TMI Blog2009 (1) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent. [Order per : T.K. Jayaraman, Member (T)]. - This appeal has been filed against the Order-in-Appeal No. 141/2005 (H-III)-CE dated 18-7-2005 passed by the Commissioner of Customs and Central Excise (Appeals) Hyderabad. 2. We heard both sides. 3. The appellants exported IOPOMIDOL (Tech) on payment of duty under claim for rebate during 4-3-2003 to 7-7-2003. The rebate sanctioned was for an amount of Rs. 1,48,23,424/-. It was later found out that the said product exported was exempted vide Notification No. 6/2003, dated 1-3-2003. Consequently, they were not entitled for rebate claimed by them. In their letter dated 25-2-2004 they informed the Department of their intention to pay back the rebate already sanctioned. They paid back the amount by debit in PLA on four dates in June, 2004. The Divisional Assistant Commissioner directed the appellants to pay interest at applicable rate from the date of sanctioning rebate to the date of repayment of amount. The interest works out to Rs. 21,62,336/-. This amount was adjusted by the Assistant Commissioner against another amount due to the party vide Order-in-Original No. 46/2004 dated 10-12-2004. Against the said order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 347 (Tri.-Bangalore). (iii) Merchant Impex v. CCE, Bangalore - 2007 (219) E.L.T. 508 (Tri.-Bangalore). (e) Further, CESTAT in the case of Stella Rubber Works (Unit-II) v. CCE (Appeals-II) Bangalore - 2007 (211) E.L.T. 433 (Tri-Bang.) has held that the amount of rebate sanctioned cannot be adjusted towards interest due in an earlier case without issuing notice and adjudication in the earlier cases. (f) The CESTAT in several cases has held that the Assistant Commissioner cannot review his own orders and recover any amount, which was sanctioned and paid by him. The following case-laws are relied on : (i) Voltas Ltd. v. Commissioner of Customs Central Excise, Hyderabad - 2006 (202) E.L.T. 355 (Tri.-Bang.) (ii) Collector of Central Excise, Raipur v. Raja Ram Maize Products - 1998 (97) E.L.T. 157(Tri.-New Delhi) 4. The learned JCDR stated that the appellants had got rebate erroneously sanctioned. Therefore, for the period between the date of sanction and the date of repayment, they are liable to pay the interest and this interest has been adjusted by the Original Authority while sanctioning rebate in other cases. Since the interest is liable to be paid by the appellant, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62,336/- towards interest payable by the appellants on the erroneous rebate of Rs. 1,48,23,424/-. The appellant is aggrieved over the order of the Original Authority on the following points : (i) In terms of decided case-laws, the appellant is not liable to pay interest at all on the erroneously sanctioned rebate. (ii) The said interest could not have been adjusted without issue of show cause notice. (iii) Having sanctioned the rebate, demanding interest is equivalent to review his own order by the Original Authority. (iv) In the absence of show cause notice and confirmation of the erroneously sanctioned rebate, no interest is payable. Several case-laws were cited by the appellants. 5.2 To examine the legality of the impugned order, we should keep in mind the facts of this particular case with reference to the relevant legal provisions without being carried away by the several decisions cited by the appellant. 5.3 The rebate is nothing, but the refund of Central Excise duty paid on the goods exported. Hence, sanction of rebate is equivalent to sanction of refund. If refund is sanctioned and later it is found out that a mistake has happened, it is called an 'erroneous re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he duty so accepted by such person within thirty days of the receipt of the notice.] [Provided that if such person has paid the duty in full together with, interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notice are served under sub-section (1) shall, without prejudice to the provisions of section 9, 9A and 9AA, be deemed to be conclusive as to the matters stated therein : Provided further that, if such person has paid duty in part, interest and penalty under sub-section (1A), the Central Excise Officers, shall determine the amount of duty or interest not being in excess of the amount partly due from such person.] (2) The [Central Excise Officer] shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. [(2A) Where any notice has been served on a person under sub-section (1), the Central Excise Officer, - (a) in case any duty of excise has not been levied or paid or has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B) shall not apply to any case where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President.]. (3) For the purposes of this section, - (i) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (ii) "relevant date" means, - [(a) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid- (A) where under the rules made Under this Act a periodical return, showing particulars of the duty paid on the excisable goods removed during the period to which the said return relates, is to be filed by a manufacturer or a producer or a licensee of a warehouse, as the case may be, the date on which such return is so filed; (B) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (C) in any other case, the date on which the duty is to be paid under this Act or the rules made thereunder;] (b) in a case where duty of excise is provisionally assessed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vied or short-paid or erroneously refunded, the person who is liable to pay the duty as determined under sub-section (2), or has paid the duty under sub-section (2B), of section 11A, shall, in addition to the duty, be liable to pay interest at such rate not below [ten per cent] and not exceeding thirty-six per cent, per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act, or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2), or sub-section (2B), of section 11A till the date of payment of such duty : 5.6 A combined reading of Section 11A(2B) and Section 11AB(1) makes it abundantly clear that even when the assessee voluntarily pays the erroneous sanctioned refund, he is liable to pay interest in terms of Section 11AB. For e.g.- In the present case the rebate has been sanctioned on the following dates : 10-4-2003, 25-6-2003, 8-8-2003, 3-7-2003, 21-8-2003. However, the assessee paid back the sanctioned amount on the following dates : 9-6-2004, 21-6-2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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