previous reference, cannot also be considered as a valid claim inasmuch as, the same was neither in proper form nor addressed to the proper officer in proper context.
4. The Collector, on appeal, has taken a different view inasmuch as, he has held that the refund claim had arisen due to change in classification of the product by the Assistant Collector. The Aluminium foil based laminates and Aluminium foil pouches were held classifiable under Item 27(c) which were reclassified by the assessee under Item 68 in his approval order dated 26-2-1980. On this basis, the assessee had claimed that the duty is paid by them from 1-3-1978 to 30-10-1980 were in excess because they paid duty @ 32% ad valorem plus Rs. 800 per M.T. whereas according to this approved classification list, they were liable to pay duty at 5% ad valorem. The Assistant Collector had rejected the refund claim on the ground of time-bar but the assessee had contended before the Collector that in their reply to show cause notice dated 5-12-1980, they had already mentioned that the reply given by them be treated as a refund claim. The learned Collector however, did not accept this contention and has held that it is not clear as to how the assessee is entitled to refund of duty paid prior to 26-2-1980 as it is only on this date, the Assistant Collector had reclassified their product as chargeable to duty under Item 68 of CET. Therefore, the learned Collector has held that the assessees were entitled for refund only from 26-6-1980 and that they were entitled to refund of duty paid in excess of dutyleviable under Item 68 of CET from that date and not prior to that date and has held that the claim is entertainable for a period 26-2-1980 to 30-10-1980.
5. Both the Revenue and the assessee are aggrieved with this order of the Collector (Appeals). The Appeal No. E/303/85 is the Collector's appeal. In this appeal, the Collector has contended that the assessee paid duty in excess during the period 1-3-1978 to 30-10-1978 but they filed the application for refund with the concerned Assistant Collector on 1-6-1982 and hence the refund application is clearly time-barred having been submitted after expiry of 18 months from the date of last payment of duty. Therefore, the Revenue has contended in this appeal that the learned Collector (Appeals) by admitting the claim pertaining to the period 26-2-1980 to 31-10-1980, referred after expiry of time limit specified in Section 11B of the Act, is without jurisdiction and liable to be set aside.
6. In the Appeal No. E/376/85-B1, the assessee has contended that the order passed by the Assistant Collector on 26-8-1978 regarding the classification of Pouch in form I under Item 27(2) of CET was erroneous and that there was no form statutorily prescribed in lodging the refund claim and the claim for refund by way of letter addressed to the Assistant Collector concerned who was the refunding authority, was the claim for refund. They contended that the mistake in the classification committed by the Assistant Collector concerned was made known to them through the Assistant Collector's letter dated 3-3-1980 refusing the earlier classification in form I submitted for Special Excise duty on 20-4-1978. Therefore, they contended that the period of limitation for refund of duty paid in excess under a mistake of law, shall be three years from the date the mistake was made known to the appellants under the Assistant Collector's letter dated 3-3-1980. Therefore, they say that the order passed by the Assistant Collector was not a speaking order and that the Assistant Collector arbitrarily discarded their first claim for refund made on 26-12-1980 on a flimsy ground that the same had not been submitted in a proper form. They contended that the Collector (Appeals) should have granted their refund claim for the entire period instead of confining from 26-2-1980 i.e. the date of approval of the revision of the classification of the product Pouch.
7. We have heard Shri M.S. Arora, learned D.R. for the Revenue and Ms. Amrita Mitra, learned Advocate for the assessee. Shri Arora contended that the Collector (Appeals) was not justified in remanding the matter for reconsidering the refund claim w.e.f. 26-2-1980 when the fact of the matter is that the refund claim has been filed on 1-6-1982. The claim for refund should be considered only from the date on which it has been filed as per Section 11B of the Act and not from 1980 and, therefore, the finding is patently wrong and not sustainable. He contended that the party's plea that reply to show cause notice dated 26-12-1980 should be taken as the date for refund is also not sustainable as the reply to show cause notice is a specific plea against the charges made by the department and such pleas in absence of a separate independent claim for refund cannot be considered to be a refund claim. He further contended that a refund claim has to be clear and specific with all the details of refund stated in the said application and in case the same is not forthcoming, such a bald reply of the show cause notice, cannot by any stress of imagination, be considered as a refund claim. He contended that it is an undisputed fact that the assessee had filed their refund claim only on 1-6-1982 and in this claim, there was no mention of the earlier reply to the show cause notice which was of a different period and for a lesser amount. The refund claim was for Rs. 16,81,460.95 P. while the department had issued a demand-cum-show cause notice dated 5-12-1980 to the assessee for a sum of Rs. 41,582.60 P. on the ground that the 'pouches' classifiable under Item 68 of CET were liable to 8% ad valorem duty for the period June 1980 to August 1980 as the same had been cleared without payment of duty. The assessee in their reply dated 28-12-1980 had contended that they had cleared aluminium foil with three sides seal and such pouches had been classified under TI 27(c) by paying duty @ 32%. Further in their letter, they had contended that duty on pouches was payable at 8% and not at 32% and, therefore, they had by one line reply stated that "this letter may therefore, be treated as our claim for refund of such excise duty". Pointing out to this reply to the show cause notice, Sh. Arora contended that this could not be considered as a refund claim under Section 11B of the Act and, therefore, the Assistant Collector was right in rejecting the claim. He prayed for setting aside the impugned order.
8. On the other hand, Ms. Mitra learned advocate contended that show cause notice by which duty of Rs. 41,582.60P. under TI 68 @ 8% was claimed, the assessee had contended that they had cleared goods on approved classification list under TI 27(c) at the rate of 32% ad valorem. In the letter, they had pointed out about the excess payment made for clearances during that period and had asked the Assistant Collector to consider their reply as refund application. Hence, this reply to show cause notice is a letter of refund. However, she admitted the factual position that the assessee filed the refund claim by their application dated 1-6-1982, giving all the particulars and documents. She also admitted the factual position that the assessee had neither made any reference to the reply dated 28-12-1980 nor had stated that the refund application was in pursuance of their earlier claim.
9. We have carefully considered the submissions made by both the sides and perused the records. The question that arises for determination is as to whether the assessee is entitled to the refund for the period 1-3-1978 to 30-10-1980 for a sum of Rs. 16,81,460.95 P. claimed by their refund claim application dated 1-6-1982. The assessee has not made out in the refund application that their refund claim is in continuation of the reply to the show cause notice dated 28-10-1980 and in pursuance of that reply, they are giving the details of their claim. In fact no such plea was raised by them before the Assistant Collector. The Assistant Collector had issued a show cause notice dated 23-12-1982 after the receipt of the refund claim calling upon them to show cause as to why their refund claim should not be dismissed as it had been filed beyond six months. The assessee filed their reply dated 14-2-1983. In this reply, they have pointed out that they had in reply to the show cause notice dated 28-12-1980 pointed out about the excess payment and had requested their reply dated 30-10-1980 as a claim for refund and, therefore, the claim was not barred by time. The learned Assistant Collector in his order-in-original has held that the refund application in proper form, was submitted to the proper officer only on 1-6-1982 and, therefore, as per Section 11B of the Act, the time prescribed is only 6 months, the claim was held to be time-barred.
10. The learned Collector (Appeals) in the impugned order has accepted the assessee's plea and has held that the reply to the show cause notice given on 26-12-1980, should be treated as a refund claim. He has also held that the Assistant Collector had reclassified their product as dutiable under Item 68 on 26-2-1980 and the appellants are entitled to a refund of the duty paid in excess of the duty under Item 68 of CET from that date and not before that. He has held that the claim is for the period 1-3-1978 to 30-10-1980 which has restricted to a period from the date of reclassification i.e. from 26-2-1980 to 30-10-1980. The learned Collector has proceeded on the basis of reclassification done by the Assistant Collector on 26-2-1980 and has not taken into consideration the reply made to the show cause notice on 26-12-1980. The learned Collector has held that since there has been a change in the classification of the product of the appellants, it may not be fair to reject the claim on time-bar and, therefore, he remanded the case to the Assistant Collector to reconsider refund claim w.e.f. 26-2-1980.
11. In this appeal, the Revenue are contending that the assessee had submitted their claim for refund for the period 1-3-1978 to 30-10-1980 on 1-6-1982 which was after the expiry of prescribed time limit of 6 months and hence, the Collector was not justified in remanding the case to consider the refund claim from 26-2-1980 to 31-10-1980. The assessee is also aggrieved with this order and in their cross appeal, they have contended that they are entitled to the refund from 1-3-1978 , the date on which they filed the classification list in respect of the product 'Pouch' under Item 27(c). However, as the Assistant Collector had reclassified the same under TI 68, they are entitled for the refund of excess duty paid, as the duty had been paid in excess under a mistake of law and, therefore, the period of limitation will be three years from the date the mistake was made known to them under the Assistant Collector's letter dated 3-3-1980. As can be seen from the facts of this case, the appellants had been paying duty under TI 28(c) and had not preferred any appeal nor they had paid the duty under protest. They also did not file any refund application claiming classification of pouches under TI 68. The wisdom dawned on the assessee at a very late stage. For a moment, a streak of wisdom fell upon them when a show cause notice was issued to them on 5-12-1980 by which a demand of Rs. 41,582.60 P. was demanded for clearance of pouches without payment of duty in respect of clearances made during the period from June 1980 to August 1980. The assessee in reply to this show cause notice had made a reference to the dutyhaving been paid at a higher level and had stated that they are entitled for the refund for the excess duty paid by them and made a reference to the fact that "this letter may, therefore, be treated as our claim for refund of such excess duty". In Para 4(ii) of the reply, however, they did not make any prayer to that effect. In Para 6 of their letter instead, they have stated that on account of their reclassification of vouches, there will be no involvement of short levy or less payment of excise duty and, therefore, they had asked for an opportunity of personal hearing before taking decision in the case. The assessee had slept over this matter to consider to file refund claim in respect of the clearances made by them during the period 1-3-1978 to 30-10-1980 in respect of pouches under TI 27(c). As has been seen, the show cause notice dated 5-12-1980 is for short levy of duty for the period June 1980 to August 1980. The claim for refund in the present case is for a sum of Rs. 16,81,460.95 P. for a period 1-3-1978 to 30-10-1980. Therefore, the contention of the assessee that the earlier reply to the show cause notice is a refund claim is a mis-conceived submission, the reason being that the period and the amount did not tally. It has also to be observed that the refund application dated 1-6-1982 does not refer to this reply at all. This refund application is a fresh application addressed to the Assistant Collector by which they have furnished all the documents and details of the refund for the concerned period. They have also filed RG-23, Part II, PL account, Copy of Form I, Price list and balance sheet etc. Therefore, the assessees have themselves slept over this matter and did not prefer a refund claim on the grounds urged by them as required under Section 11B of the Act. Therefore, the Assistant Collector was fully justified in rejecting their claim as time-barred. The learned Collector has also rightly rejected the reply dated 26-12-1980 to be treated as refund claim. However, he has held that the Assistant collector had reclassified their product dutiable under TI 68 on 26-2-1980 and, therefore, the duty for the period 26-2-1980 to 30-10-1980 is sustainable. The department are contending that the application having been filed on 1-6-1982 is also time-barred and claim for refund even for this period is not sustainable. This ground of the Revenue is sustainable and it has to be upheld.
12. The claim of the assessee that their reply to show cause notice dated 26-12-1980 should be considered as refund claim, is not sustainable as the period and amount do not tally and also that the assessee had not furnished relevant documents and details as required. In the case of Embarkation Headquarters Bombay v. Collector of Customs [1983 (12) E.L.T. 803], the Tribunal has held that refund is liable to be rejected if material documents are not furnished alongwith the claim. This view was also reiterated in the case of C.C.E. v. I.T.C. Ltd., as reported in 1988 (38) E.L.T. 76.
13. In the case of Stewarts and Lloyds of India Ltd., Madras v. Collector of Central Excise, Madras [1985 (22) E.L.T. 805], the Bench has held in Para 7 as under -
"The plea that the provisions of Section 11B(3) would apply to the facts of this case is not acceptable either. The order of the Board is in respect of an appeal from M/s. Stewarts and Lloyds of India Ltd. against order No. 26AA (3) 78-Collr./62/80, dated 14-8-1980 passed by the Collector of Central Excise, Calcutta. The latter order in turn is one dealing with classification of manipulated pipes and tubes manufactured by M/s. Stewarts and Lloyds of India Ltd., 39 Hide Road, Calcutta in respect of Kidderpore and Jhirjirapole works. Though the orders contain certain conclusions regarding the durability or otherwise of the products under particular items of the Tariff, they are proceedings in respect of specific points that have arisen at Calcutta and are relatable thereto. The order of the Board cannot be considered to be of universal application in the sense that any and every person who manufactures similar products anywhere in the country would be entitled to a refund of duty which may have been paid in excess without an application for refund on the strength of this order of the Board. We do not consider that the amplitude of Section 11B(3) is that large."
14. As can be seen from Para 7, mere reclassification done will not automatically entitle the assessee for refund without an application for refund. It means that separate refund application has to be filed as per Section 11B of the Act. Therefore, the Collector (Appeals)'s finding that the order of the Assistant Collector for change of the classification of the product of the appellants is a ground for refund and to reject their claim on time-bar, is not a sustainable finding in view of the case law noted above. In the result, the Revenue's appeal is allowed and the Cross appeal of the assessee is rejected.