1. This is an appeal filed under Section 35-B(2) of the Central Excises & Salt Act, 1944 by the Asstt. Collector (Legal) Central Excise, Baroda, against the order No. A-1735/BD-691/82, dated 4-11-1982 of the Collector Central Excise (Appeals) Bombay under which the respondent's appeal for refund of Central Excise duty amounting to Rs. 15,808/- was allowed. The Asstt. Collector of Central Excise (Legal) Baroda has been authorised by the Collector of Central Excise Baroda to file the present appeal. The respondents in the present appeal M/s. Power Build Ltd. have also filed a cross objection against the same order dated 4-11-1982 of the Collector of Central Excise (Appeals) Bombay. Hence, both the appeal and the cross-objection have been heard together for the purpose of passing a common order.
2. Shri Pattekar on behalf of the appellant, the Collector of Central Excise, Baroda has explained the facts of the case and argued that the order dated 4-11-1982 of the Collector of Central Excise (Appeals), Bombay requires to be set aside because the relief granted by him for refund of duty is not admissible, as the claims for refund filed by M/s. Power Build Ltd. with the Asstt. Collector of Central Excise, Anand are hit by the time bar under Section 11-B of the Central Excises & Salt Act. The Asstt. Collector of Central Excise, Anand in his order No. V/18-60/MP/80, dated 16-5-1981 rejected the claims for refund on the ground that M/s. Power Build Ltd. did not follow the prescribed procedure under Rules 174-H and 173-L of the Central Excise Rules, 1944. The Asstt. Collector did not go into the question that except for the duty paid on 26-6-1980 the payment of duties made on earlier dates were barred by limitation and hence the refund under Section 11-B was not permitted. Possibly for this reason, the Collector (Appeals) also did not go into this question while passing his order dated 4-11-1982.
This order' has, therefore, become erroneous and illegal and requires to be set aside. It was, further contended by the learned departmental representative that the respondents did not follow the prescribed procedure and did not ask for permission under Rule 51-A to bring back duty paid goods in their L-4 premises. M/s. Power Build Ltd. possess the L-4 licence since 1975 and they were familiar with the Central Excise rules. While it was admitted that M/s. Power Build Ltd. had brought back the duty paid goods in their premises for making the necessary manufactures and repairs or reconditioning and that this process did not amount to a process of manufacture of a new commodity as defined under Section 2(f) of the Central Excises & Salt Act, 1944, the duty paid by M/s. Power Build Ltd. was under a mistake of law and the refund of this duty Was now hit by the time bar under Section 11-B except in the last case and hence the refund was not admissible.
Accordingly, Shri Pattekar requested that the appeal filed by Asstt.
Collector of Central Excise (Legal), Baroda be allowed.
3. The learned representative of the respondent Shri Khosala has argued that the Asstt. Collector and the Collector (Appeals) did not take into consideration the question of time bar in their orders and hence the appeal filed on behalf of the Collector of Central Excise, Baroda cannot be entertained on this ground. Shri Khosala has further argued that at the relevant time the Collector of Central Excise, Baroda had the power to review the order of the Asstt. Collector of Central Excise, Anand dated 16-5-1981 under Section 35-A of the Central Excises & Salt Act, 1944, if he considered that the Asstt. Collector's order was illegal; but he did not review the same. As regards the grounds of appeal now taken up by the Asstt. Collector, Central Excise (Legal), Baroda, it is seen that the main consideration was that the claim of M/s. Power Build Ltd. was time-barred under Section 11-B. This is not correct as the Company's claim was not filed under Section 11-B of the Central Excises & Salt Act, 1944, but under the general provisions of law. Shri Khosala referred to the judgment of the Bombay High Court in the case of Bush India as reported in 1980 ELT, page 258 to show that in that case the Bombay High Court had held that the time limit under the departmental law would not apply where duty was collected without the authority of law. Similarly, Shri Khosala read out various judicial pronouncements as mentioned in the memo of cross objection to show that the time bar under Section 11-B was not applicable to the refund claimed by M/s. Power Build Ltd. The authorities were cited mainly to buttress the respondent's arguments that the duty was not legally recoverable as the process carried out by the respondent did not amount to the manufacture of a new commodity. Quoting the judicial pronouncements Shri Khosala argued that the respondent made the claim for refund not under Section 11-B. They approached the Asstt.
Collector, Central Excise, Anand in his capacity as an Administrative Officer to give them the refund of duties which were not recoverable under the Central Excises and Salt Act. Since the duties were not paid under the Central Excises and Salt Act, the time bar under Section 11-B was not applicable. Shri Khosala further argued that the Government of India in the Revision Application under old Section 36 had accepted this interpretation of the law and he had referred to the Government's decision in the memo of Cross Objection. Therefore, even on the basis of the Government's decision, the refund was admissible to the respondents. Since the respondents were. claiming the refund outside the machinery of the Excise Law, the alleged contraventions of Rules 173-H and 173-L would not come in their way. Shri Khosala also referred to the instructions contained in the letter No. 5/7/71-CX. I, dated 8-5-1973 of the C.B.E.C. which were reproduced in the 1979 Cen. Cus.
152-C to the effect that whether duty was paid under a mistake, the refund of the same could be allowed provided the claim is made within three years of the discovery of the mistake. Shri Khosala finally pointed that there have been decisions of the Tribunal that the time limits under the departmental laws should be applicable to the claims for refund of duties made before the departmental authorities. However, apart from this adverse factor, of the decision of departmental authorities like the Central Board of Excise & Customs, the Government of India, the High Courts and the Supreme Court were in his favour and therefore in the present case also the refund was correctly sanctioned.
The present case of Power Build Ltd. was distinguishable from the cases considered by the Tribunal where claims were filed either under the Customs Act or the Central Excises and Salt Act. Since the claim of the Company was not under Section 11-B, the refund was due to the Company and hence Shri Khosala prayed that the appeal on behalf of the Collector of Central Excise, Baroda be dismissed.
4. Shri Pattekar for the department has argued in reply that the various judicial and quasi-judicial pronouncements referred to by the learned representative of the respondents were not applicable to the present case. In this behalf he relied on the judgment of the Supreme Court in the case of Madras Rubber Factory AIR 1976 SC 658 in which case it had been held by the Supreme Court that the claim filed by the Company beyond the time limit of six months under Section 27 of the Customs Act was correctly rejected by the Customs authorities. Shri Pattekar pointed out that the provisions of Section 27 of the Customs Act were identical with those of Section 11-B of the Central Excises & Salt Act and hence the ratio of the Supreme Court's judgment would be binding oh the Tribunal. Besides, the respondents had applied for refund to the Asstt. Collector, Central Excise, Anand who was functioning under the Central Excises and Salt Act and the Central Excise Rules, and there was clear violation on their part of Rules 51-A, 173-H and 173-L. It was, therefore, not necessary for the Asstt.
Collector to go into all the grounds of the claim before rejecting it on some grounds. The respondents had paid duty on their own and the department had not demanded duty from them and the respondents cannot now go back on the payment. The statement of M/s. Power Build Ltd. in para 5 on page 5 of the memo of cross objection challenged the inherent powers of the Tribunal. Rule 10 of the Customs, Excise & Gold Control Appellate (Procedure) Rules, 1982 is quite clear in the matter that the Tribunal could base its decision on grounds which might not be urged in the appeal. Since the claim was clearly time barred, he requested that the Appeal on behalf of the Collector of Central Excise, Baroda be allowed.
5. Shri Khosala for the respondents has pursued his arguments in the Cross Objection. He has drawn our attention to his article published in Excise Law Times, May 1983 in which he has dealt with the question of time bar and its endorsement by the Tribunal. He has repeated his contention that the claim of M/s. Power Build Ltd. was not in terms of the Central Excises and Salt Act but in terms of the administrative powers exercised by the Asstt. Collector and in this behalf he relied on the ratio of the Bombay High Court in their decision in the case of M/s. Swadeshi Mills v. Union of India 1982 ELT 237 (Bombay). He, therefore, requested that the refund sanctioned under the order of the Collector of Central Excise (Appeals) be granted. In answer to my query as to in how many cases Shri Khosala as a former Senior Officer of Central Excise had acted in this manner leaving aside the Central Excises and Salt Act, and. the C.E. Rules, Shri Khosala replied that he did not remember any case where he had acted as per his own submissions, as he had retired from the department many years ago.
6. We have examined the submissions of the appellant and the respondents in the appeal and the Cross Objection. Taking up the submissions of the appellants first, we find that the main ground urged on behalf of the Collector of Central Excise, Baroda is that the order dated 4-11-1982 of the Collector of Central Excise (Appeals) should be set aside because it sanctions refund to the respondents without taking into account the fact that the claim of the respondent was barred by Section 11-B except in the case of duty paid on 26-6-1980. Even though the Asstt. Collector of Central Excise, Anand and the Collector of Central Excise (Appeals) did not go into the aspect of the time bar, the claim is hit by this limit and hence the Collector's order is not legal. The appeal is mainly on this basis. The respondents' argument that the appellant is not now free to take up the new plea in appeal is not acceptable. As pointed out by the learned departmental representative, the Tribunal has the authority under Rule 10 of Procedure Rules to take into account a plea which might not have been urged before it. It is also the responsibility of the Tribunal to ensure that the law is interpreted correctly. For this reason, there is no fetter on the discretion of the Tribunal. Hence, we discard the respondent's contention that the appellant cannot now take up the plea of claim to be hit by the time bar. As regards the various judicial pronouncements, relied on by the respondents, we find that the analogy of these decisions is not closer to the case before us than the decision of the Supreme Court in the case of Madras Rubber Co. A.I.R.1976 SC 638 as pointed out by the learned departmental representative.
Hence, it is inevitable for us to follow the ratio of the Supreme Court's decision in this case rather than the ratio of different judicial and quasi-judicial pronouncements relied upon by the respondents. This decision of the Supreme Court leaves, no doubt that the time bar under the departmental law is applicable. The half hearted arguments of the learned representative of the respondents to draw distinction between the facts of the present case and those decided by the Tribunal coming within the time limits under the Customs Act or the Central Excise Act are also not acceptable. It is seen that in the present case the respondents have paid duty under the Head "II Union Excise Duties". They have also approached the departmental authorities viz. the Asstt. Collector, Central Excise, Anand for refund of sums paid, as duty. They have further used the form prescribed by the Central Excise department for refund of duty. In view of the forgoing factors, the respondents' efforts to get out of the purview of the Central Excise law at this stage by stating that they had approached the Asstt. Collector only in his administrative capacity cannot succeed. The Asstt. Collector is appointed under Rule 4 of the Central Excise Rules, 1944 and administers the Central Excises and Salt Act, 1944 and the Central Excise Rules, 1944. He has no other administrative function apart from the administration of the Central Excise law. It is therefore, inconceivable to accept the respondents' arguments that they approached the Asstt. Collector in his administrative capacity. In case they were really honest to approach a non-departmental officer, they should have gone to the Civil Court in filing the suit for the amount paid to the Central Excise department. They have not done this.
Therefore, even though we find on the facts of the case, that they were not the manufacturers of a new commodity in terms of Section 2(f), the duty has been paid through error to the credit of the Central Excise department under the appropriate Head for collection of Central Excise duty and the amounts have been deposited on their own by the respondents. In the aforesaid circumstances, the time bar under Section 11-B applies to the claim and hence the order of the Collector of Central Excise (Appeals) is illegal and requires to be set aside. In this view, we are unable to accept Shri Khosala's arguments and his own authority as per the article written by him and published in E.L.T.1983, page A-143, which he urges us to follow on the interpretation of the time bar, casting all modesty to the winds. Accordingly, we set aside the order of the Collector of Central Excise (Appeals), dated 4-11-1982, with this modification that the claim for refund of duty amounting to Rs. 3,5 04/- paid under Gate Pass No. 147, dated 26-6-1980 and P.L.A. entry No. 85, dated 26-6-1980 should be sanctioned to the respondents as the same is not hit by the time bar. The appeal is allowed as above. We, further, find that the Cross Objection of M/s.
Power Build Ltd. is not a Cross Objection in the real sense of the term, but only a statement of the defence in support of the Collector of Central Excise (Appeals) Order, dated 4-11-1982. The Cross Objection appears to have been filed through mistake of law. It is not sustainable factually and legally and accordingly we dismiss the same.