1. In this case, the refund claim of the appellants for Rs. 46,413.57 made in terms of the exemption Notification No. 198/76-Central Excises, dated 16-6-76 (commonly known as incentive scheme for higher production) was rejected by the lower authorities on the ground of being time-barred under Rule 11 of the Central Excise Rules, 1944. The said authorities held that the claim pertained to the period from 3-4-76 to 31-3-77 and since it was submitted on 19-4-78, much beyond the time limit of six months, it was hit by the limitation. Aggrieved by the order of the Appellate Collector, the appellants filed a revision application before the Central Government which, on transfer to this Tribunal, has been taken up as the subject appeal.
2. During the hearing before us today, the appellants relied on the following two orders of this Tribunal:(C.E.G.A.T.)New Jatiaga Valley Tea Estates Ltd., Calcutta v. Collector of Central Excise, Shillong.
(2) 1983 E.L.T. 2426 (C.E.G.A.T.)Neelamalai Teal Coffee Estates and Industries Ltd., Nilgiris v. Collector of Central Excise, Madras.
Their case is that they submitted their declaration for approval of base year and base year clearances to the Assistant Collector on 17-5-77, that is, within the time limit of one year, as applicable at that time under Rule 11 read with Rule 173-J, and since the Tribunal had equated the act of submission of this declaration to staking of claim for exemption under the notification, their claim was not time-barred. They added that the Assistant Collector took time in approving their declaration. They received his approval on 10-3-78 and soon thereafter, on 19-4-78, they submitted their formal refund claim after quantifying the amount of refund therein.
3. The Department's representative stated that while he did not contest the correctness of the earlier Tribunal orders aforesaid, the present case was distinguishable inasmuch as in the previous cases the assessees had filed their declarations before the Asstt. Collector in advance of the commencement of their excess clearances while the present appellants had filed their declaration after the excess clearances had already taken place. The ratio of the previous Tribunal orders, he argued, was, therefore, not applicable to the facts of the present case. Secondly, he maintained that the scheme of the notification was that the assessee should avail of the concessional rate of duty on the date of clearance of the excess goods itself and not later on. When it was pointed out to him that there appeared to be no such stipulation in the notification, he came out with a new plea, made for the first time, that the appellants' claim was not due to error, inadvertence or misconstruction and hence was not covered by Rule 11, meaning thereby that the appellants should have to file only a civil suit for pursuing their refund claim.
4. We have carefully considered the matter. In spite of our asking, neither side could give us the exact dates on which excess clearances took place in the appellants' case. The lower orders mentioned the period of refund claim as 3-4-76 to 31-3-77. This appears to be incorrect for two reasons. First, it is inconceivable that within 3 days of the start of the financial year clearances of excess quantity, over and above the base year clearances, would have started. Secondly, the notification itself was issued on 16-6-76 and it came into force on 1-7-76. There is, therefore, no question of any excess clearances eligible for the concessional rate having taken place prior to 1-7-76.
The lower authorities have taken almost the full financial year 1976-77 as the period of claim presumably because the exemption was related to excess clearances during the financial year. In the circumstances, the concensus reached by both sides before us was that the exact period of claim would be somewhere between 1-7-76 and 31-3-77.
5. We also notice that though the notification itself was issued in June, 1976, the procedure for its implementation was made known by the Department to the trade some four months later. In the present case, the jurisdictional Collector issued his trade notice on 19-10-1976. It required that the assessee could avail of the concession in respect of his excess clearances only after his base year and base year clearances had been determined by the Assistant Collector. For this purpose, the assessees desiring to avail of the exemption were asked to file their declarations before the Assistant Collector in the prescribed proforma.
It was in this setting of facts that we held in the previous cases aforesaid that when an assessee submitted the prescribed declaration on a particular date ; he should be considered to have staked his claim for availing the exemption on that date and the limitation of Rule 11 should stop running against him on that date. We held further that subsequent quantification of the amount of refund, after the Assistant Collector had approved the base year and the base year clearances, was not material for the purpose of computing the limitation of Rule 11. We find no reason to treat the present appellants differently. We, therefore, agree with the appellants that the limitation stopped running against them on 17-5-77, the date on which they submitted their declaration to the Assistant Collector. Since their declaration had been submitted within one year of the period (1-7-76 to 31-3-77) during which they had paid duty at the normal higher rate, we hold that their refund claim was not time-barred.
6. The distinction sought to be drawn by the Department's representative between the earlier cases and the present one is not material so far as the question of limitation is concerned because so long as the assessee files his claim even after payment of excess duty but within the time limit prescribed in the rule, his claim has to be considered.
7. We find no stipulation in the notification that the concession given therein must be availed of on the date of clearance of the excess goods itself and should not be claimed as a refund later on under Rule 11.
Secondly, the procedure devised by the Department for implementation of the scheme of the notification, as already discussed above, was such that at least in the first year of the scheme (1976-77) hardly any assessee could have availed of the concession simultaneously with the clearance of the excess goods.
8. Coming finally to the new plea of the Department's representative, we find that the appellants were in a position to stake their claim for exemption soon after 19-10-76. If they delayed doing so for 6-7 months, it could either be due to their ignorance, or inadvertence or perhaps due to their error of judgment in anticipating whether in the year 1976-77 they would at all be able to make any higher production and excess clearances. We hold that the words, 'inadvertence' and 'error' in Rule 11, as the rule then read, were wide enough to cover the circumstances of the appellants' claim. We notice that both the Asstt.
Collector as well as the Appellate Collector also considered the claim as one falling under the provisions of Rule 11. We, therefore, find no substance in the new plea of the representative of the Department that the appellants should be asked to file a civil suit for their refund claim.
9. In the result, we allow this appeal, set aside the impugned order and direct the Assistant Collector to dispose of the appellants' refund claim on the basis that it was not time-barred under Rule 11.