Manufacturer-wise exemption entitlement and refund limitation run from the payment that creates the refund claim.

An exemption notification covering clearances made by or on behalf of a manufacturer had to be applied manufacturer-wise, so excess clearances were not to be assessed separately by isolating each factory. On that construction, the departmental approach denying the concession on a factory-by-factory basis was incorrect. For refund limitation under Rule 11, time ran from the payment that actually gave rise to the refund claim, namely the amount repaid under departmental direction, rather than from the earlier duty payment. The refund claims were therefore within time and the manufacturer-wise exemption was admissible.

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Issues: Whether the benefit of exemption Notification No. 198/76-C.E. was to be computed with reference to the manufacturer as a whole or separately for each factory, and whether the refund claim arising from repayment made under departmental direction was time-barred.

Analysis: The notification granted concession to specified goods cleared from one or more factories in excess of the base clearances by or on behalf of a manufacturer. On that language, excess clearances had to be reckoned at the level of the manufacturer as a whole, not by isolating each factory. The departmental view treating individual factories as separate units for denying the concession was therefore incorrect. The appellants had initially availed the concession with departmental approval, repaid the amount only when directed to do so, and sought refund promptly thereafter. Since Rule 11 prescribed a six-month period and the refund cause arose only after the second payment made in compliance with the departmental direction, limitation had to run from that later payment and not from the original duty payment.

Conclusion: The refund claims were not time-barred and the concession was admissible on a manufacturer-wise basis.

Final Conclusion: The appeals succeeded and the refund claims were allowed.

Ratio Decidendi: Where an exemption notification grants a concession for clearances made by or on behalf of a manufacturer, the entitlement must be determined at the level of the manufacturer as a whole; and for refund limitation, time runs from the payment that gives rise to the refund claim, not from an earlier payment later reversed under compulsion.

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