COLLECTOR OF C EX Vs. MYSORE ACETATE AND CHEMICALS CO LTD

JUDGEMENT

(1.) THIS appeal is filed by the Collector of Central Excise, Bangalore and is directed against the order of the Collector of Central Excise (Appeals), Madras dated 15-12-1987. The respondent herein are manufacturers of Ethyl Acetate failing under Chapter 2907.90 and filed a refund claim in respect of the duty paid on ethyl acetate on the ground that the same is exempted from payment of duty in terms of Central Excise Notification 217/86, dated 2-4-1986. The respondent contended that though the benefit of this notification was not claimed in the classification list, the respondent, coming to know about the applicability of the notification to them, took out a refund claim under Section 11B of the Central Excises and Salt Act, 1944 before the expiry of the period of limitation of six months from the date of payment of duty. The refund claim was rejected by the original authority on the ground that the respondent herein had not claimed the exemption in terms of the aforesaid notification while filing the classification list and the lower appellate authority reversed the order of the original authority and granted the refund, as a result of which the Collector of Central Excise, Bangalore has preferred the present appeal.

(2.) Shri K.M. Vadivelu, the learned Departmental Representative submits that inasmuch as the benefit of the notification was not claimed by the respondent in the classification, the respondent should have challenged the correctness of the same in a manner known to law by filing an appeal before the proper appellate authority and not having done that, cannot independently have recourse to a claim of refund under Section 11B of the Act. The learned D.R. in this context placed reliance on the ratio of the ruling in the case of 'Herschel Rubber (Pvt.) Ltd. v. Collector of Central Excise, Calcutta', reported in 1987 (30) E.L.T. 454 (Tribunal), and also on the ruling of the Special Bench in the case of 'Modi Rayon and Silk Mills v. Collector of Central Excise, Meerut', reported in 1987 (29) E.L.T. 933 (Tribunal).

(3.) WE have carefully considered the submissions made before us. It is not disputed by the Department that the respondent is entitled to the benefit of the notification in question and that the refund was not granted on the ground the respondent herein did not make a specific claim of the said notification in the classification list filed. This argument of the learned D.R. cannot be acceded to. The ruling of the Special Bench in Delhi Chemicals case, comprising three learned Members, was rendered on 27th June 1988 where an identical issue arose for consideration; that was also a case where the refund claim of the party was rejected on the ground that the party had not made a claim for the benefit of Notification 80/80 in their classification. The Special Bench held in that case as under: