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K.B. Foams Private Ltd. Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1985)(19)ELT476TriDel
AppellantK.B. Foams Private Ltd.
RespondentCollector of Central Excise
Excerpt:
.....refund of rs. 29,608.34 being the excess duty paid by them on the clearance in excess of the base clearance for the year 1976-77 and 1977-78. the claim for refund for the period 20-9-1977 to 29-11- 1977 amounting to rs. 5,555.12 was held by the assistant collector to be barred by time since the claim was made on 4-5-1978.the appellate collector felt that the six months' period should be reckoned with reference to the date of payment of duty and not with reference to the date of communication of the approval of the base clearance by the concerned assistant collector.3. mr. daya sagar appearing for the appellants submitted that the normal duty payable could be known only when the quantity of the base clearance was communicated. the base clearance was communicated to the appellants on.....
Judgment:
1. This is a revision petition filed before the Government of India which, on transfer, is being treated as an appeal. The Appellate Collector, Madras, in his order dated 19-12-1980, confirmed the orders of the Assistant Collector of Central Excise, Bangalore dated 14-7-1980.

2. The Appellants claimed refund of Rs. 29,608.34 being the excess duty paid by them on the clearance in excess of the base clearance for the year 1976-77 and 1977-78. The claim for refund for the period 20-9-1977 to 29-11- 1977 amounting to Rs. 5,555.12 was held by the Assistant Collector to be barred by time since the claim was made on 4-5-1978.

The Appellate Collector felt that the six months' period should be reckoned with reference to the date of payment of duty and not with reference to the date of communication of the approval of the base clearance by the concerned Assistant Collector.

3. Mr. Daya Sagar appearing for the appellants submitted that the normal duty payable could be known only when the quantity of the base clearance was communicated. The base clearance was communicated to the appellants on 18-9-1976. But in 1977, it was represented to them that the base clearance originally fixed was incorrect and they were asked to submit a fresh declaration under Notification No. 198 of 1976. On 4-10-1977 the fact of crossing the base clearance was intimated to the department. A fresh declaration was filed on 14-10-1977. The Assistant Collector approved it on 12-4-1978. It was returned to the Appellants.

Mr. Daya Sagar pointed out that the letter dated 4-10-1977 must be treated as a refund application inasmuch as the appellants had made a claim for refund in that letter. Even if 12-4-1978 is taken as the date, the claim should not be barred by time. The fresh declaration was approved on 12-4-1978 and hence that should be the starting point of limitation. The claim was submitted on 4-5-1978. He also relied on the ruling reported in 1983-E.L.T.-2426 to make out that the payment need not be under protest where the desire to avail exemption had been set out. The learned Consultant relied on the rulings reported in 1978-E.L.T.-416 (SC) {Assistant Collector of Central Excise, Calcutta v. National Tobacco Co. of India Ltd.)E.L.T.-1274 (New Jatiaga Valley Tea Estates Ltd., Calcutta v. Collector of Central Excise, ShillongE.L.T.-568 (Krishna Lal Thirani & Co. Ltd. and Anr. v.Collector of Central Excise and Ors; and the decision of Government of India as reported in 1982-E.L.T.-737 (in respect of Nahorjan Tea Co.

Ltd.).

4. Shri A. K. Jain, S.D.R. argued that the refund application should be filed within six months under Rule 11(4). In this case, the party only wanted the base clearance to be confirmed by his letter even though the base clearance was fixed even during 1976. If any particular remedy is prescribed under the statute, the party should have availed of it and applied for refund within six months. He relied on the ruling reported in A.I.R. 1983-603-SC Titaghur Paper Mills Co. Ltd. and Anr. v. State of Orissa and Anr., wherein it was held that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of.

The letter dated 4-10-1977 cannot be deemed to be an application for refund. There was no payment under protest.

5. The learned Consultant also stated that the crucial date for refund claim is the date on which the declaration was filed and not the date of payment of duty. That was also a case where the Assistant Collector took more than a years time to determine base clearance.

6. In this case the appellants are eligible to relief under Notification No. 198/76 dated 16-6-1976. This Notification inter-alia, contemplates the fixation of base clearance in order to accord the relief. The appellants were informed by the Assistant Collector by his letter dated 13-9-1976 that they were entitled to avail the concession on the quantity cleared in excess of the base clearance of 35,848 Kgs.

On 4-10-1977 the Assistant Collector was intimated by the appellants that they had reached the base clearance on 13-9-1977. It was also stated therein that a part of the goods cleared under gate pass No. 458 dated 13-9-1977 and the subsequent clearances were subject to levy of concessional duty in terms of the Assistant Collector's communication of 13-9-1976. They also requested the authorities to confirm that the concessional duty was applicable in respect of the clearances made from 13-9-1977 onwards, so as to enable them to adjust the excess paid during September 1977 in the RT. 12 to be submitted by them. We are not impressed with the arguments of Mr. Jain that this letter should be ignored. No doubt the refund application is not in the prescribed form.

Nevertheless, we are not inclined to reject it as improper. Since the proforma is merely advisory and in the absence of any Rule making it is mandatory to submit a refund claim in a prescribed form, we are of the opinion that the refund claim should not be rejected. In 1983- E.L.T.-1.274, it was held by the Tribunal that when the assessee submitted the prescribed declaration, it had to be inferred that the assessee had staked the claim for the benefit of the Notification.

There is also another factor which should be adverted to. The appellants' contention is that after their intimation of crossing the date, they were informed that the previous approval was accorded wrongly and a fresh declaration was sought. The documents filed show that a fresh declaration was given on 14-10-1977. If there was no necessity for a fresh declaration, the department should have returned the same an superfluous. Apart from this, we find that the Assistant Collector had approved the same on 12-4-1978. This factor lends support to the contention of the appellants that they were asked to give a fresh declaration. We also notice that there is a slight variation of the figure relating to approved base clearance. Refund claim was submitted on 4-5-1978. The subsequent claim must be deemed to be the renewal of the earlier claim made on 4-10-1977. In any event, since the declaration was approved on 12-4-1978 that should be taken as the starting point for the purpose of determining the eligibility for the relief accorded under the notification. In the Bangalore Collectorate Trade Notice No- 180/76 dated 29-6-1976 paragraph 18 reads as follows : - "Every manufacturer who intends to avail of this scheme should make a declaration in the annexed form (Annexure A). After the declaration is approved by the proper officer? the clearances in excess of the base clearance, will be entitled for exemption." The eligibility for the exemption is available only after the declaration was approved by the proper officer. Of course the base clearance once fixed cannot be changed during the currency of the scheme. But, in this, case, since some mathematical inaccuracies were pointed out. The Appellants had to give a fresh declaration and, on the facts of the present case, we are of the view that the refund claim has been preferred in time. The lower authorities have rejected the claim on the ground that no refund claim could be entertained after the expiry of six months from the date of payment of duty. As the question of refund in the present case depended on the fixation of base clearance, the ratio of the Tribunal's decision reported in 1983 E.L.T.2426 (Neelamalai Tea/Coffee Estates and Industries Ltd., Nilgiris v.Collector of Central Excise, Madras), applies. The impugned order is set aside and the appeal is allowed.

1. The letter dated 4-10-1977 written by M/s. K.B. Foams asks the Assistant Collector of Central Excise, Bangalore to confirm if concessional duty can be availed for clearances from 13-9-1977 including G.P. 458 so as to enable them to adjust the excess duty paid by them during Sep. '77 in the RT 12 to be submitted. They wanted this confirmation because then they would be able to change concessional duty in further gate passes.

2. The factory took what must be called a wise step because (1) the central excise are liable to suddenly reverse everything and tell the factory it would not be entitled to the free clearances it wants and (2) if it is later told it was not entitled to the concessional clearances, it will not be able to recover the duty from the customer.

Not only will it suffer a loss when central excise demands the reimbursement of the amount it will say was short paid, but may also incur penalties - not very inviting prospects. The factory also asked if it could adjust the excess duty paid during September, 1977-a clear intimation that more duty than was due had been paid, and needed to be made good. It may be that adjustment as asked by the factory could not be permitted, but there can be no doubt that restitution of the excess duty was asked for. There is no question but that a claim was staked out, and the reasons and nature of the claim presented for the tax authority to see and examine. It is not easy to see why this cannot constitute a claim of refund.

3. The appeal ought to be allowed and I allow it as my two learned brothers have done.


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