2001 (8) TMI 214 - AT - Central Excise

Summary

Issues:
1. Applicability of Notification No. 175/86-C.E. for concessional rate of duty.
2. Direction by Superintendent to take credit of excess duty paid.
3. Show cause notice under Section 11D for recovery of credit.
4. Barred by limitation under Section 11A.
5. Validity of proceedings under Section 11D.

Analysis:
1. The appellants were paying full rate of duty but were entitled to the benefit of exemption under Notification No. 175/86-C.E. for a concessional rate. The Superintendent directed them to take credit of the excess duty paid, which they did and recorded it. However, a subsequent notice was issued for recovery of this credit under Section 11D, leading to the current appeal.

2. The appellants argued that the show cause notice issued for recovery of the refund was time-barred under Section 11A, as it was issued in 1997 for a refund taken in 1993. They contended that the Revenue should have issued a notice within six months from the relevant date, and since this was not done, the proceedings were invalid.

3. The Tribunal examined the orders passed by the lower authorities and found that the refund directions issued by the Superintendent were not appealed against, as per the case law cited. The Tribunal emphasized the need for simultaneous action under Section 11A and Section 35E(2) for recovery of erroneous refunds. In this case, since no appeal was filed against the Refund Order of the Superintendent, the show cause notice under Section 11A without setting aside the earlier Refund Order was deemed invalid.

4. The Tribunal concluded that the show cause notice issued in 1997, without any suppression or misstatement by the appellants, was clearly time-barred. Therefore, they set aside the impugned Order and allowed the appeal, providing consequential reliefs to the appellants. The judgment highlighted the importance of following proper procedures for recovery of refunds and the significance of initiating actions within the prescribed time limits under the relevant sections of the law.