G. Sankaran, Member (T)

1. The present proceedings arise out of the notice bearing F. No. 198/B/13/94/81-C X.5, dated 21st July, 1981 issued by the Central Government to the Respondents (hereinafter referred to as Uma Laminated) calling upon them to show cause why the Central Government, in exercise of its powers under Section 36(2) of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act), should not set aside the Order-in-Appeal No. 68/81 dated 9-2-1981 passed by the Appellate Collector of Customs and Central Excise, Hyderabad and restore the Orders-in-Original dated 12-3-1980 and 5-8-1980 passed by the Assistant Collector of Central Excise, Hyderabad or pass orders as deemed fit. These proceedings have come to this Tribunal as transferred proceedings under Section 35-P of the Act and are being disposed of as if it were an appeal filed by the Central Government before the Tribunal.

2. Uma Laminated are manufacturers of "Polyethylene Coated Paper" and "Polyethylene Sandwiched Paper" using duty-paid kraft paper and duty-paid polyethylene granules as the main raw materials. Excise duty was being charged on these goods under Item No. 17 (2) of the Central Excise Tariff Schedule (C.E.T.). On 13-7-1979, Uma Laminated filed an application before the Assistant Collector of Central Excise, Hyderabad claiming refund of the duty-paid on Poly coated Paper during the preceding "3 years" amounting to Rs. 31,87,078.75 on the ground that "manufacture of polyethylene coated papers using duty-paid papers and duty-paid polyethylene does not come under Item 17(2) C.E.T. as it is only a processing of the duty-paid raw materials. That being the case at best the products we are manufacturing can be classified as a paper product which is not covered under any item of the C.E.T".

3. On 30-5-1980, Uma Laminated filed another claim before the Assistant Collector on the same ground for an amount of Rs. 13,89,381.24 paid as duty on polyethylene coated paper during the period from 13-6-1979 to 28-5-1980.

4. By two orders dated 12-3-1980 and 5-8-1980, the Assistant Collector rejected the claims holding that the products attracted duty under Item 17 (2) C.E.T. He also held that a major portion of the claim filed on 13-7-1979 was barred by limitation under Rule 11 of the Central Excise Rules, 1944, for the period prior to 13-1-1979. The claim filed on 30-5-1980 was also held to be inadmissible on merits and barred by limitation under Rule 11 of the Central Excise Rules for the period from 1-7-1979 to 29-11-1979.

5. Uma Laminated filed two appeals against the aforesaid orders of the Assistant Collector. The Appellate Collector, Hyderabad, by a detailed order, held that the papers manufactured by Uma Laminated were treated papers classifiable under Item 17(2) C.E.T., but that the treatment of the base Kraft Paper by Uma Laminated did not constitute "manufacture" but only processing and, therefore, the subject treated papers would not be liable to any excise duty. He further held that an unwritten law had been evolved into existence to the effect that amounts collected in the name of duties, which are found to constitute imposts, require to be refunded, if the claim for their refund is made within 3 years from the date of their payment. Consequently, he set aside the Assistant Collector's orders and directed him to refund all duties which were clearly shown to have been paid within a period of 3 years from the date of payment (claim ?). He also said that the refund should not exceed the amounts originally claimed and that the refund should be granted by 30-6-1981.

6. The Collector of Central Excise, Hyderabad, being of the view that the Appellate Collector's order was not correct, wrote on 11-6-1981 about the subject to the Addl. Secretary, Ministry of Finance so that the Government would, if they so desired, review the Order-in-Appeal under Section 36(2) of the Act.

7. On 21-7-1981, the Central Government issued a notice to Uma Laminated un