Full Judgment
The plea, as to the show cause notices being barred by time, was rejected on the view that the party claimed refund for a consolidated amount of Rs. 10,92,360.16 for the entire period from September 1973 to June 1980, without disclosing the fact that the exemption on the goods has been withdrawn by means of Notification No. 67/73 dated 1.3.1973, which substituted Notification No. 206/63-CE, amended by Notification No. l23/65-CE and that because of this failure to disclose about the change by means of Notification No. 67/73, the party's conduct was tantamount to suppression of material facts, which led to the erroneous refund, and that the party was not entitled to refund, for the period starting from 1.3.1973 and that clearances for the said period may have to be leviable to excise duty at the rates specified in Notification No. 67/73 dated 1.3.1973, and that, because of this suppression of facts, the extended period of limitation was available. Subject to the modification that, for the period from 1.4.1970 to 28.2.1973, exemption was not sustainable, the appeal of the party was rejected.
3. The appeal by the Collector of Central Excise, Bhubneshwar (Appeal No. ED/292/84-B) is directed against partial modification of the order of the Assistant Collector, by Collector (Appeals), inasmuch as refund allowed to the party for the period upto 28.2.1973 had been upheld; the plea being that the party having made a consolidated claim for refund in spite of the change in the notification brought about by Notification No. 67/73, the Collector (Appeals) has erred in holding that the amount of duty relating to the period from 1.4.1970 to 28.2.1973 be paid back to the party. H is contended that no amount had been realised from the party during the said period and, consequently, question of any refund did not arise and that it had been wrongly presumed by the Collector (Appeals) that the amount of Rs. 6,67,367/- related to the period 1.4.1970 to 19.7.1973; whereas it actually related to the period 1.3.1974 to 17.6.1977.
4. Assessee's appeal, on the other hand (Appeal No. ED/2838/84-B) is directed against confirmation of notice against them, even for part of the period subsequent to 1.3.1973, on the contention that authorities below erred in rejecting their plea as to show cause notice being barred by time under Section 11A.5. We heard both the appeals together, having arisen out of a single order, and both the parties seem to be aggrieved inasmuch as whereas the Assistant Collector had directed recovery of an amount, of Rs. 6,67,376/ -, holding the same to have been erroneously refunded; the Collector (Appeals) allowed the appeal partly holding that, although appellants' plea that the whole of the demand was barred by time was not tenable, but the fact remains that prior to the amendment by Notification No. 67/73 dated 1.3.1973, the party was entitled to exemption in respect to the goods: namely, M.S. rods manufactured during the period 1.4.1970 to 28.2.1973. It was, accordingly, directed that refund had been made erroneously only in respect to goods cleared during the period 1.3.1973 to 19.7.1973, during which period, duty was to be realised in terms of Notification No. 67/73 and, only to that extent, the refund allowed by the Assistant Collector could be considered as erroneous and that Assistant Collector should work out the duty realisable from the party in terms of his above order and work out the refund payable to the party, accordingly. It was directed in the end that balance out of the said amount of Rs. 6,67,376/ - be refunded accordingly.
6. Whereas party's appeal (Appeal No. 2838/84-B) is directed against this order on the contention that refund having been allowed by order dated 12.10.1981. recovery of the refund, characterised as erroneous by means of proceedings initiated by notice dated 13.7.1982, raised under Section 11A of the Central Excises & Salt Act, 1944, was, on face of it, barred by time and nothing could be directed to be recovered on the basis of this show cause notice. They contend that there was no suppression of facts by them nor any mis-declaration or mis-statement inasmuch as they applied for refund after the Central Board of Excise & Customs passed an order in their favour on an earlier appeal having been filed on the same issue; which order was given on 29.2.1980, being Order No. 167B of 1980, and that the Assistant Collector passed an order of refund after full consideration, and the recovery now demanded by means of show cause notice issued on 13.7.1982, was certainly barred by time, and that their plea to that effect was wrongly rejected by the Collector (Appeals), imputing suppression and mis-statement to them, simply because they had applied for refund of duty paid, for the entire period: including the period from 1.4.1973 to 19.7.1973 which covered the period subsequent to amendment of the earlier Exemption Notification by Notification No. 67/73 dated 1.3.1973.
7. They further plead that the refund order has been passed by means of a proper adjudication order dated 15,10.1981, after notice to show cause on their refund application had been issued on 1.7.1981 by the Assistant Collector and that, as such, there was no scope for any refund having been allowed erroneously.
8. The Department has come up in appeal... Appeal No. ED (SB) A782/84-B against that part of this order whereby the Collector (Appeals) has held that refund was rightly due to the party for the period upto 28.2.1973 because amendment to the Notification came into effect from 1.3.1973. It is pleaded that no amount of duty had been paid during this period and, so, question of refund did not arise.
9. We have considered the pleas canvassed on both sides. It is manifest from record that refund of total amount of Rs. 10,92,360.16 was allowed to the party by means of a cross cheque dated 12.10.1981 which was issued in settlement of their refund claim. Party's content ion, that this was done after due adjudication and after a notice to show cause had been issued on 1,7.1981 after they filed the refund claim, has nowhere been controverted. The plain allegations in the notice dated 13.7.1982 are that the party had wrongly applied for refund for the entire period of September 1973 to June 1980, in spite of the fact of amendment to the notification by Notification No. 67/73 dated 1.3.1973, and also when Notification No. 206/63, as amended, had ceased to have application by means of Notification No. 19/74 dated 1.3.1974. The excess amount on these counts; namely, as a consequence of amendment of Notification resulting in partial or total withdrawal of the exemption was worked out as Rs. 6,67,376/- and the demand for recovery was raised by a plain reference to Section 11A of the Act.
10. On these premises, we find full force in the party's contention that there was no suppression or mis-statement on their part and that they made a plain application for refund of the duty paid after the order of the Board came in their favour which was passed on 29.2.1980.
It is to he appreciated that there is no allegation in the show cause notice that any facts were withheld, or any misrepresentation was made or that there was suppression of any material information. The whole proceedings are based on the factum of amendment to notification and consequential withdrawal--partially or wholly of the exemption allowed on M.S. rods made out of duty-paid pencil ingots. We find ample justification in the party's contention that Excise authorities were supposed or expected to be more in the know of any change or amendments in the notifications, as compared to the assessee. This plea has pertinent force because, undisputedly, refund was allowed to the party, after a show cause notice having been issued, and after a proper adjudication order having been passed.
11. In face of these facts, we think that allegations of mis-statement, so as to attract extended period of limitation, are not well placed, and thus the notice issued on 13.7.1982 was certainly beyond the permissible period of six months, as warranted by Section 11A of the Act. The demand being, thus, barred by time, we do not consider it further necessary to go into the fact as to whether the duty had been actually paid or not for which the refund had been allowed inasmuch as there is no such allegation in the show cause notice dated 13.7.1982, and this being entirely a question of fact which, apart from the presumption that it ought to have been verified when the Assistant Collector passed the adjudication order resulting in refund to the party; otherwise also does not arise for consideration in the view we take; namely, that the demand was barred by time. As a result, the appeal of the Collector of Central Excise -being Appeal No. ED (SB) A.No. 292/ 84-B-is liable to dismissal whereas appeal of M/s Re Rolling Mills, Hirakud-being Appeal No. ED(SB) A. No. 2838/84-B-is allowed on the question of the demand for recovery, in so far it was confirmed by the impugned order, being barred by time. Ordered accordingly.