Tribunal Upholds Duty Refund Denial for Machine Repair: Compliance with Notification & Time Limitation

COLLECTOR OF CENTRAL EXCISE, KANPUR Versus LOHIA MACHINES LTD.

COLLECTOR OF CENTRAL EXCISE, KANPUR Versus LOHIA MACHINES LTD. - 1987 (32) E.L.T. 182 (Tribunal) Issues:
1. Claim for refund of duty on repaired/re-conditioned machines.
2. Compliance with conditions specified in Notification No. 5/70.
3. Applicability of time limitation under Section 11B of Central Excises and Salt Act, 1944.

Analysis:

Issue 1: Claim for refund of duty on repaired/re-conditioned machines
The case involved a claim for refund of duty by M/s. Lohia Machines Ltd. on repaired/re-conditioned machines. The Assistant Collector rejected the claim citing non-fulfillment of requirements under Rule 173H and time bar under Section 11B. The Collector (Appeals) allowed the appeal, stating that the respondents had substantially complied with the rule and the time limit should be calculated from the date of receipt. The Department appealed against this decision.

Issue 2: Compliance with conditions specified in Notification No. 5/70
The Collector had issued Notification No. 5/70 under Rule 173H, specifying conditions for claiming exemption. The respondents argued that the notification was not legally binding. However, the Tribunal held that the conditions specified in the notification were binding on the appellants if they wanted to avail the benefit of Rule 173H. The Tribunal cited precedents to support the binding nature of such notifications issued by the Collector.

Issue 3: Applicability of time limitation under Section 11B
The Tribunal referred to previous judgments and concluded that the time limitation under Section 11B of the Central Excises and Salt Act, 1944, cannot be relaxed. The Tribunal highlighted that even the High Court may choose not to lift the bar of limitation for ordering a refund of duty. The Tribunal upheld the decision of the Assistant Collector and set aside the order of the Collector (Appeals).

In conclusion, the Tribunal allowed the appeal, reinstating the decision of the Assistant Collector and rejecting the claim for refund of duty on repaired/re-conditioned machines by M/s. Lohia Machines Ltd.