1987 (12) TMI 45 - HC - Central Excise

Summary

Issues:
Challenge to order for refund of excess excise duty paid and determination of limitation period for filing refund claim under Section 11B of the Central Excise Act, 1944.

Analysis:
The petitioner, a manufacturer of "Margo Soap," paid provisional excise duty on 30th June 1984. The excise duty payable was later ascertained to be Rs. 36,08,161.14 between September and October 1984, with the petitioner allowed to pay in 12 installments. A mistake led to an excess sum of Rs. 5,97,343.98 being demanded and realized by the Central Excise Authorities. The petitioner sought a refund under Section 11B of the Act, but a show cause notice was issued questioning the limitation of the claim. The respondent held the claim barred by limitation, citing the date of raising demand as the relevant date for the six-month period under Section 11B.

The dispute centered on the starting point for the limitation period. Rule 9B of the Central Excise Rules, 1944, outlines the adjustment of duty provisionally assessed against the duty finally assessed. Section 11B(1) allows for refund claims within six months from the relevant date, as explained in Explanation 5(B) of the Act. The relevant dates specified in the explanation include the date of adjustment of duty after final assessment and the date of payment of duty.

The petitioner contended that the limitation period should start from the dates of adjustment or payment, not the date of raising the demand of duty. The court agreed, finding the respondent's decision on limitation contrary to the law. The payments made by the petitioner were adjusted against the excess amount demanded, falling within the provisions of either (e) or (f) of Explanation 5(B) of Section 11B. The court held that even if (e) was not applicable, the case fell under the provisions of (f).

Consequently, the court set aside the order holding the refund claim barred by limitation, directing the respondents to refund the excess amount within three months. The respondent's request for a stay was refused, and no costs were awarded in the matter.