1. This appeal relates to a claim of the respondents for refund of excise duty paid by them on clearances of tea during the financial year 1977-78. It is the contention of the respondents that they were entitled to the 25% duty relief under Notification No. 198/76-CE dated 16.3.1976. Their claim was rejected by the Assistant Collector. In appeal the Appellate Collector of Central Excise, Calcutta allowed their claim. Thereafter the Central Government of India initiated revisional proceedings under Section 36(2) of the Central Excises and Salt Act (as then in force), which proceedings are now to be continued before us as an appeal filed by the Collector.
2. According to the show cause notice dated 5.1.1982, the following are the relevant dates:10.6.1977 to 11.3.1978 Clearances on payment of duty.08.1.1979 Declaration and application for fixing base clearances.31.3.1979 Refund application received by the Superintendent of Central03.5.1979 Application received in the office of the Asstt. Collector.
It was, therefore, contended in the show cause notice that the respondents had not within six months of respective payment of duty filed their refund claim or even the application for fixing the base clearance. It was, therefore, indicated that the Appellate Collector's order was not correct, and it was proposed to set it aside.
3. At the outset, Sri Guha, for the respondents, submitted that the application and declaration for fixing the base clearance was actually made by the respondents in their letter dated 2.6.1978. In the department's letter dated 6.3.1979 the base clearance had been determined and communicated to them. Therefore, it was not correct to say, as was done in the show cause notice, that their application and declaration had been made only on 8.1.79. When it was pointed out to Sri Guha that they had themselves, in para 5 of their reply dated 6.6.1980 to the show cause notice of the Assistant Collector, given this date, Sri Guha submitted that this was due to error and that the correct date was 2.6.1978 as already stated by him. Sri Guha also referred to the copy of their letter dated 2.6.1978 in their paper book.
4. Sri Tayal, arguing for the appellant Collector, fairly stated that if it was found on verification that the declaration-cum-application for fixation of base clearance of the respondents had in fact been received on or about 2.6.1978, that date could be taken as the date of making the refund application, following the Tribunal's decision in a large number of similar cases, starting with the case of M/s.
Neelamalai Tea/Coffee Estate and Industries Ltd. 1983 ELT 2426. From the statement of clearances on payment of duty furnished by the respondents, it appears that they had exceeded their base clearances with effect from 15.11.1977, and the excess payment of duty would have started only from that date. Taking a period of six months prior to the receipt of the letter dated 2.6.1978, it would follow that excess payments from around 2 12.1977 would be covered by the refund application as within time. Earlier to this date the claim would still be time-barred and liable to rejection.
5. Replying to Sri Tayal, Sri Guha relied on the order of the Tribunal in the case of K.B. Foams Private Limited v. Collector of Central Excise, Bangalore 1984 ECR 2429. According to him another Bench of the Tribunal had in that case held that the time limit would run from the date of approval of the declaration i.e. date of fixation of the base clearances. In the present case the approval was on 5.3.1979. Since their refund application was made on 31.3.1979, that is, well within six months from 5.3.1979, it should be deemed to be within time for the entire period.
6. In reply, Sri Tayal submitted that the decision cited by Sri Guha was with reference to the peculiar circumstances of that case, where there had been an earlier application and determination of base clearances, followed by an amendment. It could not be taken as laying down a general principle. The present case was on all fours with a large number of cases relating to tea which have been decided by the Tribunal, and where the date of filing of the application and declaration had been taken as the relevant date.
7. We have carefully considered the submissions of both sides. The show cause notice of the Central Government makes no reference to the application dated 2.6.1978, although this has been mentioned in the reply to the Assistant Collector's show cause notice. There should be no difficulty in verifying from the Collectorate records whether such an application was filed.
8. Assuming that the application was filed, this case would be squarely covered by our decisions in the case of Neelamalai Tea Company, and other similar cases. This means that, assuming that the letter dated 2.6.1978 was received by the Central Excise authorities round about that date, their claim would be within time except for a period of about three weeks from 15.11.77. We have taken note of the other decision cited by Sri Guha, but on a careful consideration we do not find that it would advance his case. That decision was with reference to manufacturers of some other commodity (as seen from name of the appellants) and had pertained to Bangalore Collectorate. The facts there were quite involved and peculiar. There was an original declaration, which was followed by a communication of fixation of the base clearance. Subsequently the appellants in that case were informed that the base clearance originally fixed was incorrect and they were asked to submit a fresh declaration. A fresh declaration was made and it was also approved after about six months. In the meantime the appellants had some other correspondence with the department.
Ultimately, however, their refund application was held as not within time. It is in the light of these circumstances and taking into account the specific wording of a trade notice issued by the Bangalore Collectorate that the Tribunal had also held that on the facts of the present case, we are of the view that the refund claim has been preferre in time (emphasis added). Thus the decision was purely with reference to the facts of that case. That the Bench had no intention of laying down of fresh rule would be abundantly clear from the fact that two sentences late a they have clearly added that the ratio of the Tribunal's decision reported 1983 ELT 2426 Neelamalai Tea/Coffee Estate and Industries (Limited) appliesn We have already indicated that the ratio of that decision had taken into. account the date of application and declaration for fixation of base clearances We do not therefore accept Sri Guha's argument that the Tribunal's order in the case of K.B. Foams Private Limited should be read in the manner he wishes it to be, i.e. as indicating that limitation would start to run from 5.3.1979 in the present case.
9 Shri Guha also filed a copy of Order No. 1295/81 dated 27.4.1981 of the Government of India on a revision application of the Cement Corporation of India Limited with reference to the same notification.
In that case the Government of India held that the limitation of time for a refund application would apply from the date the co-ordinating Assistant Collector determined the base clearances and quantified the rebate to be granted. However, with all respect to the then revisional authority, we cannot persuade ourselves to follow that decision. Rule 11(as it stood at the relevant time) is very clear that limitation starts running when duty is paid (subject to the exceptions laid down in the rule itself) and stops when an application for refund is made While there could be some flexibility in interpreting when an application for refund shall be deemed to have been made, there is very little scope for flexibility in deciding when duty was paid. The decision of the Tribunal in the Neelamalai case was on the former and not on the latter aspect. With due respect, the interpretation which is implicit in the Government of India order dated 27.4.1981, equating the date of fixation of the base clearances with the date of payment of duty, does not commend itself to us For this reason apart from the fact that the previous decision of the Tribunal itself in the 'Neelamalai case is binding on us, we propose to follow that decision, (Incidentally, the application of the principle adopted in that case would have led to an equally favourable result to the assessees in the Cement Corporation case).
10 In the result, we are deciding this case following the principle adopted by the Tribunal in the Neelamalai case and followed in subsequent leases We accordingly direct that, if on verification of the records of the Central Excise authorities it is found that the respondents had in fact submitted an application and declaration dated 2.6.1978, their claim for refund as due in terms of Notification No.198/76-CE dated 16.3.1976 shall be treated as within time for a period of six months prior to the date of receipt of the said application and declaration. The appeal is allowed to this extent only and is otherwise rejected.Sd/- V.T. Kaghavachari Sd/- D.N. Lal Sd/- S. VenkatesanMember (Judicial) Member (Technical) Senior Vice-President