ORDER
Shri G.A. Brahma Deva
1. This appeal arises out of and is directed against the order in appeal no. 3/94 dtd 21.1.94, passed by the Collector of Customs and Central Excise (Appeals), Bangalore.
2. The issue relates to refund claim. The refund claim has been rejected as barred by time. The party has filed an appeal before the Commissioner (Appeals) against the order passed by the Assistant Collector, Belgaum Division, in which the refund claim for Rs. 2,19,323/- preferred by the appellant being the duty paid on molasses stored in kutcha pits on the ground that the same was deteriorated due to mixing of rain water and it was declared as unfit for human consumption as well as animal feed by the Chief Chemist, Central Chemical Laboratory, Department of Excise. It has been rejected by the Asst. Collector as time barred and also the molasses was stored in kutcha pits on appellant’s risk and no refund duty would be entertained at a later stage in case of deterioration of molasses. Aggrieved by the said order the party has filed an appeal before Commissioner (Appeals). The Commissioner (Appeals) while upholding the order of the Asst. Collector observed that the Asst. Collector is bound by the limitation, being a creature of the Central Excise Statute and the appellant’s contention for applying a General Law of Limitation is misconceived. Sh. Ramesh Ananthan, appearing for the appellants submitted that the order passed by the Commissioner (Appeals) has been challenged by the party before the Karnataka High Court by way of a writ petition and the Hon’ble High Court as per order dated 21.11.99, observed as under:
“The order passed by the second respondent is appealable in CEGAT.
Four weeks time to file appeal is prayed.
Prayer is allowed.
If the appeal is filed within the aforesaid period, no objection regarding limitation would be raised.”
The counsel submitted that in pursuance of the direction of the High Court, the appeal was duly presented before the Tribunal on 17.2.99. On merits of the case he submitted that the appellant was permitted to store the molasses in kutcha pit on payment of duty as per the Trade Notice no. 204/88 dated 11.12.88. issued by the Collector of Central Excise, Belgaum. He said that there was no necessity for the department to issue such notice. the Trade notice is contrary to the provisions of Rule 9 and 49 of the Central Excise Rules. If the notice had not been issued, the only course open to the party was to store the molasses in kutcha pit and on deterioration they would have taken permission from the department to destroy the molasses and ask for remission of the duty. He is questioning the constitutional validity of issuing such a trade notice and illegal levy of collection of tax at the time of storage of molasses. He relied upon the decision of the Tribunal in the case of Shri Dudhganga – Vedganga Sahakari Sakhar Karkhana Ltd & Twelve Other Sakhar Karkhanas and others Vs. Collector of Central Excise, Pune reported in 1987 (29) ELT 22 (T) in support of his contention. He said that payment of duty was not required in respect of excisable goods made in a factory until they are about to be issued out of the place or premises specified under Rule 9 or are about to be removed from a store room or other place of storage approved by a Collector under Rule 47. He said that accordingly in the instant case the duty should have been collected at the time of removal of goods from kutcha pits. The Trade notice is contrary to the provisions of Rule 9 and 49 of the Central Excise Rules and is questioning constitutionality of issuing such Trade notice in the instant case. To a query from the Bench, he fairly submitted that Supreme Court in the case of Mafatlal Industries Ltd Vs. Union of India reported in 1997 (89) ELT 247 (SC) by majority in paras 20 and 69 thereof observed that where there was unconstitutional levy and in such case claim of such refund not governed by Section 11 / Section 11B of the Central Excise Act 1944 and right for such refund do arise under Article 265 of the Constitution but there is no automatic or unconditional right of refund – such refund claimable either by filing civil suit under Section 72 of the Contract Act or by filing writ petition under Article 32 or 226 of the Constitution of India. He said that since he has challenged constitutional proceedings before the High Court by way of writ petition and since the High Court directed to file an appeal before the Tribunal, he may be permitted to challenge the constitutional proceedings even before the Tribunal.
3. Smt Radha Arun, appearing for the revenue submitted that the authorities are bound by the period of limitation as stipulated in the statute, being a creature of the very statute. She submitted that the point at issue has been properly analysed by the authorities below as can be seen from para – 7 of the order passed by the Asst. Commissioner and para – 3 of the Commissioner (Appeals) respectively. The relevant paras are as under.
“7. The short point for consideration is party’s eligibility for refund of Rs. 2,19,323/-. The duties have been paid on 13.4.89 to 1.6.91 whereas the refund claim has been preferred on 21.10.92 in the office of the Asst. Collector of Central Excise, Belgaum Division, Belgaum and, therefore, the refund claim is filed beyond the statutory period of six months under section 11B. Therefore, I hold that the refund is time barred. The party has tried to argue that refund is eligible in view of the Hon’ble Tribunal’s Judgement of West Regional Bench, Bombay vide order no. 116-1132-86 WRB dated 24.6.86, Sugar Factories in Maharashtra Vs. C.C.E. I am not able to agree with the assessee because in the aforementioned case, the Hon’ble Tribunal has discussed the scope of Rule 49 and held that remission of duty on molasses is admissible to the parties where duty had not been paid. However, here the case is totally different. As the duty has been paid by the party for storing molasses in kutcha pits, the eligibility of the refund has to be examined with reference to Section 11B of Central Excise and Salt Act, 1944. The Assistant Collector is bound by limitation period given in the Central Excise statute and, therefore, the party’s refund claim is rejectable on the grounds of time bar and their contentions for applying the General Law of Limitation is misplaced.”
“3. The appellant admittedly filed the refund claim after the expiry of the statutory period of six months and hence the claim has been rightly rejected on the ground of time bar under Sec. 11B of the Act. The appellant having been permitted to store the molasses in kutcha pits on payment of duty, at their risk, and for loss of such goods they are not eligible for refund. The removal to katcha pit will have to be construed as removal under Rule 9 and 49 and it is not necessary that such removal should take place from the factory to outside as held in J & K Cotton Mills case, 1987 (32) ELT 234 (SC). If at all the refund claim was not preferred in time due to the Excise Chief Chemist’s report, it is not the fault of the Department of C.Ex. and in any case, Law cannot wait for the assessee’s convenience. Once an assessee has opted to store the molasses at their risk, they will have to face the risk involved in the process. The Hon’ble Tribunal’s decision cited by the appellant has discussed the scope of Rule 49 and the issue there was remission of duty on molasses and not refund of duty and the case law is, therefore, stands distinguished”.
She also submitted that the Trade notice is in conformity with the Rules 9, 47 and 49 of the Central Excise Rules and question of challenging the validity of issue of such notice do not arise.
4. I have carefully considered the submissions made by both sides and perused the records. As can be seen from the records, it is clear that the party has filed a refund claim after the expiry of a period of 6 months. The party has made payment of duty in respect of molasses on 13.4.89, and the refund claim was filed on 21.10.92., i.e. after a period of 3 years. It is clearly barred by time. It is settled position now that the authorities functioning under an Act are bound by such provisions as it was held by the Apex Court in the case of Collector of Central Excise, Chandigar Vs. Doaba Cooperative Sugar Mills reported in 1988 (37) ELT 478 (SC).
5. It was also held by the Supreme Court in the case of Miles India Ltd Vs. Assistant Collector of Customs reported in 1987 (30) ELT 641 that Tribunal as well as Customs authorities are bound by the statutory period of limitation. It was also observed therein that proceeding beyond the period can be initiated in the Civil court. This view was affirmed by the Apex Court in the case of Mafatlal Industries Ltd (Supra). In view of this, it is clear that the refund claim made beyond the period of 6 months, the party is required to file a civil suit or to file a writ petition before the appropriate forum. The Tribunal cannot go into the validity of the constitutional proceedings and question vires of the statute, being a creature of the statute. In any view of the matter I do not find any substance in the appeal filed by the party. Refund claim is clearly barred by time. I do not find any infirmity in the impugned order and accordingly I uphold the impugned order dismissing the appeal.
(Pronounced and dictated in the open court.)