COLLECTOR OF CENTRAL EXCISE Vs. POWER BUILD LTD.

JUDGEMENT

(1.) THIS is an appeal filed under Section 35 -B(2) of the Central Excises and Salt Act, 1944 by the Asstt. Collector (Legal) Central Excise, Baroda, against the order No. A -1735/BD -691/82, dated 4 -11 -1982 of the Collector Central Excise (Appeals) Bombay under which the respondent's appeal for refund of Central Excise duty amounting to Rs. 15,808/ - was allowed. The Asstt. Collector of Central Excise (Legal) Baroda has been authorised by the Collector of Central Excise Baroda to file the present appeal. The respondents in the present appeal M/s. Power Build Ltd. have also filed a cross objection against the same order dated 4 -11 -1982 of the Collector of Central Excise (Appeals) Bombay. Hence, both the appeal and the cross -objection have been heard together for the purpose of passing a common order.

(2.) SHRI Pattekar on behalf of the appellant, the Collector of Central Excise, Baroda has explained the facts of the case and argued that the order dated 4 -11 -1982 of the Collector of Central Excise (Appeals), Bombay requires to be set aside because the relief granted by him for refund of duty is not admissible, as the claims for refund filed by M/s. Power Build Ltd. with the Asstt. Collector of Central Excise, Anand are hit by the time bar under Section 11 -B of the Central Excises and Salt Act. The Asstt. Collector of Central Excise, Anand in his order No. V/18 -60/MP/80, dated 16 -5 -1981 rejected the claims for refund on the ground that M/s. Power Build Ltd. did not follow the prescribed procedure under Rules 174 -H and 173 -L of the Central Excise Rules, 1944. The Asstt. Collector did not go into the question that except for the duty paid on 26 -6 -1980 the payment of duties made on earlier dates were barred by limitation and hence the refund under Section 11 -B was not permitted. Possibly for this reason, the Collector (Appeals) also did not go into this question while passing his order dated 4 -11 -1982. This order' has, therefore, become erroneous and illegal and requires to be set aside. It was, further contended by the learned departmental representative that the respondents did not follow the prescribed procedure and did not ask for permission under Rule 51 -A to bring back duty paid goods in their L -4 premises. M/s. Power Build Ltd. possess the L -4 licence since 1975 and they were familiar with the Central Excise rules. While it was admitted that M/s. Power Build Ltd. had brought back the duty paid goods in their premises for making the necessary manufactures and repairs or reconditioning and that this process did not amount to a process of manufacture of a new commodity as defined under Section 2(f) of the Central Excises and Salt Act, 1944, the duty paid by M/s. Power Build Ltd. was under a mistake of law and the refund of this duty Was now hit by the time bar under Section 11 -B except in the last case and hence the refund was not admissible. Accordingly, Shri Pattekar requested that the appeal filed by Asstt. Collector of Central Excise (Legal), Baroda be allowed.

(3.) THE learned representative of the respondent Shri Khosala has argued that the Asstt. Collector and the Collector (Appeals) did not take into consideration the question of time bar in their orders and hence the appeal filed on behalf of the Collector of Central Excise, Baroda cannot be entertained on this ground. Shri Khosala has further argued that at the relevant time the Collector of Central Excise, Baroda had the power to review the order of the Asstt. Collector of Central Excise, Anand dated 16 -5 -1981 under Section 35 -A of the Central Excises and Salt Act, 1944, if he considered that the Asstt. Collector's order was illegal; but he did not review the same. As regards the grounds of appeal now taken up by the Asstt. Collector, Central Excise (Legal), Baroda, it is seen that the main consideration was that the claim of M/s. Power Build Ltd. was time -barred under Section 11 -B. This is not correct as the Company's claim was not filed under Section 11 -B of the Central Excises and Salt Act, 1944, but under the general provisions of law. Shri Khosala referred to the judgment of the Bombay High Court in the case of Bush India as reported in 1980 ELT, page 258 to show that in that case the Bombay High Court had held that the time limit under the departmental law would not apply where duty was collected without the authority of law. Similarly, Shri Khosala read out various judicial pronouncements as mentioned in the memo of cross objection to show that the time bar under Section 11 -B was not applicable to the refund claimed by M/s. Power Build Ltd. The authorities were cited mainly to buttress the respondent's arguments that the duty was not legally recoverable as the process carried out by the respondent did not amount to the manufacture of a new commodity. Quoting the judicial pronouncements Shri Khosala argued that the respondent made the claim for refund not under Section 11 -B. They approached the Asstt. Collector, Central Excise, Anand in his capacity as an Administrative Officer to give them the refund of duties which were not recoverable under the Central Excises and Salt Act. Since the duties were not paid under the Central Excises and Salt Act, the time bar under Section 11 -B was not applicable. Shri Khosala further argued that the Government of India in the Revision Application under old Section 36 had accepted this interpretation of the law and he had referred to the Government's decision in the memo of Cross Objection. Therefore, even on the basis of the Government's decision, the refund was admissible to the respondents. Since the respondents were. claiming the refund outside the machinery of the Excise Law, the alleged contraventions of Rules 173 -H and 173 -L would not come in their way. Shri Khosala also referred to the instructions contained in the letter No. 5/7/71 -CX. I, dated 8 -5 -1973 of the C.B.E.C. which were reproduced in the 1979 Cen. Cus. 152 -C to the effect that whether duty was paid under a mistake, the refund of the same could be allowed provided the claim is made within three years of the discovery of the mistake. Shri Khosala finally pointed that there have been decisions of the Tribunal that the time limits under the departmental laws should be applicable to the claims for refund of duties made before the departmental authorities. However, apart from this adverse factor, of the decision of departmental authorities like the Central Board of Excise and Customs, the Government of India, the High Courts and the Supreme Court were in his favour and therefore in the present case also the refund was correctly sanctioned. The present case of Power Build Ltd. was distinguishable from the cases considered by the Tribunal where claims were filed either under the Customs Act or the Central Excises and Salt Act. Since the claim of the Company was not under Section 11 -B, the refund was due to the Company and hence Shri Khosala prayed that the appeal on behalf of the Collector of Central Excise, Baroda be dismissed.