1992(01)LCX0025

BEFORE THE CEGAT, SPECIAL BENCH ‘C’, NEW DELHI

Shri D.C. Mandal, Member (T) and Ms. Jyoti Balasundaram, Member (J)

On Reference: Shri G.P. Agarwal, Member (J)

RAJ LAMINATES (P) LTD.

Versus

COLLECTOR OF CENTRAL EXCISE

Misc. Order No. 29/91-C and Final Order No. 5192-C, dated 2-1-1992 in E/Appeal No. 1997/90-C

Cases Quoted

AMIT POLYMERS & COMPOSITES LTD. v. COLLECTOR
- 1988(11)LCX0053 Eq 1989 (039) ELT 0674 (TRI.BUNAL)                                                                         [PARA 3]

MEGHDOOT LAMINART (P) LTD. v. COLLECTOR - 1989(09)LCX0007 Eq 1990 (049) ELT 0075 (TRIBUNAL) [PARA 3]

UTTTAM LAMINATES v. COLLECTOR - 1990(09)LCX0063 Eq 1991 (052) ELT 0276 (TRIBUNAL)               [PARA 3]

PREMIER TYRES v. COLLECTOR - 1983(12)LCX0019 Eq 1984 (016) ELT 0419 (TRIBUNAL)                   [PARAS 5, 12]

COLLECTOR v. MELAMINE FIBRE BOARD LTD. - 1988 (36) 139 (TRIBUNAL) [PARAS 12, 13]

COLLECTOR v. GURMUKH SINGH & SONS - 1985(05)LCX0003 Eq 1986 (025) ELT 0094 (TRIBUNAL)       [PARA 16]

Advocated By : Shri K. K. Banerjee, Advocate, for the Appellants.

Shri L. Narasimha Murthy, J.D.R., for the Respondent.

[Order per : Jyoti Balasundaram, Member (J)]. - The issues arising for determination in this appeal are the classification under the 1st Schedule to the C.E.T.A., 1985 of paper based laminated sheets and the eligibility of the appellants to refund of excess duty paid on the goods during the periods from 17-2-1987 to 22-2-1988 and 11-3-1988 to 1-6-1988. The lower authorities have classified the goods under sub-heading No. 3920.37 as rigid laminated plastic sheets negativing the appellants’ claim for classification under sub-heading No. 4823.90. The refund claims have been rejected as time-barred in terms of Section 11B of the C.E.S.A., 1944.

2. We have heard Shri K.K. Banerjee, learned advocate & Shri L.N. Murthy, learned D.R.

3. The classification issue stands settled by this Tribunal’s decision in the case of M/s. Amit Polymers & Composites Ltd. v. C.C.E. Hyderabad - 1988(11)LCX0053 Eq 1989 (039) ELT 0674 (Tri.) = 1989 (020) ECR 454 which was followed in Order Nos. 552 to 572/89-C, dated 29-9-1989 reported in 1989(09)LCX0007 Eq 1990 (049) ELT 0075 (Tri.) in the case of M/s. Meghdoot Laminart (P) Ltd. v. C.C.E. and other orders, the latest in the line being Order No. 1001/90-C, dated 4-9-1990 in M/s. Uttam Laminates v. C.C.E. [1990(09)LCX0063 Eq 1991 (052) ELT 0276 (Tri.)]. We, therefore, uphold classification of the products under Chapter 48.

4. As the refund of excess duty paid on the goods becomes due consequent on re-classification of the goods by the Tribunal, the appellants are entitled to the refund in terms of clause (3) of Section 11B which reads as follows :

“Section 11B. -

(3) Where as a result of any order passed in appeal or revision under this Act refund of any duty becomes due to any person, the Asstt. Collector of Central Excise may refund the amount to such person without his hearing to make any claim in that behalf."

5. This provision is inpari materia with Section 27(3) of the Customs Act, 1962 which has been considered by the Tribunal in the case of Premier Tyres Kalamassery v. Collector of Customs [1984 (016) ELT 419]. The question of time bar is therefore immaterial to this case.

6. In view of the above, we hold that the appellants are entitled to refund of the entire excess duty paid on the goods during the period 17-2-1987 to 22-2-1988 and 11-3-1988 to 1-6-1988.

7. The impugned order is set aside and the appeal allowed with consequential relief.

Dated : 19-12-1990

8. [Per : D.C. Mandal, Member (T)]. - I have perused the case records, considered the arguments advanced during the hearing before us and have gone through the order written by Ms. Balasundaram, Member (Judicial). Following the earlier decisions of the Tribunal referred to in paragraph 3 of her order, I agree with her findings on the classification of the product, but the revised classification should be effective from 2-6-1988. However, I am unable to agree with her on the point of admissibility of the refund claims. The reasons are discussed below :-

9. The present case started with the receipt of 2 refund claims for Rs. 9,10,805.32 for the period from 17-2-1987 to 22-2-1988 and for Rs.1,56,259.51 for the period from 11-3-1988 to 1-6-1988. Both the refund claims were received in the office of the Assistant Collector of Central Excise on 16-9-1988. The ground of the refund claims was that the paper-based laminated sheets were correctly classifiable under Chapter 48 of the C.E.T.A., 1985 and not under Chapter 39 under which the classification lists for the periods were filed and approved. The facts of the case have been discussed in details by the Deputy Collector of Central Excise in his Order-in Original No. 39/88/44/94/89, dated 23-8-1989. It is stated therein that the appellants filed classification list No. 1/RLP/Ch. 39/87, dated 1-1-1989 effective from 27-1-1987, classifying industrial and decorated laminated sheets under Heading 3920.31. The classification list was approved by the proper officer on 31-3-1987. Another classification list bearing No. 2/RLP/Ch. 39/87-88 dated 1-3-1988 for the period commencing from 1-3-1988 was filed by them classifying the products under Heading 3920.37. The same was approved by the proper officer on 13-3-1988. They paid duty as per approved classification list. On 2-6-1988, they sent a letter No. l/RLP/Cal/CE/88/1173, dated 2-6-1988 stating that their laminated sheets were classifiable under Chapter 48 instead of Chapter 39 and communicated their desire to submit refund claim for duty paid in excess for the entire period from February, 1987 and that they would henceforth pay duty under protest. They then submitted revised classification list bearing No. 3/RLP/Ch. 39/88-89, dated 2-6-1988 with effect from 2-6-1988 claiming classification under Heading 4823.90. The revised classification list was returned to them on 7-10-1988 stating that their earlier classification lists approved under Chapter 39, could not be changed. Thereafter, show cause notice was issued to the appellants proposing to reject the refund claims for the reasons stated in the notice. The Deputy Collector who adjudicated the case, held that the goods were correctly classifiable under Heading 3920.39 and he rejected the refund claims as time-barred for the periods from 17-2-1987 to 22-2-1988 and from 11-3-1988 to 1-6-1988.

10. The facts of the case show that they themselves classified the goods under Chapter 39 and the classification lists were approved. Till 1-6-1988 they did not dispute the approved classification. It was only on 2-6-1988 that they disputed the classification and filed revised classification list claiming classification under Chapter 48. They stated on 2-6-1988 that they would pay duty under protest and would claim refund. They filed refund claims on 16-9-1988. In the circumstances, the revised classification of their laminated sheets should take effect from 2-6-1988. However, as they filed refund claims on 16-9-1988, the refund will be permissible for the period from 16-3-1988 under Section 11-B of the Central Excises and Salt Act, 1944. The refund claims for the periods prior to 16-3-1988 are barred by limitation. I order accordingly.

Dated : 3-1-1991

The following point of difference arises out of the orders written by Ms. Jyoti Balasundaram, Member (Judicial) and by Shri D.C. Mandal, Member (Technical):

Whether in the facts and circumstances of the case, the refunds for the entire periods from 17-2-1987 to 22-2-1988 and from 11-3-1988 to 1-6-1988 are admissible as held by Member (Judicial) or the refund is admissible for the period from 16-3-1988 to 1-6-1988 under Rule 11B of the Central Excises and Salt Act, 1944, and the claims for the periods prior to 16-3-1988 are barred by limitation, as held by the Member (Technical).

The point of difference is placed before President, Customs Excise and Gold (Control) Appellate Tribunal under Section 35D of the Central Excises and Salt Act, 1944 read with Section 129C(5) of the Customs Act, 1962.

[Order per : G. Sankaran, President]. - The above mentioned point of difference is referred to Shri G.P. Agarwal, Member (Judicial), in terms of sub-section (1) of Section 35D of the Central Excises and Salt Act, 1944, read with sub-section (5) of Section 129C of the Customs Act, 1962.

11. [Per : G.P. Agarwal, Member, (J)]. - Heard Shri K.K. Banerjee, learned counsel for the appellants and Shri L. Narasimha Murthy, learned J.D.R. for the respondents.

12. Arguing on behalf of the appellants, Shri K.K. Banerjee, learned counsel, while supporting the proposed Order recorded by the learned Judicial Member Ms. Jyoti Balasundaram, wherein she has held that as the refund of excess duty paid on the subject goods becomes due consequent on re-classification of the goods by the Tribunal,. the appellants are entitled to the refund in terms of Clause (3) of Section 11B, the question of time-bar is, therefore, immaterial to the present case, added in the alternative that the claim for refund be treated within time from 2-1-1987 and not from 16-3-1988 as held by the learned Technical Member, Shri D.C. Mandal. That is to say, for six months prior to the date of the letter of protest dated 2-6-1988 since the appellants came to know about the correct classification on 1-6-1988 when the judgment of the Tribunal rendered in the case of Collector of Central Excise, Ahmedabad v. Melamine Fibre Board Ltd. -Order Nos. 335 to 337/1988-C, dated 14-4-1988 [since reported in 1988 (036) ELT 139] came to their knowledge. In reply, the learned S.D.R., while supporting the Order proposed by the learned Technical Member, Shri D.C. Mandal (since retired) added that the learned Judicial Member, while holding that the question of time-bar is immaterial to the present case has relied upon the case of Premier Tyres Ltd. Kalamassery v. Collector of Customs,1984 (016) ELT 419 but on a reading of the said judgment it would appear that the facts and circumstances of that case are quite different from the facts and circumstances of the present case inasmuch as in that case the refund claim was filed in time and during the pendency of the said refund claim the assessee of that case sought amendment in the refund claim consequent to change in classification claiming larger amount than what was originally claimed. Dealing with this question of amendment the Tribunal held that the amendment of claim consequent to change in classification is permissible even after the expiry of the period of limitation under Section 27 of the Customs Act, 1962 as once the amendment is allowed, it relates back to the claim which was originally made and therefore there is no question of limiting the refund to that of original claim on the ground of limitation. In a nutshell, his submission was that in the said case of Premier Tyres Ltd. Kalamassery, supra, the period was not in dispute and the only question which was involved in that case was as to whether the amendment for larger amount after the expiry period of limitation prescribed under Section 27 of the Customs Act, in the original claim for refund could be allowed or not and therefore it is not apt to the present case. It was also argued that Rule 233-B of the Central Excise Rules, 1944 which provides for the detailed procedure to be followed in cases where the duty is paid under protest was in force at the. time when the said letter of protest dated 2-6-1988 was filed but this letter dated 2-6-1988 does not satisfy the requirement of the said Rule 233B and therefore the benefit of the said letter treating it as a protest should not have been given by the learned Technical Member vide his proposed Order. Replying to the alternative argument that the said letter of protest dated 2-6-1988 be treated as a claim for refund and be given effect retrospectively that is to say for six months prior to the date of the letter of protest dated 2-6-1988, it was contended that the said letter of protest should not have the retrospective effect.

13. Before I advert to the submissions made by both sides it would be advantageous to state the facts of the present case in some more details. The appellants are manufacturers of “Laminated Paper or Paper Board”. They started their manufacturing activities of the said goods on and from 28-1-1987 and submitted their first Classification List No. 1/RLP/Ch. 39/87 for the period commencing from 27-1-1987 claiming the classification of the said goods under sub-heading 3920.37 attracting duty at the rate of 35% ad valorem. It was approved on 31-3-1987 without any modification and the appellants received the approved classification list on 6-4-1987 and paid the duty accordingly. Thereafter, the appellants submitted their second Classification List No. 2/RLP/Ch. 39/87-88 dated 1-3-1988 in respect of the same product for the period commencing from 1-3-1988 claiming the classification under the same sub-heading 3920.37 attracting the duty at the rate of 35% ad valorem. It was also approved without any modification on 13-5-1988 and the appellants paid the duty accordingly. It further appears from the record that they submitted their third Classification List No. 3/RLP/Ch. 39/88-89 dated 2-6-1988. Thereafter the appellants vide their letter dated 2-6-1988 addressed to the Assistant Collector of Central Excise, Calcutta, stated that their said product merit classification under Chapter 48 of C.E.T. in view of the judgment delivered by this Tribunal in the appeal filed by the Collector of Central Excise, Ahmedabad, against Melamine FibreBoard Ltd. Order No. 335 to 337/1988-C, dated 14-4-1988 [since reported in 1988 (036) ELT 139] and therefore they disputed the earlier Classification List No. 3/RLP/Ch. 39/88-89 dated 2-6-1988 submitted on 2-6-1988 in respect of Laminated Sheets mistakenly classifying under sub-heading No. 3920.37 and therefore they are submitting revised classification List. It was also stated therein that by this very letter they also stake their claim for refund of duty paid in excess for the entire period from the month of February 1987 till date, adding that henceforth they will pay duty on their said product under protest.

14. The appellants thereafter submitted their revised Classification List bearing No. 3/RLP/Ch. 39/88-89 dated 2-6-1988 with effect from 2-6-1988 claiming classification of their said product under sub-heading 4823.90 attracting the effective rate of duty at the rate of 12% ad valorem. The same was returned to the appellants by the Superintendent under a covering letter of 7-10-1988 stating that the earlier Classification List has been approved under Chapter 39 which cannot be changed as it has been classified under proper chapter. However, it was re-submitted on 19-12-1988 as per the direction of the Calcutta High Court. On such re-submission the Assistant Collector of Central Excise issued a Show Cause Notice dated 6-4-1989 to the appellants in respect of the said revised Classification List on 6-4-1989 asking the appellants to Show Cause as to why the said product be not classified under sub-heading 3920.37 instead of sub-heading 4823.90 as claimed by them. This Show Cause Notice is still pending for adjudication. See para 12 of the Order-in-Original.

15. It also appears from the record that after addressing the said letter dated 2-6-1988 to the Assistant Collector of Central Excise, Calcutta, the appellants submitted their two refund claims one for Rs. 9,10,805.32 said to be the excess duty paid on their said product during 17-12-1987 to 22-2-1988 and another claim of Rs. 1,56,259.51 said to be the excess duty paid for the period 11-3-1988 to 1-6-1988. These refund claims were submitted on 16-9-1988. On receipt of these refund claims the Assistant Collector issued Show Cause Notice dated 1-3-1989 calling upon the appellants to Show Cause as to why the said refund claims be not rejected inter alia on the ground that the said product was rightly classified under sub-heading 3920.37 and these refund claims being filed beyond six months as prescribed under Section 11B of the Central Excises and Salt Act, 1944 are barred by limitation. The appellants contested the Show Cause Notice on the ground that their product merits Classification under Heading 4823.90 and that their two refund claims under reference are not time barred. However, the Deputy Collector negatived the said contentions of the appellants and held that the subject goods are correctly classifiable under Heading 3920.37 and also rejected the refund claims as time-barred. Against the said Order of the Deputy Collector, the appellants filed their appeal before the Collector (Appeals), but without success. Hence the appellants have come up with their present appeal before this Tribunal.

16. From a resume of the facts, as stated above, it is clear that the appellants paid the duty in terms of their two approved Classification Lists, namely, First Classification List No. l/RLP/39/87 dated 1-1-1987 effective from 20-1-1987 and Second Classification List No. 2/RLP/39/87-88 dated 1-3-1988 effective from 1-3-1988. These Classification Lists were never challenged. Subsequently, the appellants submitted their third Classification List No. 3/RLP/Ch. 39/88-89 dated 2-6-1988 and it is only on 2-6-1988 that the appellants sent a letter stating that their product laminated sheets were classifiable under Chapter 48 and communicated their desire to submit revised classification list, and ultimately filed their third revised Classification List No. 3/RLP/Ch. 39/88-89 effective from 2-6-1988 which is still pending for adjudication, as could be seen from paragraph 13 of the Order-in-Original. In other words, the present two refund claims relate to the said First two Classification Lists, that is to say, Classification List dated 1-1-1987 for the period commencing from 27-1-1987 and Classification List dated 1-3-1988 effective from 1-3-1988 for the excise duty paid on their product from 17-12-1987 to 22-2-1988 and 11-3-1988 to 1-6-1988 which were never challenged. Therefore, when these present refund claims were filed the Classification Lists could be reopened under Rule 173-B(5) of the Central Excise Rules only for prospective period and not for past period as held by this Tribunal in the case of Collector of Central Excise v. Gurmukh Singh & Sons, 1986 (025) ELT 94. In other words, for the purpose of considering the refund claims, the question of re-opening of the Classification can be taken for consideration and if the contention of the assessee regarding the Classification is found correct then it would definitely relate to prospective periods. So far as the past periods are concerned, there is no authority, under the said Rule 173-B(5) to undo the effect of any decision already taken. Thus, for the purpose of the present controversy, when it is held in favour of the appellants that their product falls under Heading 4823.90, while considering the question of refund, it cannot be said by any stretch of imagination that the refund of duty so determined while considering the refund claim itself arose as a result of any order passed in appeal or revision under this Act, as envisaged under subsection (3) of Section 11B of the Central Excises and Salt Act, 1944. Thus, I respectfully disagree with the learned Judicial Member and agree with the findings recorded by the learned Technical Member.

17. As regards the alternative submission, I find that this submission is beyond the scope of the question referred to me for decision. From the question referred to me, as above, it is clear that what is required to be decided by me is as to whether the entire claim was within time or the refund is admissible for the period from 16-3-1988 to 1-6-1988 as observed by the Technical Member. For the reasons recorded by the learned brother, Shri D.C. Mandal, with which I agree, I am also of the view that the refund is admissible from 16-3-1988 and the refund claims for the period prior to 16-3-1988 are barred by limitation.

18. In the result, I answer the aforesaid question as follows :

“That the refund is admissible from the period from 16-3-1988 to 1-6-1988 under Rule 11B (Should be Section 11B - Editor) of the Central Excises and Salt Act, 1944, and the claims for the periods prior to 16-3-1988 are barred by limitation, as held by the Member (Technical).”

2-12-1991

FINAL ORDER

[Per: K.S. Venkataramani, Member (T)]. - In the light of the majority decision the appeal is disposed and it is held that the paper based laminated sheets are correctly classified under Chapter 48 C.E.T.A., 1985 and it is also held that the refund is admissible only for the period from 16-3-1988 under Section 11B of Central Excises and Salt Act, 1944 and the claim for the period prior to 16-3-1988 is barred by limitation.

Dated: 2-1-1992  

Equivalent 1992 (61) ELT 132 (Tribunal)