1. M/s. Associated Chemicals has filed an appeal against the Order passed by the Collector of Central Excise (Appeals), Bombay vide Order No. V-2(15-A) 2069/79/2427 dated 25-3-82 and released on 17-4-82. The appeal was filed on the 25th day of November, 1983 as per registry. In column 3 of the Memorandum of appeal, the date of communication of the order appealed against has been mentioned as 21st April, 1982. The appeal was posted for hearing on the 25-2-1983. Shri S.V. Pikale, the Learned Counsel for the appellant has requested for adjournment and accordingly the appeal was adjourned to 25-2-83. An application for condonation of delay was also filed requesting to condone the delay of one month and eight days. The Learned Counsel for the appellant has submitted that the appellant had entrusted the matter to his Customs Consultant one Shri A.S. Wagh for preparation of appeal and submission thereof. The said consultant was not definite about the authority before whom the appeal was to be filed. It took him sometime to come to some decision, in the meanwhile, the appellant also became sick. A photocopy of the medical certificate to this effect has also been attached along with the petition for condonation of delay. The Learned Counsel has submitted that after the constitution of the Tribunal the appellant had immediately filed an appeal on 25-11-1982. In support of the application for condonation of delay affidavit of Shri A.S. Wagh, Customs Consultant dated 16-2-83 has also been filed confirming the contents of the application for condonation of delay.
2. I was satisfied that there was sufficient cause for condonation of delay and the delay was duly condoned on the 23rd February, 1983 and the appeal was also admitted for final hearing.
3. Shri S.V. Pikale, the Learned Counsel for the appellant has submitted before me that the appellant is manufacturer of a product known as Urea Formaldehyde Resin besides other products and the appellant had paid excise duty under Tariff item 15A, for the period pertaining 7-7-1972 to 30-9-1974. In 1977 the department had clarified that this item was not covered by Tariff item 15A and was not excisable. The appellant had filed a refund claim for Rs. 9,344/- in respect of duty paid during the period 7-7-72 to 30-9-74.
4. The Counsel for the appellant has submitted before me that there were very large number of representations and the Government has acceded to the refund of claims. A trade Notice No. 82/1977 dated 18-4-77 was issued. A copy of the trade notice has been filed which is on page 1 of the Paper Book and he further submitted that the appellant had received the copy of the Trade Notice from the Indian Chemical Auxiliaries Manufacturers' Association vide their letter dated 6-1-78 and a copy of the letter is at page 2 of the Paper Book. He has submitted that the relevant date for the computation of limitation is the dale on which the trade notice came to the notice of the appellant.
The refund claim was filed on 4-6-78. He has submitted that the limitation as provided under Rule 11 of the Central Excise Rules is not applicable in this case as duty was paid under mistake of law. Since the duty collected was not authorised, provisions of Rule 11 would not apply and the appellant's case is covered by provisions of Section 17(l)(c) of the Limitation Act, 1963. He has further submitted that the clarification was issued by the department in 1977 and the refund claim was made in 1978, i.e., within 1 year from the date it came to appellant's notice. Thus the same is within three years. The appellant has placed reliance on the Judgment of the Bombay High Court in the case of Svadeshi Mills Co. Ltd. v. Union of India, 982 ECR 165 D. He has also relied on the Supreme Court Judgment in the case of Madras Port Trust v. Hymanshu International, 1979 ELT (J 396). The Learned Counsel has further relied on the following judgments : AIR 1980 S.C.1037 in the case of Shiv Shankar Dal Mills v. Haryana State, Judgment of the Delhi High Court, in the case of Vazir Sultan Tobacco Co. v.Union of India and Ors., 1981 ELT 140 and the case of Patel India (Pvt.) Ltd. v. Union of India and Others, AIR 1973 SC 1300 etc. The Learned Counsel for the appellant has also submitted before me that the show cause notice dated 21st July, 1978 docs not refer to Rule 11 and para 3 of the show cause notice which is at page 22 of the Paper Book reads as under : "M/s. Associated Chemicals, Panvel have not preferred the refund claim within the time limit of three years from the date of payment under the Indian Limitation Act".
He has submitted that even the Revenue had no intention of application of Rule 11 of the Central Excise Rules as there is no reference to the same.
5. The Learned Departmental Representative on the other hand submitted that the non-mention of Rule 11 in the show cause notice shall not vitiate the proceedings. Provisions of Rule 11 are fully applicable in the instant case. These are specific provisions under the Central Excise Rules and provisions of Limitation Act do not apply in the instant case. The Departmental Representative has placed his reliance on the Orders passed by the Assistant Collector as well as Collector of Central Excise (Appeals).
6. I have heard both the sides. Trade Notice No. 82/1977 dated 8-4-1977 which is at page 1 of the Paper Book is being reproduced as under : "1. It was under consideration whether Padding solution or Cyclic Urea soluation or cross linking agents formed by the reaction of Urea or modified Urea or Cyclic Urea derivatives with Formaldehyde produced by Textile Mills and other Chemical Factories for use of Textile mills for processing of textile fabrics is liable to duty under Item 15A CET as 'Artificial or Synthetic Resins and Plastic Materials'.
2. After examination of this issue the Board is advised that the Padding Solution or Cyclic Urea Solution or Cross Linking agents of the nature described above should be treated as Precondensates falling outside the purview of Item 15A of C.E.T. However, such solution will fall under Item 68 C.E.T. 3. All Trade Associations concerned are requested to bring the contents of this Trade notice to the notice of their member constituents." 7. The appellant had paid excise duty under Tariff Item No. 15A for the period from 7th July, 1972 to 30th September, 1974. A simple reading of the Trade Notice shows that Urea Formaldehyde was not excisable at all.
The appellant had wrongly paid the excise duty under Tariff Item No.15A. Tariff item 68 was not in existence during the period 7th July, 72 to 30th September, 1974 as such the goods were not excisable at all.
Had it been excisable item, then Rule 11 of the Central Excise Rules would have certainly applied. In the instant case as there was no liability as to the payment of excise duty, Rule 11 of the Central Excise Rules will not apply. In view of the Circular No. 1/68 Misc.
C.B.E.C. 1, No. 25/1/67-CX VII dated 21-3-69, extract from C.B.R, Bulletin-Central Excise Technical-January-March, 1969, Vol. XV, provisions of Rule 11 are not applicable to refunds of amount paid in respect of commodities which are outside the purview of the Central Excises and Salt Act, 1944. The refund of such duties, however, would and shall be governed by the period of limitation laid down under the Indian Limitation Act, which is three years from the date when money is received. The said circular was passed on the advice of the Law Ministry and an extract from Law Ministry's advice F. No.23/1/67-CEVII-Vol. II dt. 6-3-69 is as under : "When certain amount is illegally collected as a levy under the Central Excise Act, the position of that Act regarding refunds would not be attracted. The period of limitation in respect of such collections under the Limitation Act is three years from the date when money is received." 8. There is another circular letter Misc. No. 8/73-F. No. 5/7/72-CX dated 8-5-75-Extract taken from C.B.R.C. Bulletin Central Excise Technical (April-June 1973) Vol. XIX is as under : "In respect of cases of refunds to which the provisions of Rule 11 of the C. Ex. Rules, 1944 are not applicable and which are governed by the period of limitation laid down in the Indian Limitation Act, a doubt has been raised whether such period of limitation should be reckoned from the date on which the money was received or the date on which the mistake of payment was discovered by the payee. Some Collectors have pointed out that the Instructions contained in this Ministry's letter F. No. 25/1/67-CX VIII dated 21-3-1969 wherein it was clarified that the period of limitation would be 3 years from the date when the money was received are at variance with those contained in this Ministry's letter F. No. 16/9/63-CX. IV dated 27-5-63 wherein it was clarified that this period would be from the date of discovery of mistake by the claimant. The whole question has been examined in consultation with the Ministry of Law and Justice.
It will be seen that the Ministry of Law & Justice have inter alia stated that where payment was made under a mistake which could not have been discovered earlier with reasonable diligence, refund will have to be allowed provided the claim therefore is made within 3 years from the date on which the mistake was discovered by the party. In all other cases, the period of limitation would begin to run from the date of payment of the money. The question whether mistake could be pleaded would depend on the facts and circumstances of the case".
9. In view of the above circulars, I hold that the refund is governed by provisions of Indian Limitation Act. The benefit of above circulars is available only to those cases where the goods are not excisable. The appellant's claim for refund is within three years. In the result the appeal is accepted. The Revenue is hereby directed to refund the amount of Rs. 9,344/- to the appellants.