Annual exemption refund limitation runs from financial year-end when eligibility depends on aggregate clearances.

Where exemption under an annual-clearance notification depends on aggregate clearances for the full financial year, eligibility is ascertainable only after year-end and earlier duty payments are treated as tentative. On that basis, the limitation period for a refund claim under Rule 11 of the Central Excise Rules, 1944 is computed from the close of the financial year, not from each individual payment of duty. The refund application filed in 1978 was therefore within time, and the limitation objection was rejected.

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Issues: Whether the refund application filed on 27.4.1978 was within time under Rule 11 of the Central Excise Rules, 1944 read with Notification No. 97/70 dated 01.05.1970.

Analysis: The competing views were whether limitation for refund should run from the date of each payment of duty or from the end of the financial year when eligibility under the annual exemption notification becomes ascertainable. The majority accepted that where the notification makes entitlement dependent on the aggregate clearances for the whole financial year, the benefit can be determined only after the year ends and the earlier payments assume a tentative character. In such a situation, the refund claim is to be computed with reference to the completion of the financial year, not each individual payment during the year.

Conclusion: The refund application was held to be within time, and the Revenue's objection based on limitation was rejected.

Final Conclusion: The appeal failed and the refund claim survived on limitation.

Ratio Decidendi: Where exemption under a notification depends on annual clearances and eligibility can be determined only at the close of the financial year, limitation for a refund claim runs from that point rather than from the date of each duty payment.

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