9911796707
TMI Blog1987 (7) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of payment of duty at the hands of the supplier. The respondents had applied for and obtained permission in terms of notification No. 201/79-C.E., dated 4-6-1979 for taking credit in respect of the duty paid under item 68 CET on the said tyre cord fabrics. But later the Supreme Court had held that tyre cord fabric would be classifiable under item 22 CET. Following the same the Department issued notice dated 12-2-1981 that the credit taken by the respondents of the duty paid on the tyre cord fabrics under item 68 CET was not available to the respondents and they were therefore liable to recredit the same. This related to the period from 19-9-1979 to 31-12-1980. The notice required them to show cause why the amount of Rs. 6,30,838.05P w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted under that item as the department was classifying the said article under item 68 CET only. It is only subsequently that in pursuance of a judgment of the Supreme Court that rayon tyre cord fabric was classified under item 22 CET. The case for the department is that since the Supreme Court had held that the proper classification for the rayon tyre cord fabric was item 22 CET the same never fell under item 68 CET and hence no credit was permissible under notification No. 201/79 in respect of duty paid on the rayon tyre cord fabric since such credit can be taken only with reference to duty paid on input falling under item 68 CET. The case for the department therefore is that the credit taken by the respondents during the period had been wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd confirmed under the provisions of paragraph 4 of the appendix to notification No. 201/79 there was no question of time bar since the said paragraph contained no provision within itself as to limitation for enforcing demand arising therefrom. Since, as earlier noted, this Tribunal has held that demands similar to the present one would be governed by provisions of Section 11A we have to hold that the demand was barred by time if considered with reference to the notice dated 2-7-1982 and substantially barred by time even with reference to notice dated 12-2-1981. But in view of the view that we are taking in the following paragraphs with reference to the applicability of the paragraph 3 or 4 of the appendix to the notification with reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rayon tyre cord fabric was classifiable under item 68 CET and hence benefit of notification No. 201/79 was available with reference to the said goods when utilized in manufacture of the tyres and rubber products of the respondents. But subsequently the Department took the stand that proper classification for the tyre cord fabric was under item 22 CET in view of the decision of the Supreme Court and, therefore, claimed that the credit already taken (on the basis that the goods fall under item 68) had been erroneously taken. It may be noted that the manufacturer of the tyre cord fabrics (M/s. Sriram Rayons of Kota) had admittedly applied for refund of duty paid under item 68. Paragraph 3 therefore appears to evidently cover the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rejection was on the basis it would be a fortuitous refund. But we may see that the order read as follows : 'Thus the Central Excise duty which has been ultimately paid by the tyre manufacturers [though paid by Sriram Rayons (i.e.) the manufacturers] has been taken as set-off by them. Since the central excise duty realised from the buyers has already been taken credit by the buyer the question of refund to the manufacturer of tyre cord fabric (i.e.) M/s. Sriram Rayons does not arise." Thus the Assistant Collector had rejected the refund claim because the amount of duty paid has already taken credit by way of set-off. Hence in effect he rejected the refund claim on the basis of set off but yet the department is raising a demand on the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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