Time-barred refund and unpaid sale balance: accrual follows relaxation of limitation, while balance consideration stays revenue receipt.

A time-barred excise refund claim does not create an accrued right to refund merely on filing; where the statutory limitation under Rule 11 of the Central Excise Rules, 1944 had to be relaxed, income accrued only when the delay was condoned and the refund was sanctioned. A later receipt of the unpaid balance of the export sale price remained part of the trading receipt, because the earlier payment was only on account and the final amount merely completed the sale consideration for goods sold in the earlier year. On that reasoning, both amounts were treated as taxable in the Revenue's manner.

---

---

Issues: (i) Whether the refunded excise duty of Rs. 3,71,135.78 accrued as income when the refund application was made or only when the time-bar was relaxed and the refund was allowed; (ii) whether the sum of Rs. 46,711 paid as the balance of the export price for sugar exported in the earlier year was a revenue receipt of the accounting year.

Issue (i): Whether the refunded excise duty of Rs. 3,71,135.78 accrued as income when the refund application was made or only when the time-bar was relaxed and the refund was allowed.

Analysis: The refund claim for the relevant portion was filed beyond the period prescribed by Rule 11 of the Central Excise Rules, 1944. The rule was mandatory, and no refund could lawfully arise unless the delay was condoned or the rule was relaxed. Until such relaxation, the assessee had no enforceable right to refund, and the mere making of a time-barred application did not create accrual.

Conclusion: The amount of Rs. 3,71,135.78 accrued only when the delay was relaxed and the refund was sanctioned, not on the date of the refund application.

Issue (ii): Whether the sum of Rs. 46,711 paid as the balance of the export price for sugar exported in the earlier year was a revenue receipt of the accounting year.

Analysis: The earlier payment of Rs. 60 per quintal was only an on-account payment and the final sale consideration was settled later by the additional payment of Rs. 4.49 per quintal. That additional amount represented the balance of the sale price for goods sold in the earlier year and did not alter its character as trading receipt merely because it was received later.

Conclusion: The sum of Rs. 46,711 was a revenue receipt of the accounting year.

Final Conclusion: Both questions were answered against the assessee, and the tax treatment adopted by the Revenue was upheld.

Ratio Decidendi: A time-barred refund claim does not give rise to an accrued right to receive refund unless the statutory bar is relaxed, and a later receipt representing the unpaid balance of sale consideration remains a revenue receipt.

---