1. This is an appeal transferred to the Tribunal under Section 35-P(2) of the Central Excises & Salt Act, 1944. The appellants have taken two main contentions in the appeal against the levy of differential duty demanded in the order of the Assistant Collector dated 16-11-78. The first contention is that the demand is time-barred under Rule 10 and the Asstt. Collector's reliance on Rule 160 to levy the duty is incorrect. In this behalf, they have relied on the Government of India's order No. 195/10/1177/76-CX.V dated 5-3-77 to show that the time-barred amount cannot be enforced. The Second contention is that they have always been given an allowance of 0.5% of the total quantity in bond as loss and the back door method adopted by the department to claim duty on this quantity of allowance from 1-3-73 to 31-12-75 is not justified. On merits also they have relied on the Government of India's order No. 195/5/280-294/79-CX. 5 dated 20-3-81 to show that the Government of India have also conceded the loss to the extent of 0.5% allowed by the department. They have, further, explained that all their R.T. 12s were duly assessed under Rule 173-1, of the Central Excise Rules, 1944 and no objection was raised at the relevant time. The departmental representative has opposed the submissions of the appellant on the ground that the Appellants Collector's order and the Asstt. Collector's order are correct. The quantity subjected to levy of duty has to be treated as a loss in terms of Rule 160 and duty has been correctly demanded by the Assistant Collector.
2. We have examined the submissions on both the sides. While we agree that the demands have been issued for losses covered by Rule 160 of the Central Excise Rules, the demand cannot be sustained irrespective of the time limit prescribed under Rule 10 read with Rule 173-J as in existence at that time. The demand is accordingly clearly time-barred and is not enforceable. In view of the facts, we set aside the orders of the lower authorities and direct that the consequential relief be given to the appellants.