1. The appellants were sanctioned refund of Central Excise duty amounting to Rs. 1,88,080/- by the Assistant Collector. The refund was paid to them on 26-6-1973 through a credit entry in their Personal Ledger Account. The refund was on account of the partial exemption from duty on sugar in terms of Notification No. 203/72-C.E., dated 28-9-1972 (commonly known as incentive rebate on excess production of sugar).
Subsequently, the Assistant Collector felt that the refund had been wrongly granted. He issued a show cause notice on 19-1-1977 calling upon the appellants as to why the said amount should not be recovered from them under Rule 10A of the Central Excise Rules, 1944. The appellants contested the show cause notice, inter alia, on the ground that Rule 10 and not Rule 10A was applicable to the facts of the case and that the demand was time barred under Rule 10. The Assistant Collector held that Rule 10 applied to recoveries of erroneous refund but that this was a case of erroneous rebate and, secondly, that Rule 10 applied to refunds paid in cash while in the present case rebate had been granted to the appellants through a credit entry in their PLA.Accordingly, he held that Rule 10A, which at that time contained no time limit, had been correctly invoked. The Appellate Collector agreed with the Assistant Collector holding that this was not case of erroneous refund.
2. Before us, the appellants have taken the issue of time bar as their first plea. They relied on the authority of this Tribunal's order in the case of Ceat Tyres of India Ltd. v. Collector of Central Excise and Customs, Bombay reported at 1983 (13) E.L.T. 954 (Tri.). The Department's representative when called upon to make comments on this plea of the appellants, stated that he had no submissions to make.
3. We have carefully considered the matter. The so-called rebate granted to the appellants was nothing but refund of a portion of the Central Excise duty paid by them on sugar and to which they became entitled by virtue of an Exemption Notification. Rule 10 specifically applied to recoveries of erroneous refund. The Rule made no distinction between refund granted in cash or through a credit entry in the Personal Ledger Account. In either case, it was a refund of the duty.
The Department has not placed before us any material to show that Rule 10A could be attracted in the facts of this case. As this was clearly a case of erroneous refund which attracted the time bar of Rule 10, we hold that the show cause notice issued to the appellants was time barred. In view of this finding, we do not consider it necessary to go into the merits of the case. The appeal is allowed with consequential relief to the appellants.