1. The case was heard afresh by the new Bench on 9-2-1983.

2. The appellants stated at the outset that they had withdrawn their writ petition from the Supreme Court on 17-1-1983 and that the Tribunal was now free to decide the case on merits.

3. The dispute in this case pertains to interpretation of exemption notification No. 213/63-Central Excises, as amended by notification No. 29/67-C.E. To facilitate a proper understanding of the issues involved, we reproduce below this notification, together with its amendment :-

Notification No. 213/63-C.E., as amended by notification No. 29/67-C.E.

"In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts pipes and tubes of copper alloys, falling under sub-item (3) of Item No. 26A of the First Schedule to Central Excises and Salt Act 1944 (1 of 1944) in the manufacture of which duty paid copper or copper alloy in any crude form or manufactures thereof are used, from so much of the duty of excise leviable thereon, as is equivalent to the duty already paid under sub-item (1) and/or (2) of the said item on copper or copper alloys in any crude form or manufactures thereof.

Notwithstanding anything contained in the foregoing paragraph, such pipes and tubes of copper and copper alloys manufactured from copper or copper alloys in any crude form purchased from the market on or after the 20th day of August, 1966, shall be exempt from so much of the duty of excise leviable thereon as is equivalent to the duty payable on the copper or copper alloys in any crude form, as the case may be."

The facts briefly are as follows :-

Duty on crude copper and copper alloys was raised from Rs. 1,500/- per MT to Rs. 4,000/- per MT with effect from 1-8-1974. The appellants submitted a classification list on 17-8-1974 which was approved by the Assistant Collector. This classification list contains an endorsement in the following terms :-

In the case of imported copper which has borne countervailing duty at Rs. 1500/- per M.T. under Customs notification No. 64/74, dated 1-8-74 and which is used in the manufacture of pipes and tubes set-off to the extent of Rs. 1500/-per M.T. only is allowed. There however such pipes and tubes are manufactured from copper and copper alloy in any crude form lying in stock with manufacturer on 1-8-74 or purchased from the market, set-off admissible will be to the extent of Rs. 4000/- per M.T."

The appellants' case, in short, is that set-off of crude copper stage duty became payable to them at the revised rate of Rs. 4,000/- per M.T. with effect from 1-8-74. To be precise the material period of dispute can be split up into two parts as under :-

1st Period-13-8-74 to 11-11-74.

During this period, set-off was granted to them initially at the old rate of Rs. 1500/- per M.T. Later, however, the Assistant Collector granted them refund on 17-7-76 for the balance set-off at the rate of Rs. 2500/- per M.T. But soon this was followed by a notice served on them on 26-10-76 asking them to show cause why the amount of refund paid to them be not recovered.

IInd Period-18-11-74 to 31-1-75

During this period set-off was granted to the appellants at the enhanced rate of Rs. 4000/- per M.T. initially itself.

4. Shri Jain argued on behalf of the appellants that the words "duty payable" in second paragraph of the exemption notification clearly referred to duty that is payable, that there was no scope for adding or modifying any words in the notification, that there was no warrant for interpreting "duty payable" to mean duty that was payable on the date of purchase of the crude copper in question as the Department had done, that it was practically difficult for the appellants to find out as to what duty had been paid on the crude copper which they had purchased from the market, that the demand raised by the Department for the second period (18-11-74 to 31-1-75) was time-barred, it having been made on 26-10-76, that is, after the expiry