Vested refund rights under Central Excise rules were held to depend on when duty was paid and which Rule 11 applied

Refund entitlement under the Central Excise Rules was treated as a vested right arising when duty was paid. Duty paid before 6-8-1977 was held to fall under the old Rule 11, so the longer limitation period applied even if the refund application was made later. Duty paid on or after 6-8-1977 was governed by the substituted Rule 11, which restricted refund claims to the six months preceding the application. The commentary accepted the view that the amended rule operated prospectively and that the earlier decision relied on by the Revenue was distinguishable.

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Issues: Whether refund claims for duty paid before 6-8-1977 and on or after 6-8-1977 were governed by the old Rule 11 or the substituted Rule 11 of the Central Excise Rules, and whether the refund had to be restricted accordingly.

Analysis: The refund right was treated as a vested right arising on payment of duty. For duty paid before 6-8-1977, the claim was held to be governed by the old Rule 11, under which the longer limitation period applied even if the refund application was filed later. For duty paid on or after 6-8-1977, the substituted Rule 11 applied, and the refund claim was confined to six months preceding the application. The earlier Tribunal decision relied upon by the Revenue was distinguished, while the Bombay High Court view treating the refund right as vested and the new rule as prospective was accepted.

Conclusion: The appellants were entitled to refund in respect of duty paid between 8-6-1977 and 6-8-1977 in addition to the refund already granted, but the claim for duty paid after 6-8-1977 remained restricted to the six-month period under the substituted rule.

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