1. This case relates to a claim for refund of duty paid by the appellants on certain quantities of sugar produced and cleared by them, in terms of Notification No 146/74-C.E., dated 12-10-1974. The matter was partly heard on 12-121984. The hearing was resumed and completed on 25-1-1985, when certain clarifications furnished by Shri H.L. Verma, the learned representative of the Department, were also taken into consideration.
2. Some relevant dates and facts relating to the case, as agreed on by both sides, are given below : 19-6-1975 The appellants filed their "Excise rebate claim on excess production of sugar during the period December 74 to September 75".
The amount of rebate as calculated and claimed by them came to Rs. 4,04,250.57P. 4-9-1975 On the above application the Assistant Collector passed his order authorising them to take credit of Rs. 3,98,953.43P as basic duty.
28-3-1976/3-4-1976 The appellants addressed a further letter dated 28-3-1976 to the Appellate Collector submitting a revised claim for rebate of a sum of Rs. 8,66,123.76P. An "advance copy" of this letter was received in the office of the Assistant Collector on 3-4-1976. The copy forwarded through the Superintendent of Central Excise was received in the office of the Assistant Collector on 24-5-1976.
10-2-1978 The Assistant Collector replied to the appellants rejecting the interpretation on the basis of which the revised claim had been made.
19-4-1978 An appeal was made to the Appellate Collector of Central Excise, New Delhi, against the Assistant Collector's order.
11-10-1982 The Appellate Collector held that the revised claim dated 28-3-1976 was barred by limitation. He further held that the Assistant Collector had already become functus officio on passing his first order and was not competent to reconsider or revise that order ; and that the revised claim and the Assistant Collector's order dated 10-2-1978 were ab initio null and void. He directed that the appeal be returned to the appellants.
It is against this order of the Appellate Collector that the present appeal has been filed.
3. On behalf of the appellants, their learned advocate, Shri Shanti Bhushan submitted that the appellants had a clear case on merits, Their revised claim was on the basis that the slabs for the purpose of granting rebate under notification should calculated with reference to percentages of the excess production and not percentages of the average production. This stand had been upheld by various High Courts, and the view taken buy them had been confirmed by the Supreme Court, The Tribunal had also passed a number of orders accepting this view-for example the orders in the cases o f Bhopal Sugar Industries Limited (1983 E.C.R 1880-D(CEGAT) and Deccan Sugar and Abkari Company Limited 1983 E.L.T. 2430 (CEGAT). Therefore, the appellant were clearly entitled to the refund claimed.
4. The Assistant Collector had rejected their claim on the basis of the contrary view of law and his order was, therefore, not sustainable. The Appellate Collector had taken a different stand and had rejected their appeal on two grounds. One was that the claim was time-barred, having been filed much beyond the prescribed time limit of three months. The other was that the Assistant Collector had become functus officio and could not revise his earlier order. Shri Shanti Bhushan submitted that the Appellate Collector had gone wrong on both these issues.
5. As regards the first ground, Shri shanti Bhushan submitted that under Rule 173J, as it stood at the material time, the time limit for filling a refund claim was one year and not three months as assumed by the Appellate Collector. He submitted that the sugar which was the subject matter of the revised claim and which had been cleared without availing of the rebate, had been cleared from October '75 onwards, while the revised claim had been submitted on 28-3-1976 (received on 3-4-1976). Therefore, the claim must be deemed to have been submitted well within the then applicable time limit of one year.
6. As regards the second finding of the Appellate Collector, Shri Shanti Bhushan submitted that this was also not correct. The first letter of 19-6-1975 only sought determination of the eligibility of the appellants to the rebate and could not be considered as a refund claim, since at that point of time no excess duty had been paid. It was only from October '75, which was even after the first order of the Assistant Collector, that the excess production started being cleared and excess duty started being paid. It was only the second claim of 28-3-1976 that could be regarded as a refund claim under Rule 11 of the Central Excise Rules. Rule 11, as it then stood, entitled an assessee to claim refund of any duty on the ground that it had been paid through inadvertence, error or misconstruction. This provision squarely covered the present case, since the appellants had been under the mistaken impression that in terms of Notification No. 146/74 the rebate had to be calculated on percentages of average production and not the excess production. When they came to know the correct interpretation, the appellants had made a claim for the refund of the duty which in the meantime had been paid in excess. Since the claim had been made within the time limit specified, they were entitled to have it allowed. Shri Shanti Bhushan submitted that there was no provision in the Central Excises and Salt Act or the Central Excise Rules that a second claim or a revised claim could not be filed within the prescribed time limit. (When it was pointed out to Shri Shanti Bhushan that Rule 11 referred to "an application", that is, in the singular, he submitted that this could not be taken to mean that only a single application could be submitted).
7. As regards the point that the Assistant Collector became functus officio after passing his first order, and that in order to consider the revised claim he would have had to revise his earlier order, Shri Shanti Bhushan submitted that the question of revision was not involved in this case. That question could arise only when a question had been gone into by an authority for decision and had been decided by him. In the present case the question of interpretation of Notification No.146/74 had not been posed to the Assistant Collector when he passed his first order, nor had he gone into it. It could not, therefore, be said that there had been any adjudication of that issue at the stage of passing the first order. Therefore, consideration of the appellants' revised claim would not involve a review of the first order.
8. Replying for the Department, Shri Verma stated that he had not been able to verify the claim of the appellants that clearances of the excess production to which the refund claim pertain started only from October '75. However, subject to confirmation of this point, he would proceed on the assumption that this was the position.
9. Shri Verma also stated that as regards the interpretation of Notification No. 146/74, dated 12-10-1974, on which the Tribunal had taken a view upholding the claim of the assessees, he would not address any arguments, since the issue stood concluded so far as the Tribunal was concerned. He should not, however, be taken as conceding the correctness of that interpretation.
10. Proceeding to the facts of the case, Shri Verma submitted that in their claim dated 19-6-1975 the appellants had limited themselves to claim a refund of Rs. 4,04,250.57P. Their claim had been duly considered by the Assistant, Collector who had sanctioned a rebate of almost that amount. Evidently the appellants had no grievance at that stage, as they did not go in appeal. The further claim in their letter dated 28-3-1976 was based on an interpretation of the notification which was different from the one adopted both by themselves and by the Assistant Collector, and the re-working of the amount of rebate (and consequent refund) on the basis of this interpretation would clearly have amounted to the revision of the order dated 4-9-1975 passed by the Assistant Collector. Shri Verma strongly urged that, as held by the Appellate Collector, the Assistant Collector became functus officio after passing his order of 4-9-1975 and was not competent to grant any further rebate or refund based on a different interpretation of the notification. In this connection he referred to judgment of that Madras High Court in the case of Indian Organic Chemicals Ltd. v. Union of India and Ors. (1983 E.L.T. 34 Mad.). In that case the Hon'ble High Court had observed as follows :- "It is now settled law that there is no inherent power of review in an authority while acting judicially or quasi-judicially. The power of review must be conferred expressely or by necessary implication by the provisions of the statute. The power of the authorities under the Central Excises and Salt Act to review their earlier order has been considered by me in Madras Rubber Factory Ltd. v. Asst.
Collector of Central Excise, Madras and Anr. 1981 E.L.T. 565 wherein it has been held that the power of review must be conferred expressly or by necessary implication by the provisions of a statute and that the Central Excises and Salt Act and the rules made thereunder do not confer upon the authorities any power of review of their own order. It must therefore follow that the respondents have no power to review the earlier order granting unconditional approval to the classification lists and treating them as a provisional order under rule 9-B long afterwards. The original approval granted unconditional right to the petitioners to clear their goods without payment of any duty by virtue of Notification No. 37/78. The two impugned orders imperil their right by rendering it provisional and making the original assessment subject to a further assessment. The impugned orders dated 16-11-1979 and 26-11-1979 are in substance and effect orders reviewing the earlier order of approval of the classification lists. I am therefore of the view that the said two orders are liable to be quashed on that sole ground. If the respondents have no power to review the earlier order of approval and treat them as provisional under rule 9-B, then the third impugned communication calling upon the petitioners to execute a bond for Rs. 63,00,000/- with a solvent surety must also fall to the ground, as that only can be demanded when a provisional assessment is made under rule 9-B." This would support his argument that the Assistant Collector was not competent to review his order as desired by the appellants, and the finding of the Appellate Collector in this regard was correct and should be sustained.
11. With reference to the argument of Shri Shanti Bhushan that the first order of the Assistant Collector was in fact not an order sanctioning a refund, and that only one refund claim had been filed, namely, the one dated 28-3-1976, and therefore in considering that refund claim there was no question of the Assistant Collector reviewing his order, Shri Verma submitted that considering and sanctioning the refund claim would necessarily have involved the Assistant Collector taking a view different from the one he had taken earlier, and therefore must necessarily involve a review of his earlier order. He further submitted that an assesses could not be allowed to submit his refund claim in instalments, when he was in a position to claim the entire amount at once.
12. A suggestion was made by Shri Tayal, also appearing for the respondent Collector, that the proper authority to modify the Assistant Collector's order was the Appellate Collector. Therefore, if the appellants felt they should have been sanctioned a rebate higher than what was sanctioned by the Assistant Collector, the proper course for them would have been to go in appeal to the Appellate Collector at that stage, which they had not done. It was pointed out to Shri Tayal that the Assistant Collector had in effect sanctioned the rebate as claimed by the appellants (on the view prevailing at that time) and therefore, they could not at that stage feel dissatisfied with his order. A remedy of appeal lies when a person feels aggrieved by an order and the appellants could not reasonably have felt aggrieved by the order of the Assistant Collector sanctioning whatever they had claimed. With reference to this aspect, Shri Tayal maintained that the only remedy open to the appellants was an appeal to the Appellate Collector.
13. We have carefully considered the arguments advanced from both sides. In the view taken by the Tribunal in a large number of cases (two of which have been referred to in para 3 above), the interpretation on which the appellants based their revised claim has to be sustained. The question is whether the lower authorities were right in denying the benefit of this interpretation on the grounds given in the Appellate Collector's order. Here again, as regards the question of time-bar, if it was open to the appellants to make a claim for refund, and their application dated 28-3-1976 can be considered as a valid claim under Rule 11, then, on the basis of the facts and dates set out earlier, and subject to verification of the date from which the clearance of excess production started, the claim has to be taken as within time.
14. We have now to consider the further question whether the letter dated 28-3-1976 can be taken as a valid claim under Rule 11.
Considering this claim by itself (and without reference to the earlier order dated 4-9-1975) we find substance in the argument of Shri Shanti Bhushan that it meets the requirements of Rule 11 of the Central Excise Rules, which was in force at the relevant time. Thus, it related to duty which according to the appellants had been paid through inadvertence, error or misconstruction; and the claim was made well within the time limit of one year then applicable under Rule 11 read with Rule 173J.15. A question then arises whether consideration and sanction of the revised claim would have involved the revision of the Assistant Collector's earlier order. We observe that in a case where an assessee makes a claim for refund within the period of limitation, and then (also within the period of limitation, and before his original claim is disposed of) submits a revised claim for a higher amount, there can be little doubt that he is fully entitled to do so. Would the situation change if his first claim has been disposed of? Shri Shanti Bhushan contended that it was open to an assessee to make several claims on different grounds, provided this was done within the period of limitation, and that the proper officer was bound to entertain such Claims. It is not necessary to rule on this argument, because in the present case it cannot be said that the basis of the revised claim was different from that of the original claim. The basis for both claims was the same, namely, the rebate doe to the appellants in terms of Notification No. 146/74. However, t is also quite clear that the real issue involved in the revised claim was not either considered or decided by the Assistant Collector when disposing of the original claim. Both the assesses and the Assistant Collector were acting, on the basis of a particular interpretation of the notification. Had the assessee claimed a refund on the basis of the interpretation he subsequently relied on, and had the Assistant Collector restricted the rebate to an amount based on the original interpretation, that clearly would have been a case where the Assistant Collector had taken a decision on a particular issue, and he would equally clearly have been precluded from revising that decision. But this was lot the position.
The particular issue raised in the revised claim was neither placed before the Assistant Collector nor decided by him. Therefore, it appears to us that in considering the revised claim and sanctioning a further refund to the extent found to be due on the basis of that claim, the Assistant Collector would not have been in the position of revising his earlier order.
16. The authority cited by Shri Verma (vide para 10 above) has to be lead in the light of the above considerations. The fact that the decision in that case was in favour of the assessee would not be a valid ground for a departure from the principle that an authority cannot revise his own decision. But that decision has to be distinguished on the basis of the facts of that case which come out clearly from the extract given. It is obvious that in that case there was a decision on the specific issue of classification with reference to the classification list which was filed under Rule 173B, and was unconditionally approved. Now, the sole purpose of a classification list is to determine the classification and rate of duty applicable to the goods which it covers. When the classification list was approved by the proper officer, it necessarily implied at the question of the classification (subject to all relevant considerations, deluding applicable exemption notifications) was squarely before him, and was decided by him. A subsequent decision to treat the approval as provisional clearly amounted to a review of the original decision on the classification of the goods. The position was clearly different from that in the present case where, as we have pointed out, the Assistant Collector, when assisting his first order, was not called upon to decide, nor did decide, on the correctness of the revised interpretation of Notification No. 146/74.
17. As regards the argument that if such a view were taken, this could ad to assessees filing repeated claims for refund when they could have done at one stroke, we do not think that this is a real danger. No assessee would willingly postpone claiming any amount which he realises to be due to him. This could only happen in an exceptional case like the present one. In this connection the Bench painted out at the hearing that there is no provision in Rule 11 similar to Section II of the Civil Procedure Code, barring party from taking up a ground which might and ought to have been made a ground in an earlier claim.
18. We are also unable to agree with the argument of Shri Tayal that the proper remedy of the assessees in this case was to file an appeal to the appellate Collector against the first order. Leaving aside the fact that at that time they were not aware of the revised interpretation of the notification, ten if they had filed an appeal, the appellate authority would have been within its rights to held, and in all probability would have held, that the appellants had no reason to feel aggrieved by the Assistant Collector's order, which granted them the relief they had sought.
19. In the result, we are of the view that the grounds advanced on behalf of the appellants have substance, and that the appellants' letter dated 28-3-1976 should be considered as a valid claim in respect of excess duty paid by them on excess production for a period of up to one year prior to the date of receipt of that letter, namely, 3-4-1976.
As regards the interpretation of Notification No. 146/74, we follow our earlier decisions which have already been referred to. We further hold that the consideration of the refund claim would not involve a revision of the Assistant Collector's "earlier order, but could be considered as supplementary to that order, and therefore, as within his competence.
We accordingly allow the appeal and direct that consequential relief be granted. Subject to the verification of the appellants' claim that excess payments started from October 1975 onwards, viz., less than a year prior to 3-4-1976, the refund due to them shall be worked out by the Assistant Collector, following the interpretation adopted by us in the cases referred to in para 3 above, and sanctioned.