Ex-gratia refund claims by khandsari sugar manufacturers are outside the usual refund limitation and may be treated administratively.

A trade notice clarified that the limitation period for statutory refunds under Rule 11 of the Central Excise Rules does not apply to ex-gratia refund claims by khandsari sugar manufacturers for the period when the compound levy scheme was not in operation. It also stated that a statutory appeal under Section 35 may not lie against rejection of such a refund claim, but the matter can be considered as an administrative representation by the competent authority. The appeal and revision treated as time-barred were therefore not valid on that basis, and the claim was to be restored for decision according to law.

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Issues: Whether the rejection of the appeal and revision as time-barred under Section 35 of the Central Excises and Salt Act, 1944 was valid in the context of an ex-gratia refund claim by a khandsari sugar manufacturer.

Analysis: A trade notice issued by the Collector of Central Excise, based on advice of the Ministry of Law, clarified that the time limit applicable to statutory refunds under Rule 11 of the Central Excise Rules would not govern ex-gratia refund claims made by khandsari sugar manufacturers for the period when the compound levy scheme was not in operation. The clarification further indicated that, while a statutory appeal under Section 35 may not lie against the rejection of such a refund claim, the matter could be entertained as an administrative representation by the appropriate authority.

Conclusion: The rejection of the appeal and revision as time-barred was held to be not valid. The appeal was directed to be restored and treated as an administrative representation for decision according to law.

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