TMI Blog1985 (10) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... nts filed an appeal to the Appellate Collector of Central Excise, Calcutta. They cited a judgment of the Hon ble Patna High Court in the case of M/s. Bata Shoe Company (Pvt.) Ltd. v. Collector of Central Excise, Patna-1972 Tax L.R. 1833 to the effect that such a case would not be governed by Rule 11 of the Central Excise Rules. The Appellate Collector accepted this submission and allowed the appeal, under his order dated 23-11-1981. Thereupon the Central Government issued a show cause notice dated 5-10-1982 under Section 36(2) of the Central Excises and Salt Act, 1944, as then in force. They expressed the tentative view that Rule 11 was applicable to the case and that their refund claim was time-barred under that rule. They accordingly proposed to set aside the order of the Appellate Collector and pass orders as deemed fit. 2. On the provisions relating to the Tribunal coming into force, these proceedings were transferred to the Tribunal to be continued as an appeal by the Collector of Central Excise, Patna. 3. The matter was first taken up on 11-10-1985. Shri Ravinder Narain, appearing for the respondents, raised a preliminary point that the review show cause notice was barr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excises and Salt Act, i.e. within six months of the date of the Appellate Collector s order. Since the show cause notice had admittedly been issued more than six months after that date, it should be.-taken as outside the scope of Section 36(2) and, therefore, as invalid. Consequently, the proceedings initiated under Section 36(2) were also invalid and the show cause notice should be discharged. 6. The Bench asked Shri Ram for his comments with reference to the observations of the Supreme Court in the Geep Flashlight Industries case. In that case, which was one relating to proceedings initiated by the Central Government under the parallel provision of the Customs Act, namely Section 131(3), the Hon ble Supreme Court had occasion to comment on the meaning of the expression erroneously refunded appearing in Section 28, Customs Act. The Supreme Court had observed that in a case of erroneous refund, the period of issue of a show cause notice under Section 28 would be six months from the date of actual refund. If no refund had in fact been made, limitation could not be said to arise, as grant of refund was not actual refund. Accordingly, the Supreme Court held that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t paid could not be said to be a case where duty had been erroneously refunded . From the terms of the third proviso it would be seen that it was intended to apply only to a case where a fresh liability over and above that resulting from the order sought to be revised, was proposed to be imposed. The present case did not come within the scope of the proviso and, therefore, the show cause notice should be taken as issued within time. 10. In reply, Shri Ram reiterated the submissions already made by him. He further submitted that if the view put forward by Shri Tripathi was correct, this would mean that by not giving effect to the order of refund passed by the first appellate authority, the Department would be able to defeat the time-limit laid down under Section 36(2), and that this would result in a situation which was unfair to the assessees. 11. We thereafter called on Shri Tripathi to proceed with his arguments in support of the Collector s appeal. Shri Tripathi submitted that the refund claim had been made nearly two years after the end of the period to which it related, and was therefore clearly beyond the six months limit laid down in Rule 11. With reference to the obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed by Rules 11 or 173J, and dealt with accordingly. Shri Ram submitted that in the present case also the claim should not have been considered as made under Rule 11 but as one seeking an administrative order. 14. The Bench pointed out to Shri Ram that the Appellate Collector s reliance on the Patna High Court judgment in the case of Bata Shoe Company Ltd. appeared to have been misplaced. It was obvious that the case before the Patna High Court pertained to the period prior to 6-8-1977. Rule 11, as it stood, prior to that date, referred to claims for refund of duties or charges in consequence of their having been paid through inadvertence, error or misconstruction. With effect from 6-8-1977 Rule 11 had been amended and these ingredients had been omitted. The material part of the rule, as amended, read as follows :- Any person claiming refund of any duty paid by him may make any application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the date of payment of duty . It was pointed out to Shri Ram that the claim for refund in the present case was filed on 19-1-1979, i.e. after amendment of Rule 11, and would theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und inter alia that sub-section (5) did not refer to erroneous refund. However, the Supreme Court had also taken into account the provisions of Section 28, which were brought in by reference, and had in unmistakable terms pointed out that the grant or ordering of refund was different from the payment of refund. This will be seen from the following extracts of the judgment :- 18. Counsel for the appellant contended that even if refund has not been made, the date of refund will be the relevant date and six months would be calculated from 20 April, 1972 when refund was ordered and, therefore, the notice dated 10 February, 1975 will be hit by the provisions of limitation of six months from the relevant date. The contention of the appellant is wrong. It is only where refund has in fact been made and money has been paid, the relevant date will be six months from the date of actual payment for refund. 19. The contention of the appellant that refund will also be a case of short-levy is not correct. Section 28 speaks of three kinds of errors in regard to duties. One is non-levy, the second is short-levy and the third is erroneous refund. Levy is linked to assessment. Section 17 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excises and Salt Act would apply to refund claims made under those Acts. As pointed out by him, the view taken by the Tribunal on the parallel provisions in the Customs Act was approved by the Hon ble Supreme Court in its order dated 6-4-1984 in the case of Miles India Ltd. 21. The respondents had relied on the judgment of the Hon ble Patna High Court in the case of Bata Shoe Company Ltd. As observed above, that judgment was delivered with reference to a different situation, at a time when Rule 11 was differently worded, and was applicable only to claims for refund made on the ground of payment through inadvertence, error or misconstruction. The claim in the present case was made after Rule 11 has been amended to omit any reference to the nature of the ground on which the claim was made. It has been held by a larger Bench of the Tribunal in the case of Atma Steel (Pvt.) Ltd. and Ors. v. Collector of Central Excise, Chandigarh and Ors, 1984 (17) E.L.T. 331 (Tribunal) = (1984 E.C.R. 1409) that the period of limitation as permissible on the date of issue of a show cause notice (under Rule 10 or 10A) would be that as applicable on the date of issue of a show cause notice and not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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