Rule 56A recovery limitation governed by special provision, making the excise show-cause notice time-barred.

Recovery of proforma credit allowed under Rule 56A(2) was governed by the special limitation in Rule 56A(5), not by Section 11A of the Central Excises and Salt Act, 1944, where the credit had been granted due to a tariff misclassification by excise authorities. The limitation period ran from the date the credit was allowed, because the case fell within credit granted through error or mis-construction on the part of an officer. A later refund order in favour of the supplier did not extend or reset time. The show-cause notice was therefore time-barred, and the reference was answered in favour of the assessee.

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Issues: Whether the recovery contemplated in the proviso to Rule 56A(2) of the Central Excise Rules, 1944 was governed by Section 11A of the Central Excises and Salt Act, 1944 or by the limitation prescribed in Rule 56A(5), and whether the show-cause notice was within time.

Analysis: The reference arose from recovery of proforma credit allowed under Rule 56A(2) after the duty paid by the supplier was subsequently varied. The question was whether the general machinery of Section 11A controlled such recovery or whether Rule 56A(5), which specifically deals with credit allowed on account of error, omission or mis-construction on the part of an officer, furnished the governing limitation. The Court held that the credit had been allowed because of a tariff misclassification by the excise authorities, bringing the matter squarely within Rule 56A(5). It further held that the limitation under that rule runs from the date of such credit, and not from the later date on which refund was ordered in favour of the supplier.

Conclusion: Section 11A was held inapplicable to the recovery in question, and Rule 56A(5) of the Central Excise Rules, 1944 was held to apply. The show-cause notice was therefore time-barred, and the answer to the reference was in favour of the assessee.

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