Order
1. The appellants manufacture liquid pure carbon dioxide for use in soft drinks, fire extinguishers and other industrial uses. The appellants filed a classification list on 23-3-1978 claiming exemption from the payment of excise duty in respect of carbon dioxide manufactured and cleared by them on the basis of Notification No. 71 of 1978 dated 1-3-1978 under which full exemption was granted up to an aggregate value not exceeding rupees five lakhs, in respect of certain goods specified in the said Notification which were cleared on or after 1st April of any financial year. Carbon dioxide is one of the commodities mentioned in the Notification.
2. The classification list filed by the appellants was kept pending and was not approved by the Assistant Collector of Customs since there was a dispute as to whether the appellants were to be considered as the manufacturers of the goods or whether Coromandal Fertilizers Ltd. were the manufacturers. Ultimately an order was passed in favour of the appellants by the Government of India being Revision Order No. 939 of 1979 dated 30-10-1979. In the meanwhile, on 5-7-1979 the Superintendent of Central Excise informed the appellants that they were eligible for exemption under the said Notification. The appellants who had, in the meanwhile, cleared their goods on payment of duty, filed a refund claim on 4-1-1980 in respect of the duty paid by them from 1-4-1978 to 25-7-1978. After the filing of the refund claim, the classification list of 23-3-1978 was finally approved with effect from 1-4-1978 on 24-4-1980.
3. The claim of the appellants for refund was rejected as time-barred by the Assistant Collector in view of Rule 11 of the Central Excise Rules, 1944. On an appeal, the Collector (Appeals) by his order dated 4-8-1981 upheld the order of the Assistant Collector. On further appeal to the Central Excise and Gold Control Appellate Tribunal (CEGAT), the CEGAT rejected the appeal of the appellants by its order dated 24-4-1987 upholding the contention of the Department that the refund claim having been filed beyond the period of six months from the date of payment of duty, it was barred by limitation under Rule 11 of the Central Excise Rules, 1944.
4. The appellants filed a writ petition being No. 2155 of 1988 before the Andhra Pradesh High Court challenging the above order of CEGAT. In the said petition, the appellant had also challenged the vires of Section 11-B of the Central Excises and Salt Act which was introduced by the Amending Act 40 of 1991. The High Court by its order dated 29-4-1993 dismissed the said writ petition along with a group of other writ petitions. The present appeal arises from the above judgment of the High Court.
5. The question of vires of Section 11-B is now settled by a decision of this Court in Mafatlal Industries Ltd. v. Union of India (1997) 5 SCC 536, (1997) 89 ELT 247. The appellants, however, contend that their claim for refund was not time-barred inasmuch as on the date when they filed the claim for refund their classification list had not been approved. All payments made pending the approval of the classification list can only be provisional payments. Hence their claim for refund which was made even prior to the approval of the classification list cannot be considered as time-barred under Rule 11. The period provided by Rule 11 would run only from the date of approval of the classification list. The appellants have relied upon a decision of this Court in Samrat International (P) Ltd. v. CCE 1992 Supp (1) SCC 293 where this Court said that limitation under Rule 11 commences only from the date of final assessment. On the facts of that case, however, this Court had held that the payment of duty which was made by the appellants in that case was provisional and the procedure under Rule 9-B had been followed. We have not been shown any material on record to indicate whether the appellants in the present case had cleared carbon dioxide manufactured by them by following the procedure laid down in Rule 9-B or that the payment of excise duty which the appellants had made during the relevant period was provisional. This is a matter which the appellants will have to establish before the departmental authorities when the matter goes back to the departmental authorities for considering the claim of the appellants for refund under the ratio of Mafatlal Industries case (1997) 5 SCC 536, (1997) 89 ELT 247. If the appellants succeed in establishing that the payment of duty which was made by them for the period in question was a provisional payment, they shall be entitled to the benefit of the ratio of the judgment of this Court in Samrat International case 1992 Supp (1) SCC 293.
6. The appellants, however, contend that the provisions of Section 11-B will not be attracted in their case. They rely upon the observations made by this Court in the case of Mafatlal Industries (1997) 5 SCC 536, (1997) 89 ELT 247 in paragraph 104 which reads as under:
“104. Rule 9-B provides for provisional assessment in situations specified in clauses (a), (b) and (c) of sub-rule (1). The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that ‘when the duty leviable on the goods is assessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be’. Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9-B will not be governed by Section 11-A or Section 11-B, as the case may be. However, if the final orders passed under sub-rule (5) are appealed against — or questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed — then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11-B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9-B(5) reagitating the issues already decided under Rule 9-B — assuming that such a refund claim lies — and is allowed, it would obviously be governed by Section 11-B. It follows logically that position would be the same in the converse situation.”
7. This Court has thus held that any adjustment which is made under sub-rule (5) of Rule 9-B dealing with provisional assessments is not governed by Section 11-A or Section 11-B. The Court has, however, observed that if ultimately the final order passed under sub-rule (5) is questioned in a writ petition or a suit and ultimately the assessee succeeds, the refund claim which arises as a consequence of such decision would be covered by Section 11-B. The present case is not a case of any adjustments in the payment of excise duty made under sub-rule (5) of Rule 9-B. The refund claim does not appear to be a claim arising under Rule 9-B(5). It is an independent claim for refund on the basis of Notification No. 71 of 1978 dated 1-3-1978. The appellants challenged the rejection of their claim for refund right up to the CEGAT and filed a writ petition before the Andhra Pradesh High Court also. Therefore, the provisions of Section 11-B are attracted and the appellants are governed by the ratio of Mafatlal Industries case (1997) 5 SCC 536, (1997) 89 ELT 247 and the consequent format order framed by this Court. It is ordered accordingly.
8. The appeal is disposed of accordingly. No order as to costs.