Refund limitation under Rule 11 runs from duty payment where exemption entitlement is identifiable during the financial year.

An exemption notification allowing clear ascertainment of entitlement during the financial year does not defer the accrual of the refund claim until year-end. Where the assessee can identify excess clearances and claim the benefit immediately under the self-removal procedure, the specific limitation rule in Rule 11 applies from the dates of payment of duty. The reasoning used for end-of-year computation in small-scale exemption cases was held inapplicable because the notification itself provided a definite method for determining the base period and base clearances. The refund claim was therefore time-barred and the departmental rejection was upheld.

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Issues: Whether the refund claim arising from Notification No. 198/76-C.E. was governed by Rule 11 of the Central Excise Rules, 1944 so that limitation ran from the date of payment of duty, or whether the claim could be computed from the end of the financial year in which the excess clearances occurred.

Analysis: The exemption notification applied to clearances during a financial year and provided a definite method for determining the base period and base clearances. The assessee could know, during the course of the year itself, when current clearances exceeded the base clearances and could avail the benefit immediately under the self removal procedure. The considerations that supported end-of-year computation in cases relating to small scale exemption notifications were not present here. Nothing in the notification postponed accrual of the right to exemption until the close of the financial year, and therefore there was no basis to displace the specific limitation rule.

Conclusion: The claim for refund was time-barred under Rule 11 because limitation ran from the dates of payment of duty and not from the end of the financial year.

Final Conclusion: The refund claim could not be entertained as within time, and the rejection by the departmental authorities was upheld.

Ratio Decidendi: Where an exemption notification permits immediate ascertainment of entitlement during the year, the refund limitation under Rule 11 runs from the date of payment of duty and is not postponed to the close of the financial year.

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