H.R. Syiem, Member (T)

1. The dispute in this case is the grant of a refund o Rs. 114 450-40 by the Assistant Collector which was thought by his superior to be wrong. It is not necessary to go into the rules and the notification under which this refund was given by the Assistant Collector or why his Collector considered the refund to be mistaken. for our purpose, it is enough that a refund of Rs. 114 450-40 was sanctioned by the Assistant Collector to M/s. Kirtoskar on 17-10-1980, and his Collector issued a notice dated 15-9-1981 under Section 35A of the Central Excises and Salt Act to recover the money. by his order F.No. V68(30)47/TE/81/871, dated 25-10-1983, the Collector set aside the order of the Assistant Collector and ordered the assessees to repay the amount of Rs. 114450-40 which had been erroneously refunded to them.

2. The learned counsel for M/s. Kirlosker Mr. Phadnis, advocate, argued that the notice of the Collector dated 15-9-1981 was time-barred since the refund order was passed on 17-10-1980, and they got the order and also received the cheque. If they thought the sum of money had been wrongly refunded, the Central Excise should have issued notice of demand within the time-limit of Section 11A of the Central Excises and Salt Act. The Collector says in his order that when the Assistant Collector passed his order of refund in October, 1980, Section 11A had not yet come into effect; but he did not see that when he (Collector) issued his notice in September, 1981 and passed his order in October, 1983, Section 11A was very much in operation. Therefore, the time-limit of 11A was applicable and this made the notice of the Collector time-barred and his order of review Incompetent in terms of Section 35A of the Central Excises and Salt Act.

3. In another case decided around the same time in a similar dispute, the Collector passed an order favourable to the assessee.

4. The learned counsel for the department read paragraph 11 of the Collector's order and argued that the Collector correctly found that when the Assistant Collector gave the order of refund in October, 1980 the right to review was one year for on that day Section 11A had not yet been enforce. That right to review within time-limit of one year vested in the Collector when the act of refund was done and cannot taken way by the coming into force of Section 11A in November, 1980.

5. According to paragraphs 9 and 10 of 1983 ELT1277 pre-existing rights are not disturbed by an amendment. The learned counsel also read paragraphs 12 and 13 from MANU/MH/0175/1984 : 1984 (18) ELT 207; paragraphs 4 and 9 from 1983 (21) ELT 854; paragraph 9 from MANU/CE/0191/1986 : 1986 (26) ELT 1057. He said that all recoveries must remain within statutory provisions. The party had not made the declaration as required by Notification 178/77. He then read paragraphs 8 and 9 of the Collector's order. He also read paragraph 6 of Order No. 519/86-B1, dated 18-8-1986 re: Heavy Engineering. An exemption notification must be followed strictly and all conditions met and he referred to 1983 ECR1405D. He next read paragraph 6 from order No. 281/87-B1, dated 4-6-1987 re: Metal Pressing Industries.

6. The learned counsel for the licensee, however, replied that if the conditions had not been fulfilled the Assistant Collector would not have sanctioned the refund.

7. But we are no longer concerned whether the conditions were fulfilled or not. We are concerned only with whether the notice of review by the Collector and his order are compliant or congruous with the, strict meaning of the law.

8. This was an action by the Collector in exercise of his powers under Section 35A in the course of which he wanted to review an order of the Assistant Collector sanctioning a refund to the assessee. He thought for reasons he has recorded in his order that the refund was not permissible and so he sought to recover the money. for this purpose, he issued a notice on 15-9-1981 calling upon the assessees to repay the am