Limitation for recovery of erroneous refund runs from the refund date, not later clearances, under central excise law.

Recovery of duty erroneously refunded under Notification No. 108/78-C.E. was held to be governed by the six-month limitation in Section 11A of the Central Excises and Salt Act, 1944. The rebate credited in the PLA was treated as a refund, so the relevant date for limitation was the date of that refund under Section 11A(3)(ii)(c), not the date of later clearances. A show cause notice issued beyond six months from the refund date was therefore time-barred, and the Department could not extend limitation by issuing a later notice.

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Issues: Whether recovery of the rebate credited under Notification No. 108/78-C.E. was barred by limitation under Section 11A of the Central Excises and Salt Act, 1944, and whether the relevant date for limitation was the date of credit/refund or the later date of subsequent clearances.

Analysis: Section 11A permits recovery of duty erroneously refunded only within six months from the relevant date, and Section 11A(3)(ii)(c) defines the relevant date, in the case of erroneous refund, as the date of such refund. The rebate already granted and credited in the PLA was treated as a refund, not a provisional adjustment. The subsequent clearances did not postpone the statutory starting point for limitation. The effective show cause notice was issued more than six months after the refund date, and the later notice only replaced the earlier notice without improving the Department's position on limitation.

Conclusion: The demand for recovery was time-barred and the assessee succeeded on the limitation issue.

Final Conclusion: The order of the Collector (Appeals) was upheld because the Department's recovery action was initiated beyond the statutory period of limitation.

Ratio Decidendi: For recovery of duty erroneously refunded, limitation runs from the date of refund itself under Section 11A, and a later event such as subsequent clearance cannot shift the relevant date.

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