TMI Blog2013 (4) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... ies are legally not sustainable. The same are, therefore, quashed and set aside. Resultantly, the petitioners are held entitled to retain the rebate previously sanctioned and paid over. The authorities are refrained from seeking any recovery thereof. If during the pendency of this petition in view of no interim relief being granted, such rebate is already recovered, the same shall be refunded to the petitioners with simple interest at the rate of 9% per annum from the date of recovery till actual refund. The petition is disposed of accordingly. Rule made absolute. No costs. - Special Civil Application No. 5427 of 2004 - - - Dated:- 13-6-2012 - Akil Kureshi and Harsha Devani, JJ. Shri Paritosh Gupta for Paresh M. Dave, Advocates, for the Petitioner. Shri P.S. Champaneri, Advocate, for the Respondent. [Judgment per : Akil Kureshi, J. (Oral)]. - The petitioners have challenged an order dated 31-3-2004 passed by the revisional authority confirming the orders passed by the revenue authorities. They have further prayed for a declaration that the rebate of Rs. 3,62,650/- previously sanctioned by the authorities in favour of the petitioners is not liable to be disturbed or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se invoices AR-4s and it is believable that they may not be aware about fabrication of documents by the manufacturers viz. the Mill. Therefore I extend benefit of doubt to all the above said 6 noticees and do not hold them liable for penalty under Rule 209A of Central Excise Rules, 1944. 6. It is not in dispute that such order of the Additional Commissioner dropping the penalty proceedings against the petitioners was not challenged by the Department and it thus achieved finality. 7. More than a year later, the Department issued a fresh show-cause notice to the petitioners on 12-8-2002 and called upon the petitioners to show cause why the amount of rebate claim of Rs. 3,62,650/- should not be recovered under proviso to Section 11A(1) of the Central Excise Act, 1944. In this show-cause notice also, no allegations were made that the petitioners claimed the rebate fraudulently or by any suppression. The allegations of fraud were repeated against the manufacturer namely, M/s. Anjana Dyeing and Printing Mills. Para 4 of the show-cause notice which is significant for our purpose reads as under :- 4. In view of the above facts, it was appears that the exporter has claimed rebate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of knowledge will not be barred by limitation. Tribunal observed that relevant date has been defined in Sec. 11A(3) and no where this section provides that the relevant date means the date of acquiring knowledge by the department. As such acquiring the knowledge by the department does not take away the period of five years provided by the law makers in the Act itself. 9. The petitioners carried the matter in appeal. The Commissioner (Appeals) dismissed the appeal on 1-10-2003 observing that proviso to Section 11A(1) has been rightly invoked in the instant case for recovery of the erroneously refunded duty to the appellant. 10. The petitioners filed revision application against such orders of the authorities. The Government as the revisional authority, however, by the impugned order dated 31-3-2004 dismissed the revision application. The authority was of the opinion that refund and duty are integrally linked and it cannot be argued that while duty payment was fraudulent, at the time of refund of such duty which was fraudulently claimed to have been paid is not erroneous and is not touched by the fraud purported at the stage of duty payment. It was observed that if the receiver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Act, the Apex Court noted that the language is similar and the same grounds on which the extended period of limitation can be invoked are also the grounds on which penalty can be imposed under Section 11AC of the Act. 12.5 The counsel relied on the decision of the Apex Court in the case of Raj Bahadur Narain Singh Sugar Mills Ltd. v. Union of India reported in 1996 (88) E.L.T. 24 (S.C.) wherein the Apex Court held that a show-cause notice which did not allege any collusion, wilful mis-statement or suppression of facts and which was issued beyond the period of limitation was time-barred. 13. On the other hand, learned counsel for the Department opposed the petition contending that the authorities have correctly appreciated the facts and applied the law. Since the rebate claim of the petitioners arose out of a fraudulent act of the manufacturer, extended period of limitation was rightly invoked. 14. Having thus heard learned counsel for the parties, we may recall that in the first show-cause notice dated 10-5-2001 issued by the Additional Commissioner to Anjana Textiles and the exporters including the petitioners, there was a proposal to impose penalty against the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of limitation would apply. 17. To our mind, the stand of the Department suffers from legal fallacy. Proviso to Section 11A in clear terms provides that normal period of limitation of one year for initiation of proceedings for recovery of excise duty would be extendable in cases where such duty has not been levied or paid or short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Act or the rules with intent to evade payment of duty by such person or his agent. The words such person or his agent are extremely significant. The recovery is to be made from a person from whom such duty is not levied or has not paid or short-levied or short-paid or erroneously refunded. Extended period of limitation therefore, would be applicable if it is found that such occurrence of non-levy of duty etc. is on account of any fraud, collusion, wilful mis-statement or suppression of facts or contravention of statutory provisions with intent to evade duty by such a person or his agent. Specific language of the section does not permit any other meaning. 18. Even in absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee by adopting a means as indicated in Section 11AC. 20. Strangely, the revenue authority was of the opinion that a person who is not party to a fraud or collusion or wilful mis-statement, may avoid penal consequences but not extended period of limitation. To us, the logic does not appeal. Our conclusion gets further support from the observations made by the Apex Court in the case of Union of India v. Rajasthan Spinning and Weaving Mills (supra) noted above. 21. Under the circumstances, quite apart from and in addition to the decision of the Division Bench of this Court in the case of Commissioner of C.Ex. Customs v. D.P. Singh (supra), the decisions of the authorities are legally not sustainable. The same are, therefore, quashed and set aside. Resultantly, the petitioners are held entitled to retain the rebate previously sanctioned and paid over. The authorities are refrained from seeking any recovery thereof. If during the pendency of this petition in view of no interim relief being granted, such rebate is already recovered, the same shall be refunded to the petitioners with simple interest at the rate of 9% per annum from the date of recovery till actual refund. The petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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