The brief facts of the case are that the assessees (hereinafter referred to as ‘TEL’), who are manufacturers of explosives and accessories thereof, have depots at various places like Kanpur, Bilaspur, Dehradun etc., and their products are sold to actual customers on stock transfer basis from their depots at the above places. During the year 1996-97, TEL cleared products discharging duty at the rate of 20% from the factory. In the budget 1997-98, the rate of duty for goods in question was reduced to 18% with effect from 01.03.1997. The major customers of TEL like M/s.Coal India Ltd. did not accept duty of 20% after the budget and insisted that only 18% should be charged with effect from 01.03.1997 and, therefore, TEL was not able to collect excise duty at 20% which is the rate at which duty was remitted by them at the factory gate at the time of clearance, differential duty of 2% not collected from the customers on clearances effected on consignment notes from the factory for the period 13.06.1997 to 27.02.1997 at 20%, and which were cleared subsequently to the coal sector from the depots through the debit invoices from Mar. - Oct.-07 was claimed as refund the refund claim was for Rs.2,27,502/-. The refund claim from 13.06.1996 to 20.02.1997 was found to be barred by limitation under the provisions of Section 11B of the Central Excise Act, 1944 as the claim was filed only on 19.08.1997. Hence it was proposed to reject the claim of Rs.2,04,769/- for the period upto 19.02.1997 and consider only the balance amount of Rs.22,733/- for the period from 20.02.1997 to 27.02.1997. The adjudicating authority held that as per Section 11B(5) Explanation (f), the relevant date for the purpose of computation of the period of limitation is the date of payment of duty, which in the present case is the date of clearance from the factory premises of M/s.TEL and since the period of payment of duty on clearance from factory was between 13.06.1996 to 20.02.1997, the claim for refund of duty paid during this period was time-barred. He, therefore, upheld the proposal in the notice for rejection of part of the claim and sanctioned a refund only of an amount of Rs.22,733/-. His order was upheld by the Commissioner (Appeals); hence this appeal.
2. We have heard both sides. Learned counsel for the appellants submits that the relevant date in the present case would be as defined in Section 11B(5)(d) as this is a case of reduction of duty by the Government and if this date is accepted to be the relevant date, then the claim is not barred, as the duty was reduced only from 20% to 18% only on 01.03.1997. We note that this plea was not raised either before the adjudicating authority or lower appellate authority. It is a plea based upon statutory provision and is, therefore, required to be considered by the authorities below. Further, it appears that the authorities below have not gone into the determination of the rate of duty applicable to the impugned goods and whether the appellants have paid duty at a rate higher than the applicable rate and if they are at all eligible for refund. As per Rule 9A of the Central Excise Rules, 1944, which was in force at the relevant time, the rate of duty applicable to any excisable goods is the rate on the date of the actual removal of such goods from the factory. In the present case, the impugned goods were removed from the factory between 13.06.1996 and 20.02.1997. The duty rate was reduced from 20% to 18% as a part of the budget proposal with effect from 01.03.1997. The authorities below have not at all considered as to whether such reduced rate can apply to pre-budget clearances effected earlier. No doubt, the depot to which the impugned goods have been cleared has been defined as a ‘place of removal’ for the purpose of valuation under Section 4 of the Act. Under the law, the price prevailing at the depot on the date of removal from the factory has a bearing on the assessable value. However, under the scheme of the law, the ‘depot’ being defined as a ‘place of removal’ for the purpose of valuation under Section 4 does not appear to have any relevance for determining the rate of duty applicable to the impugned goods for which, the date of removal from the factory alone appears to be relevant as per provisions of Rule 9A. The authorities below have possibly not dealt with this issue as the show-cause notice did not deal with the same. However, for determining the question of eligibility to refund which is the subject-matter of this case, determination of the applicable rate of duty is a relevant question and the same cannot be ignored. We, therefore, set aside the impugned order and remit the case for fresh decision to the adjudicating authority in accordance with law and after extending a reasonable opportunity to the assessees of being heard in their defence.
3. The appeal is thus allowed by way of remand.