1. Appeal under Section 35B of the Central Excises and Salt Act, 1944 praying that in the circumstances stated therein, the Tribunal will be pleased to set aside the order of the Collector of Central Excise (Appeals), Madras dated 9-12-83 in No. 303/83(B) with consequential refund of Rs. 19,184.33.
2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri A.Y.N. Gupta, Advocate for the appellant and upon hearing the arguments of Shri J.M.K. Sekhar, Senior Departmental Representative for the respondent, the Tribunal makes the following Order : 3. A claim by M/s. Bharat Fritz Werner (P) Limited, the appellant herein, for refund of Rs. 19,184.33 being the duty paid on 7 units of universal milling machines supplied by them to Central Tool Room and Training Centre, Calcutta, on the basis of a purchase order of Danish International Development Agency, was rejected by the Asstt. Collector of Central Excise, Yeshwantpur Division, Bangalore, vide Order C. No.V/68/18/65/82, dated 7-10-1982 on a finding that Trade Notice No.46/79, dated 22-2-79 does not have retrospective effect-the trade notice itself is one of communication of the order of the Government of India granting exemption amongst other things, to the units manufactured by the appellant and cleared on payment of duty between 25-5-78 and 8-11-78 the application itself being dated 26-6-79. The claim was held as barred by limitation under Rule 11 of the Central Excise Rules, 1944, the duty having been paid between 25-5-78 and 8-11-78 and the application was dated 26-6-79.
4. When the matter went up before the Collector of Central Excise (Appeals), Madras, that Collector held that the Central Board of Excise & Customs, which issued the relevant order of exemption "do not have powers to issue any special order with retrospective effect under Section 8(2) of the Central Excise Rules"; the fact remains that the claim for refund was made well after the period of six months under Rule 11 ibid. Accordingly, he rejected the appeal by his order referred to supra.
5. Before me the Advocate for the appellant clarified that the appellant-company came to know of the order of the Board only on 17-3-79 from a communication from the Chamber of Commerce. This Circular No. 4261/78-79 dated 8-3-79 refers to Trade Notice No. 46/79, dated 22-2-79 of the Collector of Central Excise, Bangalore, which in turn sets out a copy of the order of the Government of India referred to above, granting exemption in respect of a number of goods which are ordered for purchase by the Danish International Development Agency from the suppliers mentioned in Col. 4 of the Schedule and supplied to the Central Tool Room and Training Centre, Calcutta. In view of the delayed intimation regarding the exemption, he urged that the limitation must be based from the date of knowledge, and if it is held that there is any delay in the claiming of the refund it should be condoned. With reference to the Collector's observation regarding non-retrospective effect of the order of exemption, he drew our attention to the operative part of the Government's order which refers to "goods which are ordered for purchase". He also referred to Section 9 of the Limitation Act and stated that principles similar to it should be applied regarding commencement of time for action and institution of a case or making an application for refund.
6. The Senior Departmental Representative on the other hand, referred to Rule 11 which specifically provides that any refund of duty has to be claimed within six months from the date of payment thereof. There was no scope for deviation.
7. I have considered the arguments of both sides. Though ordinarily a refund claim has to be made within six months from the date of payment of duty, the nature of a special order as issued under Rule 8(2) of the Central Excise Rules, 1944 has to be kept in view. On the date Government passed the order of exemption in respect of various items including the items for which the appellant has claimed refund, the goods had already been cleared. Duty was paid between 25-5-78 and 8-11-78 whereas the order itself is dated 17-1-79. When the Government passed an order at a point of time later than the date of payment of duty itself, it has to be held that the Government knew the fact regarding payment of duty and still passed an order of exemption. The theory that Government has no power to pass an order of exemption with retrospective effect as propounded by the Collector (Appeals) is not one that can go unchallenged. In dealing with a somewhat similar situation under the Customs Act, 1962, Special Bench C of this Tribunal in the case of Food Corporation of India v. Collector of Customs, Bombay-1984 ECR "We cannot understand why an exemption that is so specific to the goods in question, as this one, cannot be given effect to simply because it acts on a past consignment. The exemption giving power knew quite well at the time that it issued the order that the goods had been cleared already. In exempting the ammonium chloride in question from payment of customs duty and auxiliary duty in excess of 5% ad valorem subject to certain conditions, there is no doubt that the exemption giving power knew that it would only act retrospectively." I respectfully agree with the above views of my brethren. In the circumstances of the present case the fact of existence of an order has to be taken into account and not whether the Government exceeded its authority in passing the order, a factor which is not for this Tribunal to question, particularly when the order is in favour of the appellant.
The circumstances of the case are such that the order of the Government dated 17-1-1979 should be considered as having given an absolute right to the appellant for claiming money paid prior to the passing of the order itself. In this view of the matter, I allow the appeal with consequential relief to the appellant.