Export rebate choice and refund recovery limitation under Central Excise rules were confined to the then-operative three-month period.

An exporter's choice between export under rebate and export under bond does not, by itself, create invidious discrimination where both statutory routes are available and the exporter voluntarily elects one; the discrimination challenge was rejected. Recovery of an allegedly erroneous refund was governed by the limitation period in force when the show-cause notice was issued, so the proceeding could continue only within the then-applicable three-month period. The recovery demand was therefore confined to refunds made within three months before the notice date.

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Issues: (i) Whether there was invidious discrimination between manufacturer-exporters who exported goods under Rule 12 of the Central Excise Rules and those who exported under Rule 13 of the Central Excise Rules. (ii) Whether recovery of the alleged erroneous refund was confined to the period of three months under Rule 10 of the Central Excise Rules as it stood on the date of the show-cause notice.

Issue (i): Whether there was invidious discrimination between manufacturer-exporters who exported goods under Rule 12 of the Central Excise Rules and those who exported under Rule 13 of the Central Excise Rules.

Analysis: Rule 12 permitted rebate of duty on exported goods only to the extent notified by the Central Government, whereas Rule 13 allowed export under bond without payment of duty. The availability of both procedures meant that the exporter could choose one or the other. The petitioners selected Rule 12 and obtained rebate accordingly. The record also showed that the petitioners were not compelled to abandon Rule 13 on account of any representation by the excise authorities.

Conclusion: The challenge based on discrimination failed and the contention was rejected.

Issue (ii): Whether recovery of the alleged erroneous refund was confined to the period of three months under Rule 10 of the Central Excise Rules as it stood on the date of the show-cause notice.

Analysis: The show-cause notice was issued when the original Rule 10, prescribing a three-month period, was in force. Although Rule 10 was later substituted and Section 11A was subsequently introduced, the recovery proceedings had already been commenced under the then-existing rule. The recovery could therefore proceed, but only to the extent permitted by the limitation period applicable when the notice was issued.

Conclusion: Recovery was restricted to refunds made within three months prior to the notice date.

Final Conclusion: The petition failed on the principal challenge and was dismissed, while the recovery demand survived only to the limited extent permitted by the three-month limitation under the then-operative rule.

Ratio Decidendi: Where an exporter is free to choose between two statutory export procedures, the mere fact that the procedures confer different rebate consequences does not amount to discrimination; and a recovery notice must be tested by the limitation period governing the rule in force when the notice is issued.

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