1. The question for decision in this appeal originally filed as revision application to Government of India is whether rejection of part of appellants' claim for refund relating to period 15-6-1970 to 20-6-1973 as barred by limitation and therefore, inadmissible, is correct.
The appellants are engaged in the manufacture of Die-cast rotors at their factory at Hubli, within jurisdiction of Collector of Central Excise, Bangalore. The Collector of Central Excise issued a Trade Notice No. 14/71 dated 22-1-1971 informing the Trade that the Die-cast rotors are classifiable under T.I. No. 30(4) of C.E.T. The appellants had been classifying the goods under this item and paying appropriate duty. Subsequently, the Collector issued another Trade Notice No.277/75, dated 12-12-1975 informing the trade that such die-cast rotors did not fall within the ambit of T.I. No. 30(4). The appellants then appelied on 21-6-1976 to the Asstt. Collector of Central Excise, claiming a refund of Rs. 43,143.40 the amount paid by them as duty during the period 15-6-1970 to 4-12-1974. The Assistant Collector issued a Show Cause notice to the appellants to show cause why the claim for refund should be not limited to a period of 3 years preceding the date of application. After following the usual procedure by his order dated 28-2-77, the Assistant Collector granted refund to the appellants in respect of amount paid during 21- 6-73 to 4-12-74, but rejected the part of claim relating to period 15-6-70 to 20-6-73 as inadmissible. The Appellate Collector by his order dated 23- 12- 1977 upheld the Assistant Collector's order, hence the present appeal.
2. In the grounds of appeal (revision), it is urged that all the money collected by the Government on the basis of interpretation of T.I. 34 was not in accordance with law. Such collections were illegal and without any basis in law, Government owes an obligation to return the whole of it. The collection is not a case of mistaken payment but actually a case of mistaken recovery under mistaken interpretation; that Article 96 of Limitation Act (which the Assistant Collector and the Appellate Collector relied) has no application to the case, because the Excise Act is a self-contained Act with self-contained Rules which provide for limitation. Even if Article 96 of the Limitation Act was applicable, the limitation would run from the date knowledge that an entry has been wrongly interpreted or from the date of new notification or from the date of judgment. Application for refund was made well within three years time from the date of knowledge that an entry has been wrongly interpreted. Under these circumstances, the refund of entire amount should have been granted. They also referred to a judgment of the Supreme Court in which they claimed that Supreme Court had laid down that an amount collected by the Government under mistake of law would have to be refunded within the prescribed legal limitation of 3 years of the discovery or knowledge of such mistake.
3. At the hearing, none appeared for the appellants. A communication dated 4-10-83 was received from the appellants stating that they had forwarded a copy of the Supreme Court judgment on which they based their argument that refund claim within three years from the discovery or knowledge of the mistake in interpretation of Classification be the Government as admittedly made known by Trade Notice No. 277/75, dated 12-12-1975, and therefore, refund of entire amount in respect of said period should have been granted, They also stated that as they were busy in other work they were not deputing a representative for personal hearing and the appeal may be decided on merits on the basis of their submissions already made.
4. On behalf of the Deparment, Sh. A.K. Jain, S.D.R. defended the order passed by the lower authorities.
5. It might at the outset be stated that though the appellants claim to have forwared a copy of judgment of the Supreme Court in support of their case, they have not in fact done so. They have only forward a copy of what appears to be a news tern in the Indian Express dated 30-10-1974 under caption 'SC ruling on tax paid under mistake of law'.
The news item relates to a decision of the Supreme Court while dismissing appeals filed by an Excise Contractor of Karnataka for the refund of Education Cess paid to the Government under the Mysore Education Act, 1941. No citation of the ruling has been forwarded. In absence of the same, it has not been possible to trace the ruling.
The Assistant Collector of Central Excise and Appellate Collector both refer to Article 96 of Limitation Act and so do the appellants in their grounds. We presume that this Article is form the Limitation Act, 1963 and not Old Limitation Act, 1908. We have not been able to appreciate this reference to Article 96. Article 96 refers to suit by the Manager of a Hindu, Muslim or Buddhist religious or charitable endowment to recover possession of moveable or immovable property comprised in the endowment which has been transferred by a previous manager for a valuable consideration for which the period of limitation is 12 years from the time from which period begins to run, which is set out in column 3 of the Article. Clearly, this article would not be applicable in the case We do not think that even Article 96 of Limitation Act, 1908, which accoring to Mitra's Limitation Act 4th Edn. corresponds to Article 59 of the new Limitation Act, which reads 'To cancel or set aside an instrument or decree or for the rescission of a contract', or which the limitation is three years is applicable to the present case.
6. In the present appeal, it is not proposed to decide whether the Limitation Act would be applicable to such a claim. It appears that the lower authorities applying the Limitation Act granted refund to the appellants restricting the refund to a period of 3 years preceding the date of application for refund: The appellants seem to be relying on Section 17, Sub-section (c) of the Limitation Act, 1963 for their claim that time for making claim for refund begins to run from the date when the mistake of law was discovered. According to them, this mistake was discovered after the issue of Trade Notice dated 12-12-1975 and time for making claim for refund begins to run from this date. We have already said that in this appeal it is not proposed to decide whether Limitation Act is applicable to the present claim. The question is assuming appellants contention regarding applicability of Limitation were correct, whether appellants could get the benefit under Section 17, Sub-section (c) of the Act. Trade Notice dated 12-12-1975 is not a judicial precedent like a judment of Supreme Court or that of a High Court on the basis of which the appellants could claim that the mistake of law was discovered. On the other hand, the appellants themselves in their Memo. of appeal addressed to the Appellate Collector stated that they as member of trade were not in agreement (with classification under item 30(4), and hence had taken up the matter separately with the Government through the Trade [that assessment under Item 30(4) was wrong] and this would mean that the appellants were aware of the correct position in law. Their contention that mistake of law came to be known only with the issue of Trade Notice, in view of the foregoing, is not acceptable. Besides, to get the benefit of Sub-section (c) of Section 17 of Limitation Act, 1963, it is not only that mistake is discovered, it is also stipulated that mistake could with reasonable diligence, have not been discovered. There is no material or pleadings on the point to show as to what steps were taken by the appellants in the direction.
On the other hand, as already pointed out, material on record would show that the appellants long before the trade notice dated 12-12-1975 know of the correct legal position.
In view of the foregoing, no interference in orders passed by the lower authorities is called for. The appeal fails and is dismissed.