TMI Blog2010 (2) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant. Smt. Joy Kumari Chander, Jt. CDR, for the Respondent. [Order] - This is an appeal filed by M/s. Ogilvy Mather Pvt. Ltd. seeking to vacate the Order-in-Appeal No. 61/2007 dated 30-9-2007 which sustained the order of the Deputy Commissioner of Service Tax, Bangalore-III Division under which he had demanded an amount of Rs. 4,48,188/- holding the same to be erroneously sanctioned refund vide Order-in-Original No. 277/2004 dated 13-9-2004. The original authority had held that sanction of refund attracted un just enrichment relying on the judgment of Hon'ble Apex Court in the case of Rajasthan Spinning Weaving Ltd. v. Collector, reported in 1999 (112) E.L.T. A115 (S.C.). The Apex Court had rejected Civil Appeal No. 4405 of 1993 against the order of the Tribunal in the case of M/s. Sangam Processors (Bhilwara) Ltd. v. Collector, reported in 1994 (71) E.L.T. 989 (Tribunal). Tribunal had held that refund of excess duty to the assessee would entail unjust enrichment even if the same is passed on to the buyer through credit notes after clearance of the excisable goods. 2. The facts of the case are that the appellants had paid excess service tax to the tune of Rs. 4,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnored the judicial authorities cited by the appellants while relying on four other decisions. The CBEC Circular did not clarify that review under Section 35E of Central Excise Act was not required. Therefore the impugned order was contrary to the instructions of CBEC which were binding on the Commissioner (Appeals). The appellants relied on several decisions of the Tribunal laying down that when refund claims were sanctioned by the Revenue, reopening the matter by issue of show cause notice without filing an appeal against such order was not maintainable in law. Vide Order-in-Original No. C. No. 16/252/1998-S.T. Re funds dated 13-9-2004, the Assistant Commissioner had found on verification of bills, credit notes, confirmation letters from the clients, etc. that doctrine of unjust enrichment did not arise in the refund of the impugned amount and that the same was a second time payment of the service tax due. In the light of these findings, the impugned order wrongly held that the sanction of refund was errone ous on account of unjust enrichment. The authorities had relied on the decision of the Tribunal in the case of CCE v. Addison Co. [1997 (93) E.L.T. 429 (T)] for ordering rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent that the refund sanctioned could not be demanded as erroneous refund invoking Section 11A of the Central Excise Act without simultaneously following procedure laid down under Section 35E of the Act. (i) Voltas Ltd. v. CC CE [2005 (202) E.L.T. 355 (T- Bang)] (ii) CCE v. Supdtg. Engineer, TNEB [2008 (9) S.T.R. 446 (T) = 2006 (201) E.L.T. 619 (Tri.)] (in) CCE v. Assarn Forest Product (P) Ltd [2000 (125) E.L.T. 613 (T)] (iv) Taparia Tools Ltd. v. C.C. [2004 (177) E.L.T. 1002 (T-Mumbai)] (v) Forbes Gokak Ltd. v. CCE [2005 (182) E.L.T. 219 (T-Bang)] (vi) Sree Digvijay Cement Co. Ltd. v. Collector of C. Ex. [1991 (52) E.L.T. 631 (T-New Delhi)] (vii) CCE v. Gokak Mills [2006 (206) E.L.T. 562 (T-Bang.)] Judgment in the case of Kuntesh Gupta v. Management of Hindu Kanya Mahavidya laya, Sitapur and others (1987 (32) E.L.T. 8 (S.C.) is cited to argue that quasi judicial authority cannot review its own order unless the power of review is expressly conferred by the statute. The judgment of the Apex Court in the case of VBC Industries Ltd. v. U.O.I [1999 (114) E.L.T. 378 (AP) affirmed by Apex Court in 2000 (120) E.L.T. A188 (S.C.) is cited to rely on its ratio that when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instant case, the assessee had paid excess amount of service tax and issued credit note for such excess amounts subsequently to their clients. After a few rounds of litigation before the authorities including the Tribunal, the original authority sanctioned refund under order-in-original dated 13-9-2004 pursuant to remand direction contained in order-in-appeal in 137/2004 dated 30-7-2004 which held that the claim for refund had been made in time and that the question of unjust enrichment had to be examined. On 14-9-2004, the original authority issued show cause notice proposing to recover the refund sanctioned tentatively holding the same to be erroneously made and involved ur4ust enrichment. The proposal was confirmed and the refund granted initially demanded along with interest under order-in-original No. 49/DIVN.III/06-07 dated 29-12-2006. The Commissioner's (Appeals) order sustaining the said order of the original authority is under challenge. 9. The impugned order is assailed mainly on the ground that it sustained an order passed without following settled law. The original authority had become functus officio after passing the order sanctioning refund. He had no power to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f facts, or contravention of any of the provisions of this Chapter or the rules made thereunder, with intent to evade payment of service tax, by such person or his agent, to whom a notice is served under the proviso to sub—section (1) by the Central Excise Officer, such person or agent may pay service tax in full or in part as may be accepted by him, and the interest payable thereon under section 75 and penally equal to twenty-five per cent of the service tax specified in the notice or the service tax so accepted by such person within thirty days of the receipt of the notice.] (2) The [Central Excise Officer] shall, after considering the representation, if any, made by the p on whom notice is served under sub-section (1), determine the amount of service tax due from, or erroneously refunded to, such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined." The corresponding provisions in Section 11A of the Central Excise Act are pari materia. Therefore both the parties have relied on case laws on the provisions of Section 11A. 9.2 The impugned order was passed relying on the following decisions:- (i) Bh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Ltd. - 2004(166) E.L.T. 3 (S.C.), hence the decisions relied upon by the appellants on this issue are not applicable. Therefore, the principle of unjust enrichment is fully applicable in the present case. By following the decision of the Larger Bench of the Tribunal in the case of Grasim Ind. (Chemical Division) v. CCE, Bhopal (supra) and other decisions relied upon by Revenue, I am fully convinced that once the appellants had passed on the duty incidence to the customers at the time of clearance of goods, they were not entitled for refund. Therefore, the refund amount was correctly ordered to be recovered from them which was erroneously sanctioned to them. tinder these circumstances, I do not find any merit in the appeals and the all the appeals are dismissed." The Tribunal had held that dues erroneously refunded can be recovered by invoking Section 11A of the Central Excise Act. In Orissa Cement Ltd. (supra) case the Tribunal held similarly. It was held that it was not necessary to have the re fund sanction order reviewed under Section 35E first before issue of demand under Section 11A for recovery of erroneous refund. In the above order the Tribunal has held as follows:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 35EE. We respectfully follow the said Ruling. Accordingly, we reject the contention of the appellants that it was not permissible for the Collector to issue notices under Section 11A for recovery of the refunds made, with out getting the Assistant Collector's orders sanctioning the refunds being set aside through appeals filed before the Collector (Appeals). The very wording of Section 11A covers duty erroneously refunded. As refunds are decided under appropriate orders by the Assistant Collectors and as such refunds if erroneous, are to be recovered after issue of notices under Section 11A, to insist on such orders to be set aside through appeal proceedings under Section 35E would effectively nullify Section 11A which result has to be avoided. We, therefore, hold that the Collector had the power to issue a notice under Section 11A for recovering refunds erroneously granted with out that order being set aside by the Collector (Appeals). However, in the facts and circumstances of the case, we hold that there was no case for any recovery of the refunds made and the notices were also barred by limitation as no suppression, wilful misstatement or contravention of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Counsel for the Petitioners relied upon the decision of the Apex Court in the case of Collector of Central Excise , Kanpur v. Flock (India) Pvt. Ltd. reported in 2000 (120) E.L.T. 285 and submitted that without challenging the order-in-original, it is not open to the revenue to deny refund. It was submitted that since the refund was granted as a consequential relief, in the absence of challenge to the order of adjudicating authority, the issue of refund had attained finality and it could not have been kept open by invoking jurisdiction u/s. 11A of the said Act. In our opinion, the aforesaid decision of the Apex Court is not applicable and wholly distinguishable on facts. First of all, the issue before the Apex Court was with regard to scope of refund available to the assessee under Rule 11 of C.E. Rules, 1944 and not with reference to the scope of Section 11A of the said Act empowering the revenue to initiate proceedings to recover the amount of duty erroneously refunded. Secondly, as stated hereinabove, for invoking jurisdiction under Section 11A, there need not be adjudication order or appellate order as the case may be and Section 11A is an independent substantive provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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