Mandatory intimation for cancelled gate passes and limitation together defeated the excise refund claim.

A refund claim on cancelled gate passes was found untenable because the mandatory intimation to the proper officer under Rule 173G(2), proviso (vii), was not effectively complied with and the department could not verify that the goods had remained in the factory. The Tribunal treated the timing requirement as a revenue safeguard that could not be ignored. It also found the refund application was filed beyond the prescribed period and was therefore barred by limitation. The refund was consequently rejected, and the order granting refund was set aside.

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Issues: Whether the claim for refund of duty paid on cancelled gate passes was barred by limitation and failed for non-compliance with the requirement of intimation under Rule 173G(2), proviso (vii), of the Central Excise Rules, 1944.

Analysis: The claim was founded on cancellation of the gate passes and the assertion that the goods had not left the factory. The relevant rule required intimation of cancellation to the proper officer not later than the next day after cancellation, so that the department could verify that the goods remained in the factory and had not been removed earlier. On the facts, the intimation, though dated the next day, was received later, and the Tribunal held that such statutory safeguard could not be ignored. The refund claim was also received beyond the prescribed time, and was treated as barred by limitation under the applicable refund provisions.

Conclusion: The refund claim was held to be time-barred and not maintainable for want of proper compliance with the prescribed intimation requirement.

Final Conclusion: The order allowing refund was set aside and the rejection of the refund claim was restored.

Ratio Decidendi: Where cancellation of a gate pass is governed by a mandatory intimation requirement designed to safeguard revenue, failure to comply with that requirement, coupled with presentation of the refund claim beyond the prescribed period, renders the refund claim untenable.

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