ORDER
D.C. Mandal, Member (T)
1. The facts of the case, in brief, are that the appellants manufacture nylon moulding powder (hereinafter referred to as NMP Chips) falling under Item No. 15A of the Central Excise Tariff out of caprolactum, a chemical derived from raw naphtha. Effective rate of central excise duty on NMP chips as per Notification No. 5/80-C.E., dated 27.2.1980 was 40% ad valorem. However, under Notification No. 7/80-C.E., dated 27.2.1980 a concessional rate of duty of 36% ad valorem was available to NMP chips manufactured out of raw naphtha or any chemical derived therefrom on which duty of excise at the appropriate rate had already been paid. On 14.7.1982, the appellants filed a refund claim claiming refund of differential duty on NMP chips cleared during the period from 3.11.1981 to 29.4.1982 on the ground that the NMP chips were manufactured out of caprolactum, which was a chemical derived from raw naphtha and was to be assessed at concessional rate of duty under Notification No. 7/80-C.E., dated 27.2.1980. The refund claim was rejected by the Assistant Collector of Central Excise on two grounds, viz. (i) the benefit of concessional rate of duty under Notification No. 7/80-C.E. was not available as the NMP chips were manufactured not only from indigenous caprolactum but also imported caprolactum, and (ii) the refund claim was time-barred under Section 11 -B of the Central Excises & Salt Act, 1944. The order of the Assistant Collector was upheld by the Collector of Central Excise (Appeals), Madras by the impugned order, which has been challenged by the appellants before us in this appeal.
2. While upholding the order of the Assistant Collector, the Collector (Appeals) has held that the expression “duty of excise” appearing in the Notification No. 7/80-C.E. would refer to duty leviable under the Central Excises & Salt Act and not to any duty leviable under the Customs Tariff Act, 1975; additional duty paid on the imported caprolactum was not excise duty under the Central Excises & Salt Act and hence the benefit of exemption Notification would not be admissible to NMP chips manufactured out of imported caprolactum. As regards the time-bar of refund application, he followed this Triburtal’s decision in the case of Indian Oil Corporation v. Collector of Central Excise, Bombay (1983 ELT1050) in which it was held that the computation of time-limit under Section 11 -B of the Central Excises & Salt Act would be with reference to the date of payment of duty and not on the basis of the date of finalisation of RT-12 Returns and accordingly the decision of the Assistant Collector of Central Excise was sustainable.
3. Shri K.K. Kapoor, appearing for the appellants, has stated during the hearing before us that the appellants used both indigenous and Imported caprolactum, which is a chemical derived from raw naphtha, in the manufacture of NMP chips. Additional (C.V.) duty was paid on the imported caprolactum. Countervailing duty is equivalent to central excise duty. Hence the benefit of Notification 7/80-C. E. was admissible to the NMP chips. In support of this contention, he has relied on the judgment of Supreme Court in the case of Union of India and Ors. v. Tata Iron & Steel Co. Ltd., Jamshedpur 1977 ELT (J-61) and this Tribunal’s Order No. 620-621/87-C dated 18.8.1987 in appeals No. E/1432/86-C and ED/SB/1903/83 [Collector of Central Excise, Pune v. Beck (India) Ltd.]. Regarding the question of limitation under Section 11-B of the Central Excises & Salt Act, Shri Kapoor has stated that the refund claim was filed on 14.7.1982 and the period covered by the claim was 3.11.1981 to 29.4.1982. RT-12 Returns for that period were finalised on and after 15.3.1982. The time-limit of 6 months under Section 11-B of the Central Excises & Salt Act should be computed from the date of finalisation of RT-12 Returns, as held by this Tribunal in the case of Rainbow Industries (P) Ltd., Vadodara v. Collector of Central Excise, Vadodara 1985 (22) ELT 795 (Tribunal), decided on 22.11.1984 and in Shri Digvijay Cement Co. Ltd. v. Collector of Central Excise, Baroda 1986 (25) ELT 994 (Tribunal), decided on 7.2.1986. According to the appellants, the refund claim is not hit by limitation as the same was filed within 6 months from the dates of finalisation of RT-12 Returns.
4. Shri L.C. Chakraborty, J.D.R. has argued for the respondent-Collector during the hearing before us. He has fairly conceded that on merit, this case is fully covered by this Tribunal’s Orders No. 620-621/87-C, dated 18.8.1987. Regarding limitation he has stated that under Rule 173-F of the Central Excise Rules, 1944 the assessee determines the duty payable. He is responsible for determining the duty correctly. If there is any excess payment of duty, he is required to file refund claim under Section 11-B within 6 months from the date of payment of duty. He has also stated that in the case of Mettur Chemical and Industrial Corporation Ltd. v. Collector of Central Excise, Coimbatore, reported in 1986 (26) ELT 756 (Tribunal) this Tribunal has held that the period of 6 months is computable from the date of payment of duty and not from the date of approval of RT-12 Return.
5. We have considered the arguments and the records of the case. In support of his argument on merit of the case, Shri Kapoor has relied on the Supreme Court decision reported in 1977 ELT (J61) and also on this Tribunal’s Order No. 620-621/87-C. The Hon’ble Supreme Court in that case held that where the duty-paid pig iron was mixed with non-duty paid pig iron, the set-off could not be refused on the ground that non-duty-paid material had also been used. Shri Chakraborty has rightly said that on merit, the present case is covered by this Tribunal’s decision in Order No. 620-621/87-C dated 18.8.1987. In the cases covered by that order, polyester resin was manufactured from a mixture of chemicals derived from imported and indigenous naphtha. Following two decisions of the Hon’ble Supreme Court in (i) Union of India v. Tata Iron and Steel Co. Ltd., Jamshedpur (1977 ELT J61) and (ii) Aluminium Corporation of India Ltd. v. Union of India and Ors. (1978 ELT J452) and also the Department’s Trade Notice, the Tribunal has held in its Order No. 620-621/87-C dated 18.8.1987 that the benefit of exemption should be given on pro rata basis on the assessee producing proof and satisfying the Assistant Collector about the raw naphtha or chemical being of indigenous origin and its duty-paid character. In the present case, nylon moulding powder (NMP chips) was manufactured out of imported naphtha as we!’ as indigenous naphtha. Situation being similar, we have no reason to hold a view different from that taken by this Tribunal in Order No. 620-621/87-C, dated 18.8.1987. Following the said decision, we hold that in the present case the benefit of Notification No. 7/80-C.E., dated 27.2.1980 should be granted to the nylon moulding powder manufactured by the appellants, on pro rata basis, subject to the appellants producing necessary proof to the satisfaction of the Assistant Collector of Central Excise that the proportionate quantity of nylon moulding powder is attributable to the indigenous raw naphtha on which appropriate duty of central excise had been paid.
6. Section 11 -B of the Central Excises & Salt Act, 1944 provides that any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of 6 months from the relevant date. The expression “Relevant date” has been explained in Explanation (B) to this Section. Clauses (e) and (f) of Explanation (B) reads as follows :-
“(e) In a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof, (f) In any other case, the date of payment of duty.”
As regards the time limit for refund claim, the contention of the appellants Is that under the S.R.P., the assessment remains provisional till the RT-12 Return Is finalised by the Central Excise Officer and the time limit under Section 11-B should count from the date of flnallsatlon of the RT-12 Return. In support of this contention, Shri Kapoor has relied on two decisions of this Tribunal, viz., those reported In 1985 (22) ELT 795 (Tribunal) and 1986 (25) ELT 994 (Tribunal). The case reported In 1985 (22) ELT 795 (Tribunal) was decided by the 3-Member Special Bench of the Tribunal on 22.11.1984. In paragraph 18 of that decision the Tribunal stated that ‘The decisions In the Bawa Potteries case as well as In the Trivenl Steel Glass Works case make It clear that the time-limit under Rule 10 would run from the date of assessment by the Central Excise authorities on the RT-12 Return.” The decisions of Delhi High Court In Bawa Potteries case and Triveni Steel Glass Works case are reported in 1981 ELT 114 (Delhi) and 1983 ELT 711 (Delhi). The case of Shri Digvijay Cement Co. Ltd. v. Collector of Central Excise, Baroda (Supra) was decided on 7.2.1986 by Single Member sitting in West Regional Bench. It was held therein that for the purpose of Section 11-B the relevant date for claiming refund is not the actual date of first debit of duty in the account current but the date when the assessment is finalised under Rule 173-1 and the duty assessed adjusted finally. For an assesses working under Chapter VII-A of the Central Excise Rules, 1944, the “relevant date” for purposes of Explanation ‘B* of Section 11 -B, is the date of assessment of RT-12 Return by the Superintendent of Central Excise under Sub-rule (1) of Rule 173-I, If the amount of duty deposited earlier is to be found to be correct on assessment or the date of final adjustment under Sub-rule (2), if there Is excess or short deposit made earlier. It Is only in this context that the provisions of Rule 173-I which statutorily enjoin suo moto recovery or refund of duty can have proper meaning. The requirements of Rule 173-1(2) in this behalf are Identical to those of Rule 9B(5) which give further support to the aforesaid conclusion. In this behalf there Is no time-limit for finalising the assessments under Rule 173-1 and RT-12 Returns remain unassessed with the Department for more than six months in large number of cases. If there is no provisional assessment under Chapter VII-A, the demands for recovery of extra duty and claims for refund of excess duty would get barred by limitation under Section 11-A and 11-B and the provisions of Rule 173-I of suo moto adjustment would become meaningless and non-operative in such cases.
7. Shri Chakraborty for the respondent has relied upon the decision of the South Regional Bench of this Tribunal in the case of Mettur Chemicals and Industrial Corporation (Supra) which has held that the provisional assessment under Rule 9B of the Central Excise Rules does not encompass payment under S.R.P.; decisions under Rules 173-B and 173-C on the classification list and price list are final; such decisions are to be challenged by way of payment of duty under protest and by resorting to appeal procedure or tiling refund claim under Section 11B of the Central Excises & Salt Act; refund claim is barred by limitation if filed after six months from the payment of duty and that the period of six months is computable from the date of payment of duty and not from the date of completion of RT-12 Return. In support of the conclusion the Tribunal’s observations were as follows, vide paragraphs 14,15 and 16 of the order :-
“14. The recent history of Rules 173B and 173C also Indicates that the Intention of the Rule making authority is not to treat an approved classification list or a price list as provisional. Prior to 7.2.1981 both the Rules provided for two courses of action as open to an assessee who disagrees with a decision of the proper officer in respect of the rate of duty or valuation; payment of duty under protest or by having the goods assessed provisionally in terms of Rule 9B. The latter choice was omitted from the date thus indicating a deliberate action on the part of the Rule making authority that the decisions under Rules 1738 and 173C are final and If the assessee so wished, he will have to resort to the procedures of payment of duty under protest of filling a refund claim for going in appeal against the decisions given under the Rules, if so desired.
15. I n the above view of the matter we consider that collection of duty under the Self Assessment Procedure under Chapter VII-A is not by way of provisional assessment nor is the payment made provisional.
16. If one were to look at the provisions of Rule 1730(8), the above view would get further strengthened. Where an assessee disputes the price list approved by a proper officer, he is required to pay duty under protest on the basis of the price list approved by the officer. In a similar way, Rule 173B provides that where the assessee disputes the rate of duty approved by a proper officer, he may pay duty under protest. If payment of duty by an assessee in terms of approved price list and classification list Is provisional, there will be no need to provide that the assessee should resort to the procedure of payment of duty under protest and follow up the matter as prescribed In Rule 233B.”
8. In Mettur Chemicals case, the learned advocate for the appellants referred to certain Judgments of Madras, Calcutta and Delhi High Courts and of Supreme Court. Those have been cited In paragraph 3 of the Tribunal’s Order. The paragraph Is reproduced below :-
“3. The Advocate referred to the case of ‘Collector of Central Excise, Bangalore v. Karnataka Scooters Ltd.’ (1983 ECR 745D-Cegat, Madras: paras 5,7 and 8). In that case this Bench of the Tribunal has referred to the decision of the Madras High Court in the case of ‘Binny Ltd. Madras v. Superintendent of Central Excise, Guindy XIV’ wherein it has been held by His Lordship of the Madras High Court that
“any payment or collection of tax made on the basis of returns submitted under the self-removing procedure cannot be construed as a complete assessment and, as long as a completed assessment has not taken place there is no necessity for the department to resort to its powers under Rule 10 for recovery of short-levied duty surcharges.”
Per contra the duty paid would impliedly be a provisional payment. Next he referred to the case of ‘Sawa Batteries v. Union of India’ -1981 ELT 114 (para 12) – wherein Their Lordships of the Delhi High Court observed,
“It is quite clear that there could have been no non-levy or short-levy except by a process of assessment; likewise a refund could have been directed only after making a like determination of a quasi-judicial nature.”
Next he referred to the decision of the Calcutta High Court in the case of ‘K.L. Thirani & Co. Ltd. v. Collector of Central Excise and Ors.’ (1978 ELT 568 -para 9). In dealing with a claim for refund, Their Lordships have observed,
“Thus the application for refund of excess duty can only be made after the final order of assessment is made. The payment or the adjustment that was earlier made was done not under any final order of assessment….”
Next he referred to the case of ‘Assistant Collector of Central Excise, Calcutta v. National Tobacco Co. of India Ltd.’ -1978 ELT 416 (paras 21 & 22). In para 22 of the Judgment the Supreme Court has observed,
“But we could not equate such an adjustment with an assessment, a quasi-judicial process which involves due application of mind to the facts as well as to the requirements of law, unless we were bound by law give such an unusual interpretation to the term “assessment”. Here we do not find any such definition of assessment or any compelling reason to hold that what could at most be a mechanical provisional collection, which would become a “levy1 in the eye of law only after an “assessment”, was Itself a levy or an assessment.”
He referred to the framing of Section 11B as compared with the wording of Rule 11 which deal with claims for refund prior to 17.11.1980. In the explanation to Rule 11 it was provided
“Where any duty is paid provisionally under these rules on the basis of the value or the rate of duty,”
the period of limitation will run from the date of final adjustment of the value or the rate of duty. However, Section 11B refers to cases where duty Is paid provisionally under the Act or the Rules made thereunder; the difference in wording is purposive and indicates that there could be provisionally of payment for reasons other than determination of rate of duty or value of the goods:”
those judgments of the High Courts and the Supreme Court were not followed by the South Regional Bench of this Tribunal by distinguishing the facts of those cases from the facts of the case before the Tribunal. The Tribunal’s views about those judicial decisions are found in paragraphs 17 to 20 of the Tribunal’s decision, which are given below :-
“17. Reference was made to the case of the decision of the Tribunal in the Karnataka Scooters case which in turn extracted the observations of His Lordship of the Madras High Court In the case of Binny Ltd., Madras v. Superintendent of Central Excise, Group XIV, Gulndy and Anr., reported In 1979 Cencus (Madras) 107D. In that case His Lordship was pleased to observe :
“Any payment or collection of tax made on the basis of return submitted under the self-removing procedure cannot be construed as a completed assessment and, as long as a completed assessment has not taken place, there is no necessity for the Department to resort to its powers under Rule 10 for recovery of short-levied duty surcharge.”
For one thing, in that case the issue had not been posed before His Lordship as to the nature and scope of a payment under the Self Assessment Procedure. The question before His Lordship was whether a demand for duty is necessary under Rule 12 or whether the provisions of Rule 173-1 would be sufficient for raising a demand. For another, that decision was rendered before that In the case of Bawa Potteries where Their Lordships of the Delhi High Court have held that a limited power of review can co-exist with procedure for appeal and review in terms of the Act and Rules.
18. The quotation from the Bawa Potteries case itself made on behalf of the appellant only states that a process of assessment is necessary before a short levy or a refund can arise. The procedures for fixing unit value for assessment or the rate per unit or value of excisable goods are determined by proper officers after observing a quasi-judicial procedure are as set out earlier, part of the process of assessment itself.
19 The observations of the Calcutta High Court in the case of Krishna Lal Thirani & Company Ltd. and Anr. v. Collector of Central Excise and Ors., reported in 1978 ELT (568), are also distinguishable on the above lines.
20. The observations of the Supreme Court in the case of Assistant Collector of Central Excise, Calcutta y. National Tobacco Co. of India Ltd. “1978 ELT 416, referred to by the Advocate for the appellant deals with an entirely different situation. That was a case where a debit was made to the PLA without any assessment and the question was whether such a debit which was a mechanical process would constitute a levy, As we have observed in the preceding paragraphs the debit made to the PLA in the present case is the result of a deliberate act on the part of the assessee after conforming to the provisions of Chapter Vll-A In the course of which formal and quasi-judicial determinations have been made by proper officers, both in respect of the rate of duty applicable and the unit value of the excisable goods.”
9. In passing the impugned order, the Collector of Central Excise (Appeals) relied upon a decision dated 6.5.1983 of Two-Member Bench in the case of Indian Oil Corporation v. Collector of Central Excise, reported in 1983 ELT -1050 (CEGAT). In that case, the Tribunal held that time-limit under Rule 11 of the Central Excise Rules had to be computed from the date of the payment or making the debit In the PLA and not the date of assessment of RT-12 Return.
10. There is another decision of this Tribunal In the case of Siemens (India) Ltd., Thane and Ors. v. Collector of Central Excise, Thane and Ors., decided on 9.9.1985 and reported in 1986 (25) ELT – 821 (Tribunal). The majority opinion of the 3-Member Bench in the said case was that under Self Removal Procedure the date of payment of duty by debit entry in the personal ledger account of the assessee was the reference date for computation of the period of limitation prescribed under Rule 11 read with Rule 173-J of the Central Excise Rules and not the date of the assessment of the RT-12 Return by the Central Excise Officer. It was also held that date of adjustment of the P.L.A. (if any such adjustment takes place), consequent on the receipt of a copy of the RT-12 Return with the assessment memorandum completed by the proper officer could be another reference date for computation of limitation, but strictly limited to the additional sum of duty, if any, paid as a result of the direction in the assessment memorandum. The above decision was arrived at by the Tribunal after taking into consideration the various judicial decisions and the provisions of the relevant rules.
11. We have already stated earlier in this order that in the decision of the South Regional Bench in the case of Mettur Chemical and Industrial Corporation Ltd., 1986 (26) ELT 756 (Tribunal), the Tribunal discussed the various judicial decisions relied upon by the assessee, but those were distinguished by the Tribunal on the ground that the facts were different, and those decisions were taken by the High Courts and the Supreme Court in the different facts and circumstances of those cases. We respectfully follow the earlier decisions of this Tribunal reported in 1986 (26) ELT 756, and 1986 (25) ELT 821 (Tribunal) and hold that limitation under Section 11 -B of the Central Excises and Salt Act, 1944 should be reckoned from the date of the payment of duty by debit in the P.L.A. maintained by the assessee and not from the date of assessment of the RT-12 Return by the proper Central Excise Officer. In our view, the assessment is complete as soon as the classification list under Rule 173-B and price list under Rule 173-C are approved by the proper central excise officer. Based on the classification and the unit value of the goods approved by the proper central excise officer, in the classification list and the price list, the assessee determines the duty liability on the goods under Rule 173-F of the Central Excise Rules and then pays the duty by debit to the account current maintained by him under Rule 173-G before the goods are cleared from the factory. The assessment and the payment of duty are, thus, complete before the goods are cleared. The assessment by the Proper Officer of Central Excise on the RT-12 Return filed by the assessee under Rule 173-1 Is nothing but arithmetical check of the quantification of the duty by the assessee on the basis of already approved classification list and price-list. We do not subscribe to the view that the assessment under S.R.P. prior to the approval of RT-12 Return by the Proper Officer is provisional. In this view of the matter, the provision of Explanation (B)(e) below Section 11 -B of the Act is not applicable to this case, but the provision of clause (f) of Explanation (B) is applicable.
12. The.refund claim was submitted by the appellants In this case on 14.7.1982 in respect of differential duty relating to the period from 3.11.1981 to 29.4.1982. As a result, the claim relating to the period beyond the period of six months prior to the date of filing the refund application is barred by limitation.
13. The appeal is allowed in the light of our findings in paragraph 5, but the claim forrefund is restricted to six months as indicated in paragraph 12 of this order.