Limitation for excise duty refund starts only when annual exemption eligibility is finally ascertainable, not on each payment date.

Where entitlement to excise duty exemption depends on the assessee's aggregate turnover for the financial year, the limitation period for a refund claim does not start from each individual duty payment. It begins only when eligibility can first be finally ascertained at the end of the financial year, because a claim cannot reasonably be fragmented into multiple limitation periods arising on separate clearance dates. Applying that principle, the refund application was treated as timely, the time-bar rejection was set aside, and the matter was remitted for reconsideration on the basis that the claim had been filed within the prescribed period.

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Issues: Whether the limitation period for claiming refund of excise duty under the exemption notification commenced from each date of duty payment or only from the end of the financial year when the assessee's eligibility for exemption could be ascertained.

Analysis: The exemption operated on the basis of the assessee's total turnover during the financial year, and entitlement could be determined only after the close of that year. Since duty was being paid on clearances during the year while the assessee could not know in advance whether the turnover ceiling would be exceeded, a refund claim could not reasonably be required to be filed with each payment. The Court held that reading the limitation rules in the manner adopted by the authorities would fragment a single year's claim into multiple limitation periods beginning on different payment dates, which was inconsistent with the exemption scheme.

Conclusion: The limitation period for the refund claim commenced only from the last day of the financial year, and the refund application filed on 29-3-1971 was within time; the assessee succeeded on the limitation issue.

Final Conclusion: The orders rejecting the refund claim as time-barred were set aside, and the matter was directed to be reconsidered on the footing that the claim had been filed within the prescribed period.

Ratio Decidendi: Where entitlement to excise duty exemption depends on the assessee's aggregate turnover for the financial year, limitation for refund cannot begin on each individual duty payment date but starts when the year's eligibility can first be finally determined.

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