Refund of duty from a 100% EOU was upheld where the demand was time-barred and issued without statutory notice.

Refund of duty paid by a 100% export oriented undertaking was held maintainable where the Department's duty demand was raised beyond the prescribed limitation and without a notice under Section 11A of the Central Excise Act. The clearances to a domestic tariff area unit under an advance release order were treated by the Department as attracting duty equivalent to the countervailing duty element, but the liability was determined more than two years after clearance and through a procedurally defective demand. Because the refund application was filed within six months of payment, the claim could not be denied, and protest was immaterial. The refund was correctly allowed.

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Issues: Whether the refund of duty paid by the 100% export oriented undertaking was maintainable when the duty demand was raised beyond the prescribed limitation and without a notice under the statutory demand provision.

Analysis: Goods cleared by a 100% export oriented undertaking to a domestic tariff area unit against an advance release order were covered by Notification No. 82/92-C.E. dated 27-8-1992, as amended, and the Department later treated the clearances as attracting duty equal to the countervailing duty element. The liability was determined more than two years after clearance, but the demand was not raised through a regular notice under Section 11A of the Central Excise Act. Since the refund application was filed within six months of payment, and the demand itself was time-barred and procedurally defective, the refund claim could not be denied. The question of protest was not material in view of the timely refund claim.

Conclusion: The refund was correctly allowed and the Department's challenge failed.

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