Limitation for excise refund claims cannot retrospectively destroy a vested right where the old rule applied

A refund claim for duty paid before 6-8-1977 was held to fall under the earlier limitation regime in Rule 11 read with Rule 173-J of the Central Excise Rules, because the right to seek refund had accrued when the duty was paid. The substituted Rule 11, although procedural in form, could not retrospectively curtail an existing vested right of action by imposing a shorter six-month period, especially where the amending notification provided no saving clause or transitional breathing time. The claim was therefore not barred by limitation, the old Rule 11 applied, and the matter was remitted for decision on merits.

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Issues: Whether a refund claim for duty paid before 6-8-1977 was governed by the old limitation regime under Rule 11 read with Rule 173-J of the Central Excise Rules, or by the substituted Rule 11 prescribing a shorter period of six months.

Analysis: The refund right had accrued when the duty was paid under the earlier rule, which allowed a longer period for claiming refund. The substituted Rule 11, though procedural in form, curtailed the period for enforcing an existing right, and no saving clause or breathing time was provided in the amending notification. A subsequent shortening of limitation cannot be applied so as to destroy a pre-existing vested right of action. The earlier authorities supporting retrospective application were distinguished on the basis that they did not address the effect of a sudden curtailment of limitation without transitional protection.

Conclusion: The refund claim was not barred by limitation and the old Rule 11 applied. The matter was remitted for decision on merits.

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