WIMCO LIMITED Vs. UNION OF INDIA UOI

JUDGEMENT

(1.) The only question that arises for consideration in this petition is if the claim of refund of excise duty paid by petitioner on certain goods which were exempted under notification was within time.

(2.) Although facts are undisputed yet it is necessary to narrate them in brief in order to appreciate if the order passed by opposite parties is well founded in law. In June, 1977 notification was issued under Rule 8(1) of Central Excise Rules of 1954 framed under Central Excises and Salt Act,1954 (hereinafter referred to as Act) exempting all excisable goods, on which the duty on excise was leviable and in the manufacture of which any goods falling under Item No. 68 of the First Schedule of the Act referred to as inputs had been used from so much of the duty of excise leviable on it as was equivalent of the duty of excise already paid on the inputs. After the notification issued in June, 1977, therefore, Central Excise Collectorate, Allahabad issued instructions on 7th December, 1977 clarifying and providing that the set off duty predetermined and approved by Assistant Collector will be allowable at the time of clearance of finished excisable products of manufacturers who intend to avail the set-off on observance of conditions mentioned therein. In March, 1978 the petitioner submitted an application to the Assistant Collector, Central Excise seeking his approval in set off of excise duty on the goods mentioned therein as they were used in manufacture and duty had already been paid on it. The application was, however, rejected by Assistant Collector, Central Excise as petitioner had not been showing and claiming amount of set off at the time of clearance of finished items from time to time. The Assistant Collector, held that the notification did not contemplate the cash refund on the duty paid on the inputs but contemplate the relief by way of set of procedure and as the petitioner did not avail of the set off amount at time of clearance the petitioner was not justified in claiming set off at latter stage. In appeal the order was set aside and it was held that there was no justification to decline approval of the classification list because it was not made within time. As petitioner had been seeking approval of classification list since March, 1980 and the department did not dispute maintenance of accounts by petitioner which established that the goods on which exemption was being sought were received under inspection of the officers. The appellate authority further observed that the petitioner was claiming set off and no refund which could still be granted by way of credit. In pursuance of the appellate order the petitioner wrote a letter to the Assistant Collector to allow the credit or set off as directed by the appellate authority, who in turn directed the Range Superintendent to allow credit in set off register. He, however, directed that the said credit shall not be utilised for payment of duty on matches for future clearance and then the petitioner should request the Asstt. Collector for adjustment. In pursuance of this direction the Range Superintendent, visited the petitioner's factory and determined the claim for set off and allow it to be credited as set off. The petitioner thereafter wrote to the Assistant Collector that the amount determined by the Range Superintendent may be refunded. On this application a show cause notice was issued as to why the application be not rejected as time-barred under Section 11-B of the Act, and after filing of reply it was rejected by the Assistant Collector and the order was maintained in appeal.

(3.) The question is whether Assistant Collector and the appellants authority were justified in refusing to allow the claim of petitioner on ground of limitation. It may be mentioned that the goods which have been used in the manufacture must have been such on which duty had been paid. On that there is no dispute. The instructions in this regard issued by the Central Excise Collectorate, Allahabad could not take away the right which accrued in favour of petitioner if the conditions of notification were complied only because it could not be allowed as set off at the time of clearance. Once the exemption is allowed then it operates with full force and take away the power to levy any duty. Its claiming as set off or refund was inconsequential. The restriction if any, on this was placed by instructions issued from the office for convenience than for anything else. The purpose of letter appears to establish authenticity that duty was paid at the time of clearance. But once the appellate authority found that from the record it was established that the goods were used in manufacture and the excise duty had been paid on it the question of granting set off at time of clearance become academic only. Moreover, it is not disputed that petitioner had raised the claim in March, 1978. The processing of the claim might have taken time in the office of opposite parties. But that could not in any manner effect or erode the claim for set off or refund as form the date the application was filed the petitioner became entitled as a matter of law for set-off of duty on goods which was being cleared and if the same was not done by the department either because it was anxious to verify or it had not finalised the matter by issuing necessary direction to the officer concerned it could not defeat the claim of petitioner. The delay if any was on part of opposite parties, in implementation of the notification the benefit under which became available from the moment the notification was issued. Limitation provided in Section ll-B(1) is not applicable to goods which were entitled to exemption. Therefore, even assuming that there was some delay it could not stand in way of petitioner. Further Sub-section (3) of Section 11-B reads as under :