Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Nagammai Cotton Mills (P) Ltd. on 5 May, 2000
Equivalent citations: 2000(92)ECR670(TRI.-CHENNAI), 2001(136)ELT883(TRI-CHENNAI)
ORDER V.K. Ashtana, Member (T)
1. The short issue in this Revenue appeal is that the learned Collector (Appeals) in his order in appeal dated 13.11.1997 has treated the basic duty paid by the present respondents as deposit of duty and not excess duty erroneously paid and has therefore held that the time limit under Section 35B for claiming refund beyond six months from the date of payment of duty would not be applicable.
2. The learned DR submits that the respondents paid excess duty of Rs. 79,781/- and debited the same as excess basic excise duty though in terms of Notification 49/85 the total duty payable should have been apportioned between BED and AED in the ratio of 110 :15. The respondents had thereafter paid AED in this ratio and had thereafter claimed refund of Rs. 79,871/-. This refund claim was considered by the original authority and an amount of Rs. 61,641.10 was sanctioned but further amount of Rs. 18,229.90 was denied as hit by time bar under Section 11B. The respondents appeal was considered on de novo basis by the Collector (Appeals) under direction from the High Court of Madras and thereafter in the impugned order in appeal the Collector (Appeals) has held that the said amount of Rs. 79,871/- was in effect not duty paid correctly but additional duty due to mistake of law and therefore time limit would not apply.
3. The learned DR submits this is not the correct position in law as it would negate the very concept of the provisions of Section 11B. Once the duty amount is debited either in the PLA or in the RG 23A part II it cannot be regarded as deposit of duty but it is to be regarded as duty paid. According to Section 11B, even if duty is excess paid erroneously this six months time limit is attracted. Therefore the order impugned needs to be set aside and the order in original needs to be restored.
4. The learned Counsel submits that the respondents had paid additional excise duty in addition to the basic excise duty already paid in excess. Therefore, in effect, the Revenue had recovered more duty than was legally due. Since excess duty was paid under a mistake of law, hence the time limit would not be applied and the order in appeal is hence correct. He also cites the decision of the High Court of Calcutta in the case of Nipha Machinery Manufacturing Pvt. Ltd. as in wherein it had been held by the High Court that the Govt. was free to return the excess duty paid in their administrative capacity. He, therefore, submits that there is no merit in the Revenue appeal and therefore, the same may be dismissed. He also submits that since the amount involved is less than Rs. 50,000/-, therefore, the Revenue appeal also merits rejection under the proviso to Section 35B.
5. I have considered the submissions and records of the case. I find that the respondents had paid excess amount of Rs. 79,871/- as basic excise duty but had not paid initially any sums as additional excise duty in terms of Notification No. 49/85-CE. Later on the Revenue pointed out to the respondents to deposit the correct amount of additional excise duty and claim refund of the excess amount deposited as basic excise duty. However, part of this refund claim i.e. Rs. 18,229.90 was rejected by the jurisdictional Assistant Collector on the ground that it was hit by limitation of six months as contained in Section 11B. I find that the order impugned is not legally correct in holding that the duty deposited in excess of the amount of actual deposit in terms of the said Notification can be treated as deposit of duty. At best it would be duty paid in excess erroneously. When this is so, then the provisions of Section 11B which prescribes time limit of six months for claiming refund of such duty would not be correct to be ignored or brushed aside on the ground that the amount was merely deposited and not duty paid. Therefore, I find there is merit in the Revenue appeal. I have considered the judgment of the Hon'ble Calcutta High Court in the case of Nipha Machinery Manufacturing Pvt. Ltd. (supra). The Hon'ble High Court has not given ruling to the effect that the limitation under Section 11B would not be applicable, but has merely stated that Revenue authorities were free to make return of the excess amount in their administrative capacity. In this case, the Revenue authorities did not choose to make such return in their administrative capacity and instead the Revenue seeks enforcement of the six months time limit under Section 11B. Therefore, the said judgment of the Calcutta High Court does not help the case of the respondents.
6. I also find that normally the Tribunal is not resorting to the proviso to Section 35B suo motu and reject the appeal when the amount involved is less than Rs. 50,000/-. Therefore, in this case also the said view is required to be taken particularly because there has been some miscarriage of justice in the impugned order and the Revenue cannot be made to suffer on this account. Hence the Revenue appeal is allowed and the order in appeal set aside.
(Dictated and pronounced in open Court).