ORDER
G. Saiskaran, Senior Vice-President
1. Appeal No. 955/82-D was received in this Tribunal as a transferred proceeding under Section 35P of the Central Excises and Sail Act (hereinafter referred to as the Act) since the Revision Application filed before the Central Govt. in May 198? was pending on the date of inception of this Tribunal. The Order-in-Appeal No. 7-8/BD 2-3/82 dated 2-2-1982 which was the subject of challenge in the Revision Application had disposed of two appeals. Therefore, in accordance with the practice of this Tribunal, the appellants were called upon to file a supplementary appeal which they did in Nov. 1988 along with an application for condonation of the delay in filing the same. Since the requirement of the supplementary appeal arose in view of the practice of the Tribunal, Smt. V. Zutshi, the Departmental Representative, did not oppose the condonation of the delay. Since there was justification for the said delay, we condoned the delay and took up both the appeals together for hearing since they involved a common issue. Shri Daya Sagar, Conslt. represented the appellants and Smt. V. Zutshi, Departmental Representative, the respondent-Collector.
2. The facts of the case, briefly stated, are that the appellants had filed on 30-7-1975 two claims for refund of Rs. 80,340.34 and Rs. 3,381.48 which, according to them, had been paid in excess of the auxiliary duty of excise leviable on stems and dark brown tobacco. The payments were made during the period from 1-3-1974 to 29-7-1974. According to the appellants, the auxiliary duty was leviable at 20% ad valorem and not at 10% of the basic excise duty, that is to say, the rate of duty specified in the First Schedule to the Act read with any notification issued by the Central Govt. under Rule 8(1) of the Central Excise Rules, 1944 (these Rules are hereinafter referred to as “the Rules”). The Assistant Collector of Central Excise rejected the claims as barred by limitation under Rule 11 since the duty had neither been paid under protest nor under provisional assessment. These orders were upheld by the Collector (Appeals) by the impugned order.
3. The submission for the appellants is that in terms of Clause 22(1) of the Finance Bill, 1974 which reads as follows :
“In the case of goods mentioned in the First Schedule to the Central Excise Act, or in that Schedule as amended from time to time, there shall be levied and collected as auxiliary duty of excise an amount equal to twenty per cent of the value of the goods as determined in accordance with the provisions of Section 4 of the Central Excise Act”,
the maximum rate at which auxiliary duty was leviable on any excisable goods (including the goods in question) was 20% ad valorem. The Central Govt. by Notification 54/74-C.E., dated 1-3-1974 had exempted all excisable goods except goods falling under certain specified entries in the Tariff Schedule from the whole of the auxiliary duty of excise. One of the specified headings related to ‘Tobacco’. Thus, auxiliary duty was leviable on tobacco. However, by another Notification No. 55/74-C.E., dated 1-3-1974, the Central Govt. exempted excisable goods falling under Items 4 11(2) and 4 11(4) of the Tariff Schedule from the auxiliary duty of excise leviable thereon under Clause 22(1) of the Finance Bill, 1974, as was in excess of 10% of the basic excise duty. In short, the submission was that in so far as the subject goods were concerned, the auxiliary duty leviable at 20% ad valorem was lower than the duty paid and collected on the basis of the rate set out in Notification No. 55/74. Since an exemption notification under Rule 8(1) could not have an effect of levying duty at a rate higher than the maximum permissible in terms of the Finance Bill, the payment of duty by the appellants at the notification rate was in excess of the duty liable to be paid by them and that the excess should be refunded. As already noted, the two refund claims were filed on 30-7-1975 which was more than 12 months after the last date of payment of duty which was 29-7-1974 and, therefore, they were dismissed by the lower authorities under Rule 11 read with Rule 173J.
4. Before the Collector (Appeals), the appellants had taken up the plea that they had submitted price lists on 19-4-1974 to take effect from 1-3-1974 which had not been approved. In the Memo, of Revision Application (the transferred appeal), it is stated that the price lists still remained unapproved. It was urged that the assessments should, therefore, be deemed as provisional and that the payments having been made involuntarily, the limitation under Rule 11 was not applicable in the instant case since the excess amount of duty had not been paid through error.
5. Shri Daya Sagar, Learned Counsel for the appellants, drew our attention to the appellants’ letter dated 19-4-1974 to the Asst. Collector, Central Excise, Baroda. For a proper appreciation of the effect of this letter it should be read as a whole and is, therefore, reproduced below:
UII/1556 19-4-1974
Asst. Collector, Central Excise, Baroda Thru' The Superintendent,
Central Excises, Baroda.
Dear Sir,
Price list for unmanufactured tobacco under Tariff Item 41(1)
& 41(4) submission regarding.
We have few grades of VFC unmanufactured tobacco having the value less than Rs. 2.20 per kg. Referring to the last budget declared on 28th February 1974, we are entitled to clear these grades of tobacco for auxiliary duty at the ad valorem rate as proposed in the budget of 1974. Therefore we desire to clear these grades of tobacco for the manufacture of cigarettes at ad valorem rates for the payment of auxiliary Central Excise duties. Kindly approve the same at your earliest so as to enable us to clear these grades of tobacco as above.
The price list showing the particulars of values of the grades of tobacco as well as the breakup of Central Excise duties is enclosed herewith in quadruplicate for your early approval. Further we also attach herewith invoices of each grades of tobacco prepared on parties as under, showing therein the value of tobacco for your verification.
1. Adusumallisubbarao, L. 6 No. 27/69, Throvagunta.
2. Mittapalli Audinarayana & Co., Guntur-3.
Encl: as above Yours faithfully,
Sd/- Manager.
It appears that there was further correspondence between the appellants and the Department and, by letter dated 4-8-1975, the appellants stated that duty would be paid under protest and that all relevant gate passes would be marked under protest. It was submitted that the appellants had staked their claim for assessment of the tobacco in question at 20% ad valorem by the aforesaid letter of 19-4-1974 which, following the ratio of the Tribunal’s order in Neelamalai Tea Estates and Industries Ltd. v. CCE, Madras -1983 ELT 2426, should be held as not hit by limitation. Though the appellants had specifically claimed assessment at 20% ad valorem they had to pay duty at the higher rate since the proper officer had not approved the price lists. Duty payments at the higher rate were, therefore, not in consequence of completed assessments. The claims for refund would, therefore, on this ground also, not be hit limitation. It was further submitted that in view of the appellants, letter of 19-4-1974 staking a claim for assessment at 20% ad valorem, duty was not required to be paid under protest.
6. In response to a query from the Bench, Shri Daya Sagar clarified that the excess payment had not been made under protest nor was there any provisional assessment in terms of Rule 9B. Questioned by the Bench whether the ratio of the recent Supreme Court judgment in C.C.E., Chandigarh \.Doaba Cooperative Sugar Mills -1988 (37) ELT 478 (SC) to the effect that quasi-judicial authorities functioning under the Central Excise Act and Rules were bound by the provisions of the Act and the Rules and that claims for refund of duty made in terms of the said Act and Rules were governed by the limitation laid down therein, was not applicable to the present case, Shri Daya Sagar submitted that it was not.
7. In reply, Smt. Zutshi, for the Department, submitted that the Supreme Court judgment in the Doaba Cooperative Sugar Mills case (supra) would squarely apply to the facts of the present case. She also relied on the Tribunal’s decision “in Curd Chemicals Pvt. Ltd, v. C:C.E., Bombay -1984 (18) ELT 484, The letter dated 19-4-1974 did not, in her submission, amount to payment of duty under protest, though she fairly stated that the impugned order-in-appeal did; not deal with the appellants’ submission with reference to the said letter.
8. On being questioned by the Bench as to how the appellants’ letter dated 19-4-1974 could have any application in respect of the payments made prior to that date, Shri Daya Sagar fairly stated that it might not have any application.
9. We have carefully considered the submissions of both sides and perused the record.
10. The only issue for determination in these appeals is whether the two claims filed by the appellants on 30-7-1975 seeking refund of the excess payments of duty during the period from 1-3-1974 to 29-7-1974 were barred by limitation under Rule 11 read with Rule 173J. The rule as it existed at the material time read as follows:
“No refund of duties or charges erroneously paid, unless claimed within three months. –
No duties or charges which have been paid or have been adjusted in an account-current maintained with the Collector under Rule 9, and of which repayment wholly or in part is claimed in consequence of the same having been paid through inadvertence, error or mis-construction, shall be refunded unless the claimant makes an application for such refund under his signature and lodges it with the proper officer within three months from the date of such payment or adjustment, as the case may be.”
By Rule 173J, it was provided that for the expression “three month” in Rule 11, the expression “one year” was to be substituted. It may be seen that the Rule deals with claims for refund of duty having been paid through inadvertence, error or mis-construction. In the present case, the appellants had, by their letter dated 19-4-1974, very clearly urged before the Assistant Collector that, in terms of the provisions of the Budget presented on 28-2-1974, they were entitled to clear the subject tobacco on paymenf of auxiliary duty at ad valorem rates proposed in the Finance Bill and that they desired to clear the goods for the manufacture of cigarettes on payment of duty at ad valorem rates. They had requested the Department for approval and had enclosed price lists for the purpose. The appellants’ averment before the Collector (Appeals) as well as in the Revision Application (the transferred appeal) that the price lists remained unapproved has not been controverter by the Department/The appellants, therefore, cleared the goods on payment of the higher amount of duty in accordance with the rate specified in Notification No. 55/74. The letter dated 19-4-1974 can, in our view, be regarded as a clear staking by the appellants of their claim for assessment of the goods at ad valorem rates. This view finds support from this Tribunal’s decision in the Neetdmalai Tea Estates Industries Ltd. case (supra). In that case the assessee had applied for the concession contained in Notification No. 198/76 and submitted the required data On 23-5-1978. The period during which excess duty was paid was from 9-1-1979 to 31-3-1979. According to the instructions of the Department the assessee could not have cleared the goods at the confessional rate without the Asst. Collector having fixed the base period and base clearances which he did on 29-12-1979. The assessee thereafter filed on 12-2-1980 a claim for refund of the excess duty paid. The excess payments had not been made under protest. The Tribunal held that when the assessee had applied to the Asst. Collector with the declaration of base period and base clearance data, they had clearly staked their claim for the exemption under the notification. The claim dated 12-2-1980 which quantified the amount claimed was only a continuation of the initial claim and the Department’s contention that this claim was barred by limitation was not upheld. The Tribunal held that since the appellants had staked their claim well in time, it was not necessary for them to pay duty under protest. In the present instance, the appellants had staked their claim on 19-4-1974 and the formal claims filed on 30-7-1975 could only be regarded as in continuation of the initial claim. Therefore, even though the payments of duty during the material period were not made under protest nor under the provisional assessment procedure, they should be held to have not been barred by limitation. However, this consideration cannot apply to payments made prior to 19-4-1974.
11. The Supreme Court judgment in the case of Doaba Cooperative Sugar Mills (supra), in our view, does not apply to the instant case. This is for the reason that the appellants had, as noted already, staked a clear claim specifying in terms that they were entitled to clear the subject goods at the ad valorem rate as proposed in the Finance Bill well in time on 19-4-1974 which circumstance did not obtain in the case before the Supreme Court which was in respect of a demand for duty made by the Department long after the erroneous refund was sanctioned and paid.
12. The order of this Tribunal in the case of Curti Chemicals Private Ltd. (supra) does not apply to the facts of the present case. In that case, the duty payments were made during the period from 14-1-1977 to 31-3-1977 and the claim for refund was filed on 1-3-1978. The order of the Tribunal which was on an application filed by the appellants for reference to High Court noted that the law of limitation was a procedural law and as such came into effect right from the moment it had been enacted and governed all proceedings instituted thereafter. There has been no change in the law of limitation during the period material to the instant case. The relevance of this decision to the present case is not clear and, in our view, it is not relevant.
13. In the above view of the matter, we hold that the two refund claims filed by the appellants were not barred by limitation. However, the claim in respect of payments made prior to 19-4-1974 is not saved from limitation. In consequence, the orders of lower authorities are set aside to this extent and the matter goes back to the Assistant Collector who shall dispose of the claims on their merits. For this purpose, he shall take the appellants’ letter dated 19-4-1974 to the Assistant Collector, Baroda as the date of making the claim.
14. In the view we have taken above, we do not consider it necessary to refer to the other authorities cited before us by the learned Consultant for the appellants.