Limitation for duty recovery governs excess credit recoupment under a concession notification, not an open-ended demand

Excess credit granted under a duty concession notification was treated as akin to a refund of duty, so recovery of the erroneous credit was held subject to the limitation bar applicable to duty recovery. Even though Rule 56AA(4) did not itself prescribe a limitation period, the Department could not recoup the credit dehors the statutory time limit under Section 11A of the Central Excises and Salt Act, 1944. The attempted recovery had to be tested as a duty recovery or short-levy matter, and the bar of limitation therefore applied.

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Issues: Whether recovery of excess credit granted under a duty concession notification is governed by the bar of limitation under Section 11A of the Central Excises and Salt Act, 1944, and whether such erroneous credit can be recovered without any limitation under Rule 56AA(4) of the Central Excise Rules.

Analysis: Excess credit allowed by adjustment in the personal ledger account pursuant to a notification granting duty concession was treated as analogous to a refund of duty. The reasoning followed earlier decisions holding that recovery of wrong or excess credit, even where Rule 56AA itself did not prescribe a limitation period, is nonetheless subject to the limitation applicable to recovery of duty. The Court adopted the view that such recovery cannot be made dehors the bar of limitation, and that the Department's attempt to recoup erroneous credit must be tested as a duty recovery/short-levy matter.

Conclusion: The bar of limitation applies to recovery of the excess credit, and the appeal fails.

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