Devendra Pratap Singh, J. - (1.) Heard Sri S.D. Singh, learned counsel for the petitioner and Sri Jayant Banerji for the Union of India.
(2.) Questioning the correctness of a Division Bench of this Court in the case of Ajanta Paper Products v. Collector, Central Excise Collectorate, Kanpur (1982 U.P.T.C. 105), another Division Bench framed the following two questions in the petition and referred it to the Full Bench for its opinion. i. Whether proceedings initiated under Rule 10 of the Central Excise Rules, 1944 cannot be continued under Section 11-A of the Act? ii. Whether the proceedings initiated under Rule 10 lapsed on the date Rule 10 was omitted, namely 17.11.1980 as held by the Division Bench of this Court in Ajanta Paper Products v. Collector, Central Excise Collectors, Kanpur (1982 U.P.T.C. 105)?
(3.) The petitioner is a duly incorporated company engaged in the manufacture of sugar which is a excisable good under item No. 1 of the First Scheduled to the Central Excise and Salt Act, 1944 (here-in-after referred to as the Act) where, at the relevant time, duty was payable at 37.5% ad valorem together with additional duty at 7.5% ad valorem. In order to spur sugar producing units to increase sugar production during the lean period, the Central Government issued notification No. 108 of 1978 on 28.4.1978 granting exemption from excise duty on so much of sugar produced in excess of the average of last three years for the period 1.5.1978 to 15 8.1978 to the extent of Rs. 54/- perquintal for free sale sugar and Rs. 9.60 per quintal for levy sugar. The petitioner allegedly produced 47314.98 quintal of excess sugar and thus claimed exemption to the extent of Rs. 25,55,008.90 and was permitted to credit it to its Personal Ledger Account as proforma credit in pursuance of the aforesaid exemption notification. However, vide show cause notice dated 5.10.1979 issued under Rule 10 (1) of the Rules framed under the Act, the Assistant Collector required the petitioner to show cause why refund of Rs. 11,09,012/ be not ordered as it was entitled to exemption of only Rs. 14,54,0098.30 on the ground that exemption could not exceed the duty actually paid. The petitioner filed his reply to the show cause raising several grounds, including, that of limitation.;