1990 (9) TMI 106 - SC - Central Excise

Refund Claim Within Limitation When Duty Paid Under Provisional Assessment; Limitation Runs From Final RT-12 Assessment, Section 11B

SC held that duty payments made by the assessee between 1-4-1985 and 3-6-1985 were in the nature of provisional assessments, as the classification list ... Claim for Refund - Limitation for filing an application under Section 11B of the Central Excises and Salt Act - appellant filed a classification list as per Rule 173B of the Central Excise Rules, 1944 on 26-3-1985 in respect of their products furnishing the tariff rate of 15% ad valorem by mistake instead of furnishing the effective rates of duty as per Notification No. 85/85-CE, dated 17-3-1985 - Held that:- Section 11B says that the period of 6 months 'in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof'. In this case, the classification list filed by the appellant for the period 1-4-1985 to 27-4-1985 was not approved till 3-6-1985. From the provisions of Rules 173B, 173C and 173CC, which we have set out earlier, it will be seen that clearances can be made only after the approval of the list by the particular officer. However, if there is likely to be delay in according the approval the officer can allow the assessee to avail himself of the procedure prescribed under Rule 9B for provisional assessment of the goods. In the present case between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account. The clearance of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment. In such a situation clause (e) of para (B) of the Explanation under Section 11B will be attracted. In this case the RT-12 Return for the month of April, 1985 was filed on 8-5-1985 and the same was assessed on 29-10-1985. It is, therefore, only from the date of this assessment that time-bar in Section 11B will operate. In the present case the refund application had been filed on the 30th of October, 1985. It cannot, therefore, said to be time barred. In favour of assessee. Issues:1. Starting point of limitation for filing a refund claim under Section 11B of the Central Excises and Salt Act, 1944.Analysis:The case involved an appeal under Section 35L of the Central Excises and Salt Act, 1944, against an order of the Customs, Excise and Gold (Control) Appellate Tribunal. The appellant, a manufacturer of Hacksaw blades and Bandsaw Blades, mistakenly filed a classification list with an incorrect tariff rate, leading to the payment of excess excise duty. The issue arose when the refund claim was partly rejected by the Assistant Collector of Central Excise on the grounds of being time-barred. The appellant contended that the starting point of limitation for filing a refund claim should be the date of assessment, not the date of payment of duty as held by the authorities.The appellant's argument was based on the interpretation of Section 11B of the Act, which outlines the procedure for claiming a refund of excise duty. The appellant maintained that the date of assessment should be considered the date of payment of duty, contrary to the authorities' view. The Court agreed with the appellant's argument that the date of assessment should be the relevant date for filing a refund claim under Section 11B. The Court noted that the duty paid by way of debit in the personal ledger account was an effective payment, not merely an adjustment entry.Furthermore, the Court delved into the procedural aspects of excise duty payment, specifically the self-removal procedure under Rule 173B. The Court highlighted the requirements for approval of classification and price lists by the Proper Officer before clearance of goods. The Court emphasized that clearances could only be made after the approval of the list by the Proper Officer, and in cases of delay, provisional assessment procedures could be followed. The Court concluded that in the appellant's case, the goods were cleared provisionally between the filing of the classification list and its approval, making the refund application timely and not time-barred.In conclusion, the Court accepted the appellant's contention regarding the starting point of limitation for filing a refund claim under Section 11B, allowing the appeal and ruling in favor of the appellant. The Court held that the appellant was entitled to the full refund amount, and there was no limitation bar as determined by the Tribunal.