The limitation provided in Section 11-B(1) of the Central Excises and Salt Act, 1954, is not applicable to goods that are entitled to exemption.

( 1 ) THE only question that arises for consideration in this petition is if the claim of refund of excise duty paid by petitioner on certain goods which were exempted under notification was within time.

( 2 ) ALTHOUGH facts are undisputed yet it is necessary to narrate them in brief in order to appreciate if the order passed by opposite parties is well founded in law. In June, 1977 notification was issued under Rule 8 (1) of Central Excise Rules of 1954 framed under Central Excises and Salt act,1954 (hereinafter referred to as Act) exempting all excisable goods, on which the duty on excise was leviable and in the manufacture of which any goods falling under Item No. 68 of the first Schedule of the Act referred to as inputs had been used from so much of the duty of excise leviable on it as was equivalent of the duty of excise already paid on the inputs. After the notification issued in June, 1977, therefore, Central Excise Collectorate, Allahabad issued instructions on 7th December, 1977 clarifying and providing that the set off duty predetermined and approved by Assistant Collector will be allowable at the time of clearance of finished excisable products of manufacturers who intend to avail the set-off on observance of conditions mentioned therein. In March, 1978 the petitioner submitted an application to the Assistant collector, Central Excise seeking his approval in set off of excise duty on the goods mentioned therein as they were used in manufacture and duty had already been paid on it. The application was, however, rejected by Assistant Collector, Central Excise as petitioner had not been showing and claiming amount of set off at the time of clearance of finished items from time to time. The assistant Collector, held that the notification did not contemplate the cash refund on the duty paid on the inputs but contemplate the relief by way of set of procedure and as the petitioner did not avail of the set off amount at time of clearance the petitioner was not justified in claiming set off at latter stage. In appeal the order was set aside and it was held that there was no justification to decline approval of the classification list because it was not made within time. As petitioner had been seeking approval of classification list since March, 1980 and the department did not dispute maintenance of accounts by petitioner which established that the goods on which exemption was being sought were received under inspection of the officers. The appellate authority further observed that the petitioner was claiming set off and no refund which could still be granted by way of credit. In pursuance of the appellate order the petitioner wrote a letter to the Assistant Collector to allow the credit or set off as directed by the appellate authority, who in turn directed the Range Superintendent to allow credit in set off register. He, however, directed that the said credit shall not be utilised for payment of duty on matches for future clearance and then the petitioner should request the Asstt. Collector for adjustment. In pursuance of this direction the Range Superintendent, visited the petitioners factory and determined the claim for set off and allow it to be credited as set off. The petitioner thereafter wrote to the Assistant collector that the amount determined by the Range Superintendent may be refunded. On this application a show cause notice was issued as to why the application be not rejected as time-barred under Section 11-B of the Act, and after filing of reply it was rejected by the assistant Collector and the order was maintained in appeal.

( 3 ) THE question is whether Assistant Collector and the appellants authority were justified in refusing to allow the claim of petitioner on ground of limitation. It may be mentioned that the goods which have been used in the manufacture must have been such on which duty had been paid. On that there is no dispute. The instructions in this regard issued by the Central Exc