JUDGMENT :

1. By the present writ petition, petitioner is praying for quashing of orders dated 26.08.1992 passed by Assistant Collector, Excise, Sitapur whereby demand for tax liability was confirmed as well as order dated 08.01.1993 passed by Assistant Collector (Appeals), dismissing petitioner’s appeal against the order dated 26.08.1992 and order dated 05.02.1999 passed by the Customs, Excise and Gold Appellate Tribunal.

2. Brief facts of the case are that the petitioner company is involved in the manufacturing of sugar, which is subjected to levy of Central Excise. In order to incentivise sugar mills to continue manufacturing during the lean season the Central Government by notification dated 28.04.1978 offered rebate on Central Excise levied on all sugar produced between 01.05.1978 to 30.09.1978 in excess of the average production of the corresponding period of the preceding three years. On 14.08.1978, the earlier notification was modified and the rebate was now applicable on excess production between 01.05.1978 to 15.08.1978. Petitioner too submitted his claim for rebate on excess production for the relevant period. The same was allowed vide order dated 04.10.1978 and a rebate of Rs. 16,79,339.65 was credited into the Personal Ledger Account of the petitioner mill. On 08.04.1980 a demand cum show cause notice under Rule 10 of Central Excise Rules, 1944 (hereinafter referred to as Rules of 1944) was served upon the petitioner for recovery of Rs. 1,65,878.34 allegedly claimed and received by petitioner in excess of actual rebate due to the petitioner mill. On the basis of petitioner’s reply, by impugned order dated 26.08.1992 demand of Rs. 1,65,878.34 is confirmed against the petitioner and appellate authorities have also rejected his appeals by impugned orders dated 08.01.1993 and 05.02.1999.

3. Counsel for the petitioner challenges the impugned orders on the ground that the order dated 04.10.1978, approving petitioner’s claim for rebate of Rs. 16,79,339.65 is final and therefore demand notice dated 08.04.1980 for recovery of Rs.1,65,878.34 is time-barred. As per Rule 10 of the Rules of 1944 no demand can be made after a period of six months, while show cause notice for recovery of rebate is issued after almost eighteen months and is therefore clearly time-barred. He further challenges the finding that the order dated 04.10.1978 approving the rebate is passed on the basis of provisional assessment and therefore not hit by the statutory limitation of Rule 10 of the Rules of 1944. He further submits that the limitation of six months is not applicable only on such final assessment which are obtained by fraud, collusion, wilful misstatement or suppression of facts and since it is not alleged in the show cause notice, said Rule is therefore, not applicable in the present case. In support of his case counsel for the petitioner relies upon judgment of the Supreme Court in the case of Raj Bahadur Narain Singh Sugar Mills Ltd. vs Union of India and Ors.; (1997) 6 SCC 81.

4. Learned counsel for the respondents, Mr. Deepak Seth opposes the submissions of the counsel for the petitioner and claims that there is no illegality in the impugned order. He submits that order dated 04.10.1978 itself states that it is only a provisional order and therefore is not hit by the limitation prescribed under Rule 10 of the Rules of 1944. Counsel for the respondents submits that facts of the case in Raj Bahadur (supra) are distinguishable from the present case as it is with regard to a final order. This fact is evident from paragraph 2 of the judgment which states that appellant’s rebate claim has been pre-audited as admissible under the notification. This means that the rebate claim was sanctioned after audit of the records and thus it was not a provisional order. Therefore, he submits that, the contention of counsel for the petitioner that the order dated 04.10.1978 was final, does not hold its ground. Bar placed on demands after six months by Rule 10 o