1. As a common point at issue is involved in these two appeals and they were argued together by the same advocates, they are being disposed of by this common order.
2. Appellant No. 1 owned two tea factories and appellant No. 2 owned three tea factories. Both the appellants were entitled to the concessional rate of duty on excess clearances of tea in terms of exemption Notification No. 198/76-C.E., dated 16-6-76, commonly known as the incentive rebate scheme for higher production. Their base year as well as base year clearances had been duly approved by the Assistant Collector. During October, 1978, the two appellants expected to cross the base year figure. They informed the Department of this and after taking the approval of the Central Excise authorities, they started availing of the concessional rate for their clearances of tea in excess of their approved base year figures. Eight to nine months later, the authorities informed them that individual tea factories of the manufacturer, and not the manufacturer as a whole, must exceed the base year figure. The Department directed the two appellants to pay back the concession availed of by them in respect of the individual factories in which there was a short-fall in clearances compared to the base year and to claim refund of the corresponding amount in respect of their factory in which there was excess clearance. The two appellants complied with the Department's direction. But when they applied for refund of the amount equivalent to what they had earlier paid back to the Department, the lower authorities rejected their claim as time-barred in spite of the fact that they had lodged their refund claim within two months of paying back the money to the Department.
3. During the hearing before us, the appellants maintained that the concession in terms of the aforesaid notification was admissible to a manufacturer as a whole as already held by this Bench in its order No.773/1983-D, dated 20-12-83 passed in an other appeal No. 100/81-D of M/s. Namdang Tea Company. They also stated that they promptly paid back the money to the Department because of the peremptory directive from the Department and soon thereafter claimed refund of the corresponding amount, again as per the Department's letter. They pleaded that in the circumstances their claim could not be rejected as time-barred. The Department's representative stated that each tea factory was a distinct entity and it was licensed separately under the Central Excises Act and Rules and that, therefore, the action of the Department was correct.
4. We have carefully considered the matter. We find that exemption Notification No. 198/76-C.E., dated 16-6-76 gave the concession to the specified goods "cleared from one or more factories in excess of the base clearances by or on behalf of a manufacturer". The appellants are, therefore, right in saying that excess clearances should have been reckoned in respect of the manufacturer as a whole and not in respect of his individual factories. The contrary view taken by the authorities and their action in asking the appellants to pay back the amount of concession in respect of their individual factories having a short-fall vis-a-vis the base year clearances were not correct. The appellants had correctly availed of the concession after taking approval of the Department. Yet, they paid back the money when compelled to do so by the Department. They applied for the corresponding refund quite promptly thereafter within one to two months of paying back the money.
Since the time-limit for refund under Rule 11 of the Central Excise Rules, 1944 was six months, the refund claim cannot be held as time-barred. The lower authorities were not correct in reckoning the time-limit from the original duty payment from October, 1978 onwards because the cause for the refund claim arose only after the second payment (in compliance with the Department's directive) in 1979. Thus, there was no justification for the Department's action either from the point of view of law or equity. We hold that the refund claims of the two appellants were not time-barred and allow their appeals accordingly.