Judgment:
1. M/s. Jhunjhunwala Rolling Mills have filed this appeal under Section 35B of the Central Excises and Salt Act, 1944 against the order No. B 2271/NG/141/82 dated 28-1-1983 passed by the Collector of Central Excise (Appeals). Bombay confirming the order No. I/Iron & Steel/81 dated 25-4-1981 of the Asstt. Collector of Central Excise, Amravati rejecting 12 refund claims of M/s. Jhunjhunwala Rolling Mills under Section 11B as time barred. The brief facts of the case are that M/s.
Jhunjhunwala Rolling Mills have filed these 12 refund claims of M/s.
Jhunjhunwala Roiling Mills under Section 11B as time barred. The brief facts of the case are that M/s. Jhunjhunwalia Rolling Mills have filed these 12 refund claims on 3.1.81 and 4.2.81 for a total amount of Rs. 10,83,161.45 on the ground that the steel produce manufactured by them were not dutiable under T.I. No. 26AA of the Central Excise tariff.
However, the period to which the claims related was from 2.3.66 to 30.12.77. Since these claims were received after the expiry of the limitation period prescribed under Section 11-B of the Central Excises & Salt Act, 1944 they were rejected by the Asstt. Collector of Central Excise, Amravati. For the same reason, their first appeal to the Collector of Central Excise, Bombay was also unsuccessful. Hence M/s.
Jhunjhunwalla Rolling Mills have approached the Tribunal by way of the present appeal.
2. On behalf of the appellants advocate Shri Phandis drew our attention to order No. V-2(26AA)1599/79/6051 dated 22.9.79 of the Appellate Collector of Central Excise, Bombay under which he allowed the appeal of M/s. Jhunjhunwalla Rolling Mills and under this order he upheld the classification of Cross Section of rectangular bars of less than 3 mm thickness and 125 mm width under item 26AA. He further held that these products were eligible to exemption from central excise duty. Shri Phandis drew our attention to the concluding portion of the Appellate Collector's order which allowed the first appeal of M/s. Jhunjhunwalla Rolling Mills with consequential relief, if any. Shri Phadnis further clarified that this order of the Appellate Collector was against the order of the classification passed by the Asstt. Collector of Central Excise, Amravati on the classification list No. 14 of the company effective from 22.6.78. Based on this order, the appellants filed 15 claims for refund of duty with the Asstt. Collector of Central Excise.
The Asstt. Collector sanctioned 3 refund claims for the respective amounts of Rs. 2,16,16,087.82, Rs. 52,545.90 and Rs. 31,579.44 while he rejected the remaining 12 refund claims on the ground of limitation.
Shri Phadnis contended that the order of the Asstt. Collector rejecting the refund claims as time barred was not correct as the order of the Appellate Collector directed consequential relief to be granted to M/s.
Jhunjhunwalla Rolling Mills. He stated that Section 11.B could be divided in 3 parts. Sub-Sec. (1) provided for the time limit of six months from the date of payment of duty for claiming refund, Sub-sec (2) which was a procedural requirement and sub-sec (3) which provided for grant of refund of any duty which becomes due as a result of any order passed in appeal. Shri Phadnis stated that applications for refund of M/s. Jhunjhunwalla Rolling Mills fell within the last category as these refunds arose as a consequence of the Appellate Collector's order. However, for expediting the receipt of money through refund, the assessee have filed the refund claims in question. This was in accordance with the prevailing practice of the department at the relevant time. The applications for the refund were also filed in the requisite form. The Asstt. Collector granted the refund with reference to 3 claims and he rejected the claims for the refund in respect of the remaining 12 claims. Shri Phadnis contended that this was not proper or legal on the part of the Asstt. Collector. The Asstt. Collector had accepted the order of the Appellate Collector and there had been no appeal against this order or any action for reviewing the appellate Collector's order. In reply to a question from this Bench, the advocate clarified that the 3 claims under which the refund was sanctioned, covered payment of duty under protest by the licensee. He further clarified that the duty in respect of the remaining 12 claims was not paid under protest. Continuing his arguments, Shri Phadnis added that the classification list No. 14 was filed on 18.5.79 and this was effective from 22.6.79. The Asstt. Collector approved this on 18.5.79.
The advocate further argued that the Asstt. Collector's order for rejecting the claims as time barred was not correct. In this behalf, he drew our attention to the appellants' letter addressed to the Supdt. of Central Excise, Nagpur. He also drew our attention to the Supdt. of Central Excise Nagpur's letter dated 15.3.68 addressed to appellants and his further letter dated 8.4.68 addressed to the appellants.
However, in reply to the query, Shri Phadnis confirmed that the appellants did not pay duty under protest at the relevant lime.
However, Shri Phadnis ascribed the reason for not doing so to the fact that the Central Excise Officers did not permit them to make the required endorsements on the A.R.I. applications regarding the payment of duty under protest. Shri Phadnis argued that this would not be relevant for denying the refund as the earlier classification list had been approved by the Asstt. Collector. He relied on the decision in the case of the Nandan Iron & Metal Industries reported in 1978 ELT J 47 in support of his contention. He further argued that the Appellate Collector's order did not confine the grant of consequential relief to any period of time. Hence the relief granted under this order could be claimed without the operation of the time bar. The advocate further contended that the refunds to the appellants are consequent to the order of the Appellate Collector. In that case, the department was not permitted to examine whether the claim was time barred. In this behalf, he relied on the decision of the CEGAT in the case of Madras Rubber Factory reported in 1983 ELT 1833. In other words, the learned advocate contended that when the Appellate Collector granted the refunds, the lower authority could not disallow it on the ground of time bar. The advocate further relied in this behalf, on the Government of India's decision in the case of Terna Shetkari Sahakari Karkhana reported in 1980 Cen-Cus 101D. He added that this decision had been reported on page 144 of Tara-purewala's Book " Law of Central Excise " IInd Edition. On the same page another decision had been reported in the case of G.D. Mining v. Union of India 1974 TLR 2424. Shri Phadnis added that he would rely on the aforesaid decisions. Shri Phadnis concluded by contending that sub-sec.(3) of Section 11-B was independent of sub-Sec.(1). It was only in case of Sub-Sec. (1) of Section 11B that the claim for refund was required to be made within a period of six months. Since, this would not apply in the present case, Shri Phadnis submitted that the orders of the lower authorities were wrong and that they required to be set aside.
3. On behalf of the Collector, Shri Pattekar contended that the 12 claims for refund of duty for the total amount of Rs. 10,83,161.45/- for the period 2.3.66 to 30.12.77 were filed after the Appellate Collector's order dated 22.9.79. These claims had been hit by time bar under Section 11B and therefore they had been correctly rejected. The other 3 claims were not barred by limitations as the duty for the relevant periods had been paid under protest. In this behalf Shri Pattekar drew our attention to the order No. V-2(26AA)1959/81/12J dated 28.1.83 of the Collector of Central Excise(Appeals) Bombay which set out the salient facts of the case. For the period covered by 12 refund claims the assessees did not pay duty under protest. Shri Pattekar supported his contention on the basis of the Asstt. Collector's finding in his order dated 25.4.81. Shri Pattekar further argued that the contention of the appellants that the refund claim arosed out of the decision of the Appellate Collector was not correct. This had been highlighted in the order dated 28.1.83 of the Collector of Central Excise (Appeals) Bombay. Shri Pattekar further submitted that since the 12 claims were time barred under Section 11B they had been correctly rejected. In this behalf he relied on the decision of the larger Bench of this Tribunal in the case of Mile's India Ltd. reported in 1983 ECR242D. He further pointed out that this decision of the Tribunal had been confirmed by the Supreme Court in the same case as reported in 1985 ECR 289. In view of these judicial pronouncements, the orders of the Asstt. Collector and Collector of Central Excise (Appeals) were quite correct and Shri Pattekar prayed that the same be confirmed.
4. We have examined the submissions made on both the sides. The main plunke of the appellants for claiming refund is the Appellate Collector's decision containing in his order dated 22.9.79 upholding the classification of the steel produced under Item 26AA and holding that the products were eligible to exemption from central excise duty under that item. The appellants contended that this decision should apply to the earlier classifications and that as a result of this decision they are automatically entitled to refund of duty as the Appellate Collector granted consequential relief to them. At the outset we may observe that this is a fallacious contention. The Appellate Collector's decision in his order dated 22.9.79 was with reference to the classification list of the product which was required to be filed in terms of Rule 173B. A decision of the appellate authority in this behalf cannot over-ride the other statutory provisions of claiming refund as enjoined under Section 11B. When the Appellate Collector allowed the appeal with consequential relief if any he could not have implied that the relief should be granted suo moto without any application from the assessee. The particular appeal of M/s.
Jhunjhunwalla Rolling Mills did not involve any claim for refund of duty. If it had been so, the contention of the learned advocate would have been correct and this type of relief would have been covered by Section 11B(93) which did not require any claim to be filed for the refund. But this was an order in respect of the classification of the products manufactured by the appellants. To get the benefit of this order, the law required that the appellants should make claim for refund in terms of Section 11B. Indeed the appellants have made such claims and these were not in accordance with the prevalent practice of the department and were not made with a view to expediting the payment of refunds as claimed by the appellants but they were filed under the provisions of law for claiming refund. The appellants seem to have mixed up two issues to urge that the relief should have been automatic.
This is not so as observed above. In view of these circumstances, the various judicial pronouncements cited by the learned advocate of the appellants are not applicable to the present appeal. It may further be added that there are no provisions in Section 11B that would authorise suo moto refund to the assessee as contended by the appellants except in case of an order passed in appeal or revision. The Appellate Collector's order was not one which concerned the claim for not but it only determined a question of classification under Rule 173B. The provisions of Rule 173B cannot over-ride the legal requirements of Section 11B. Hence we do not find any merit in the contention of the learned advocate. In these circumstances, we find that the orders of the Asstt. Collector and the Collector (Appeals) are quite legal and correct. The same are confirmed and the appeal of M/s. Jhunjhunwalla Roiling Mills is rejected.
5. The one and the only question that arises for consideration is whether the appellant's claim for refund of duty flows from the order dated 22.9.79 passed by the appellate Collector of Central Excise & Customs, Bombay.
6. The facts necessary for the disposal of this appeal and the contentions urged by either side had been set out in the order of brother Shri Dilipsinhji.
The hot rolled rectangular bars and flat bars below .3 mm thickness and below 125 mm in width, manufactured by the appellants from fresh unused re-rollable duty-paid scrap were classified by the Central Excise Authorities under Tariff Item 26AA(iii) of the First Schedule to the Central Excise and Salt Act. And the appellants were paying Central Excise duty accordingly. Sometime in November, 1979 by reason of the Trade Notices issued by the Baroda, Bangalore, Cochin Collectorates, the appellants came to know that their products were classifiable under tariff them No. 26AA(ia). Therefore, they requested by their letter dated 22.6.78 to reconsider the classification list filed earlier and also requested to classify their product under tariff item No. 26AA (ia). The appellants also filed fresh classification list on 1.8.78.
They also made a declaration on 6.10.78 that their product flat bars are below 3 mm in thickness and less than 125 mm in width. But the appellants on 5.7.79 received an order classifying their product as failing under item 26AA(iii). They were also called upon to pay Central Excise duty on said product as per Notification No. 76/72 dated 17.3.72. The Asstt. Collector confirmed the classification and thereafter the appellant preferred an appeal and in their appeal filed before the Appellate Collector they referred to the order of the Government of India in similar matters reported in 1979 ELT page J. 44 and also the previous order of the Appellate Collector in appeal No.806/78 dated 17.7.78. The appellate Collector by his order dated 22nd September, 1979 relying on his order No. 804/78 dated 18th July, 1979, allowed the appeal with consequential relief.
7. In his order brother, Dilipsinghji took a view that when the Appellate Collector allowed the appeal with consequential relief if any, he could not have implied that the relief should be granted suo moto without any application from the assessee. He also observed that the appeal of the present appellant did not involve any claim for refund of duty and since the order related to the classification of the product manufactured by the appellant, the appellant should make claim for refund under Section 11-B. He also observed that the provisions of Rule 273B cannot over rule the requirement of Section 11-B. With great respect, I am unable to accept the view expressed by brother Dilipsinhji with regard to the interpretation of Section 11-B is concerned.
8. Sub-section (1) of Section 11-B requires that the claim for refund of duty should be made by means of an application before the expiry of six months from the relevant date but then the limitation of six months would not be applicable where duty has been paid under protest.
Sub-section 3, however, requires an Asstt. Collector of Central Excise to order refund without their being any application by the claimant if the refund becomes due to the claimant as a result of any order passed in appeal or revision.
9. Before the Appellate Collector, the present appellants have contended that they by their letter dated 22.8.78 requested the Department to reconsider the classification and thereafter on 1.8.78 they submitted fresh classification list and on 18.5.79 they received the classification list classifying their product under tariff item No.26 AA(iii) and they were called upon to pay Central Excise duty on the said product. Thus if the appellants had paid Central Excise duty as per the approved classification list then by reason of the order of the Appellate Collector, they would become entitled to claim refund of duty so paid without even making an application for the period from 22.6.78, the date on which they disputed the classification of their product.
The consequential relief, if any, ordered by the Appellate Collector would not only entitle the appellants to get their product classified under tariff item No. 26AA(ia) but also entitle them to claim refund of duty if paid from 22.6.78.
10. Admittedly, the present refund claims related to the period from 2.3.66 to 30.12.77. They relate to the period earlier to the date of their request for re-classification, namely, earlier to 22.6.1978.
Therefore, their claims for refund would not flow from the order dated 22.9.79 passed by the Appellate Collector of Central Excise. In the said circumstances, if the Asstt. Collector and on appeal, the Collector (Appeals) had rejected their claim as barred under Section 11B(I), it cannot be contended that the said authorities committed any legal error, agree with brother Dilipsinhji that this appeal requires to be rejected and accordingly the same is rejected.