1. The Assistant Collector of Central Excise, Eluru, vide Order No.11/83 in C. No. V/14-B/18/25/82 MP-1, dated 27-4- 983 rejected a claim for refund of duty paid on two Gate Pass Nos. 4477 and 4478, dated 11-11-1980 as barred by limitation under Section 11-B of the Central Excises and Salt Act, 1944. He noted that the appellants M/s. Andhra Sugars Limited, claimed to have cancelled the two gate passes as the lorry people objected to leave the factory gate with less quantity.
Hence, the goods did not leave the factory at all. In appeal, the Collector of Central Excise (Appeals), Madras felt that the case is to be decided without reference to Rule 173 I of the Central Excise Rules or Section 11B of the Act. In terms of proviso (vii) to Rule 173G(2), when a gate pass is to be cancelled, an intimation is sent to the proper officer not later than the day next following the day on which such gate pass is cancelled. The assessee can take credit of duty in the PL Account. On that score, he allowed the appeal. The Collector of Central Excise, Guntur, has come up in appeal before the Tribunal against this order of the Collector (Appeals).
2. The brief points urged is that in the application of proviso (vii) to Rule 173 G(2), the Collector of Central Excise (Appeals), has missed an important point. According to the Department, it is not only necessary for the assessee to send an intimation to the proper officer but he must do so the next day following the day on which such gate pass is cancelled. In the present case, Gate Passes are dated 11-11-80; the intimation was dated 12-11-1980 and was actually received by the proper officer on 15-11-1980. Hence, there has not been proper compliance with Rule 173G(2), proviso (vii).
3. The Representative for the appellants referred to the decision of Supreme Court in the case of National Tobacco v. Asstt. Collector of Central Excise, Calcutta (1978 E.L.T. p. 416) wherein it has been laid down that assessment precedes levy. There was no assessment in the present case and because there was no removal, the items were not included in the R.T. 12.
4. The Senior Departmental Representative argued that intimation within a prescribed period enables the Department to verify that the goods for which the gate passes were prepared are in fact lying in the factory and have not been used for purposes of an earlier removal. To our mind, it appears that this is an important safeguard. In the circumstances to which the Senior Departmental Representative referred to, such safeguards cannot be lightly brushed aside.
5. The Senior Departmental Representative further pointed out that in letter No. CFK/CE/80, dated the 12th November, 1980, the respondent had merely informed the Superintendent of the cancellation of the Gate Passes. In the second letter of the same day, addressed to the Superintendent of Central Excise, Kovvur, he had asked for refund of the duty paid. The Superintendent advised the party to file the claim for refund with the Asstt. Collector of Central Excise, Eluru Division, and this letter was received by the Assistant Collector six months after the date of credit in the PL Account. Hence, it is barred by limitation under Section 11-B of the Act.
6. With the non-availability of provisions of Rule 173-G of the Central Excise Rules, 1944 and as has been rightly pointed out by the Assistant Collector that a proper claim for refund has been received by him after the time limit prescribed under Section 11-A of the Act, it is barred by limitation.
7. In the result, the order of the Collector (Appeals) is set aside and that of the Assistant Collector rejecting the claim restored.