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PETITIONER: COLLECTOR OF CENTRAL EXCISE, CHANDIGARH

       Vs.

RESPONDENT: DOABA CO-OPERATIVE SUGAR MILLS LTD.,JALANDHAR

DATE OF JUDGMENT16/08/1988

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 AIR 2052            1988 SCR  Supl. (2) 458  1988 SCC  Supl.  683     JT 1988 (4)    28  1988 SCALE  (2)477

ACT:     Central  Excises and Salt Act, 1944: Sections IIA,  IIB, 35A(2)  and  35L(b)- Excess production  rebate-  Erroneously granted-  Show  cause notice issued  for  recovery-  Whether valid  and  permissible- Refund of  duty  recovered  without authority  of  law- General law  applicable-  Refund  claims before  departmental authorities- Limitation provided  under Customs/Central Excise Act and Rules thereunder applicable. %     Limitation  Act, 1963: Limitation- Corporation of-  Duty levied  without  authority of law- General  law  applicable- Starting point- When mistake or error comes to light.

HEADNOTE:     The Superintendent of Central Excise issued a show cause notice  on November 15, 1981 to the respondent for  recovery of  ‘excess  production’ rebate  erroneously  granted  under Notification  No. 108/78. The Assistant Collector,  however, on  July 31, 1982 held that there was no  excess  Production because  of  wilful incorrect statement  or  suppression  of facts  and  so held that the notice was barred by  lapse  of time and dropped the demand.     The Collector of Central Excise exercising powers  under Section  35A(2)  of the Central Excises and Salt  Act,  1944 issued  a  review show cause notice on October 6,  1982  and adjudicated the case thereafter.     The Central Excise and Gold (Control) Appellate Tribunal having  allowed  the appeal of the respondent,  the  Revenue challenged the said order in this Court.     Dismissing the Appeal,     HELD:  1.  Section  IIA  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.  The issue in the instant case, was not any  of the said reasons. [460E]                                                   PG NO 458                                                  PG NO 459     2.  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

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by  the general Law and the date of Limitation would be  the starting  point  when the mistake or the error  would   come into light. [460F]     3.  In making claims for refund before the  departmental authority  as assessee is bound within the 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 authority 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. [460G1     4.  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 such a remedy is  open on  the ground that the money received by the  assessee  was 2not in the nature of refund. L460H]     Miles  lndia  Ltd. v. Assistant  Collector  of  Customs, [l985] ECR  289 referred to.

JUDGMENT:     CIVlL  APPELLATE JURISDlUTION: Civil Appeal No. 283  of 1988.     From  the Order dated 9. 10. 1987 of the Customs  Excise and Gold Control Appellate Tribunal, New Delhi in Appeal No. F-l744/83-D [Order No. 808/87-D ).     M.K.  Banerjee, Solicitor General? R.P.  Srivastava  and Mrs. Sushma Suri for the Appellant.     M.G. Ramachandran for the Respondent.     The Judgment of the Court was delivered by     SABYASACHI   MUKHARJI,  J. This is  a statutory   appeal against  the  decision  of  the  Customs,  Excise  and  Gold (Control)  Appel-late Tribunal, under Section 35L(b) of  the Central  Excises & Salt Act, 1944 [hereinafter  called  ’the Act’).     A sum of Rs.5,60,679.40 was sanctioned to the respondent on the basis of Notification No. 108/78 as an incentive  for excess  production. On 18.5.1979, the said sum was  credited to  the  Personal  Ledger  Account of  the  dealer.  On  5th November, 1981, the Superintendent of Central Excise  issued a  show cause notice asking the respondent to show-cause  as to why the sum of Rs.66,306.62, granted in excess under  the aforesaid notification, be not recovered from it.     On  31.7.1982, the Asstt. Collector, however, held  that there  was no excess production because of wilful  incorrect statement or suppression of facts by the respondent. In  the premises,  he  held that the notice was barred by  lapse  of time according to the statute and, accordingly, dropped  the demand.     On   6th  October,  1982,  the  Collector   of   Central Excise, Chandigarh, while exercising his power under Section 25A(2) of the Act as it stood at the material time, issued a review  show-cause  notice against the order of  the  Asstt. Collector.  The  case  was  adjudicated  thereafter  by  the Collector  who  found that the statutory  time  limit  under Section  111 of the Act would come into play only where  the demand is on account of the central excise duty short levied or not levied or refunded erroneously .     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 11 of the Act would come into operation only  when the demand is on account of central  excise  duty

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short  levied or not levied or refunded erroneously. In  the instant case the issue was not for any of the said reasons.     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                                                   PG NO 461 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 Asstt. 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, [1985] E.C.R. 289.     In  the  aforesaid view of the matter the  Tribunal  was right.  The  appeal,  therefore, has no  merits  and  it  is accordingly not entertained and dismissed. There is no order as to costs. N.V.K.                                  Appeal dismissed.