ORDER
G. Sankaran, Sr. Vice-President
1. In terms of Notification No. 108/78-CE dated 28.4.1978, issued under Rule 8 (1) of the Central Excise Rules, 1944, M/s. Cawnpore Sugar Works Limited (the respondents herein) were sanctioned a sum of Rs. 8,26,164.75 towards rebate on excess production of sugar for the season 1977-78. They were allowed to take credit of this amount in their Personal Ledger Account. The order of the proper officer was passed on 22.9.1978 and the credit was actually taken on 23.9.1978. On 18.5.1979, the Superintendent of Central Excise issued a notice of miscellaneous demand in form DD2 to the respondents demanding a sum of Rs. 2,07,981.87. (A perusal of this notice shows that it is in the nature of peremptory demand rather than a show cause notice.) The Assistant Collector issued a notice on 14.1.1980 revising the amount to Rs. 2,11,612.35 and called upon the respondents to make any submissions against the demand. After holding adjudication proceedings, the Assistant Collector passed an order confirming the demand. In appeal the Collector (Appeals), by his order dated 4.2.1984 set aside the demand holding that it was barred by Limitation under Section 11A of the Central Excises and Salt Act, 1944 since the notice had been issued after the expiry of the stipulated period of 6 months and there was nothing in the notice to suggest collusion, suppression etc. on the part of the respondents which could have permitted the extension of the 6 month period to 5 years. It is this order which has been challenged by the Collector of Central Excise, Allahabad, in this appeal.
2. We have heard Smt. Vijaya Zutshi, SDR for the appellant-Collector and Shri B.B. Gujral, advocate, for the respondents.
3. Smt. Vijaya Zutshi placed reliance on a Bombay High Court judgment in a similar matter Someshwar Sahakari Sakhar Karkhana Ltd. and Ors. v. Union of India and Ors. . That matter pertained to a similar situation with reference to the same Notification No. 108/78. The Court held that the Department was right in its conclusion that under the said Notification, no exemption could be claimed exceeding the amount of duty otherwise payable. It further held that the grant of credit even before duty was paid on clearances of goods was a provisional and not a final assessment and therefore the demand claiming the difference between the credit allowed and the duty paid was not barred by limitation. The Court held that Central Excise Rule 10 (now Section 11 A) had no application to such a case.
4. Shri B.B. Gujral, Counsel, for the respondents on the other hand placed reliance on the Supreme Court judgment in Collector of Central Excise, Chandigarh v. Doaba Co-operative Sugar Mills . This also was in a similar situation with reference to the very same notification. The Tribunal had allowed the appeal of the Sugar Mills and the Department had challenged the Tribunal’s order. The order passed by the Tribunal was upheld by the Supreme Court. Paras 5 and 6 of the Supreme Court’s judgment bear reproduction in this context.
5. Aggrieved thereby, on or about 9th October, 1987, the respondent preferred an appeal before the Tribunal. The Tribunal allowed the appeal. The propriety of the said decision is being sought to be challenged in this appeal. It appears that Section 11A of the Act would come into operation only when the demand is on account of Central Excise duty short-levied or not levied or refunded erroneously. In the instant case the issue was not for any of the said reasons.
6. It appears that where the duty has been levied without the authority of law or without reference to any statutory authority or the specific-provisions of the Act and the Rules framed thereunder have no application, the decision will be guided by the general law and the date of limitation would be the starting point when the mistake or the error comes to light. But in making claims for refund before the departmental authority, an assessee is bound within four corners of the Statute and the period of limitation prescribed in the Central Excise Act and the Rules framed thereunder must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the department, the provisions of limitation prescribed in the Act will prevail. It may, however, be open to the department to initiate proceedings in the Civil Court for recovery of the amount due to the department in case when such a remedy is open on the ground that the money received by the assessee was not in the nature of refund. This was the view taken by the Tribunal in a previous decision in the case of Miles India Ltd. v. The Assistant Collector of Customs but it was assailed before this Court. The appeal was withdrawn. This Court observed that the Customs Authorities, acting under the Act, were justified in disallowing the claim for refund as they were bound by the period of limitation provided therefor in the relevant provisions of the Customs Act 1962. If really the payment of the duty was under a mistake of law, the party might seek recourse to such alternative remedy as it might be advised. See the observations of this Court in Miles India Ltd. v. The Assistant Collector of Customs 11987 (30) ELT 641 (SC) : 1985 ECR 289].
5. The Supreme Court’s judgment was delivered on 16.8.1988, whereas the Bombay High Court’s judgment was delivered on 19.11.1987. In view of the Supreme Court’s judgment, we hold that the notice of demand in the present instance, having been made after the stipulated period of 6 months from the date of the credit, and no allegations having been made to invoke1 the extended period of 5 years, was barred by limitation. In the result, we uphold the impugned order and dismiss this appeal.
6. In view of the Supreme Court’s judgment, we have not considered it necessary to refer to the other authorities cited by the Counsel for the respondents.