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TMI Blog2013 (4) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... s before the Department. Such rebate claims were sanctioned by the competent authority by passing four separate orders all dated 28-4-2000. 3. It is not in dispute that under these four orders, total rebate of Rs. 3,62,650/- was also paid over to the petitioners. 4. It appears that thereafter, the Department carried out investigation on the premise that the manufacturer Anjana Textiles from whom the petitioners had purchased the textile goods had not paid excise duty on such goods. By way of culmination of such investigation, a show-cause notice came to be issued against the said Anjana Textiles and other exporters who had purchased the goods from Anjana Textiles including the present petitioner-M/s. Kapadia Enterprise. Against Anjana Textiles, the notice proposed recovery of excise duty amounting to Rs. 13,20,901/- with interest as also penalty under the Central Excise Act and the rules made thereunder. Against the exporters including the present petitioners, the notice called upon them to show cause why "the penalty should not be imposed upon them under Rule 209A of the Central Excise Rules, 1944 as they were also involved in evasion of Central Excise duty in collusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above mentioned exported goods thereby the amount of rebate i.e. Rs. 3,62,650/- sanctioned and paid to the exporter was erroneously paid which is required to be recovered by them under proviso to Section 11A(1) of the Central Excise Act, 1944." 8. The petitioners appeared before the adjudicating authority and opposed the proposal. The Additional Commissioner, Central Excise, Surat, however, by his order dated 31-3-2003 confirmed the demand of recovery of Rs. 3,62,650/-. With respect to the extended period of limitation, he observed as under :- "12. Coming to the next issue as to whether the said erroneously sanctioned amount of rebate can be recovered under proviso to Sec. 11A(1) ibid, I find from OIO dated 31-1-2002 of the Addl. Commr. that the Mill had taken the credit of Central Excise duty amounting to Rs. 13,20,901/- in PLA on the basis of fake TR Challans without depositing the amount mentioned therein, in the Bank during the period May '99 to Jul '99. The export goods involved in the instant case were also cleared through debits in PLA against fraudulently created credits thereby without payment of duty. The said fraud committed by the Mill and the facts regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prayed for consequential reliefs. 12. Learned counsel Shri Paritosh Gupta for the petitioners submitted that the first show-cause notice issued against the manufacturer and the exporters resulted into dropping of the proceedings against the exporters including the petitioners. The clear finding therein was arrived that there was no collusion on part of the exporters. In that view of the matter, extended period of limitation could not have been invoked. He submitted that the excise authorities and the Government gravely erred in holding that even if the fraud was committed by some person other than the petitioners, since the petitioners had received rebate in a case where such fraud of non-payment of excise duty was involved, extended period of limitation can be invoked against the petitioners. 12.1 The counsel submitted that the duty demand against Anjana Textiles was confirmed. The rebate granted to the petitioners thereafter cannot be recovered since that would amount to double recovery by the Government. 12.2 The counsel lastly submitted that once the first show-cause notice was issued proposing penalty against the petitioners which was later on dropped after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the petitioners in such a fraud. Qua the petitioners, this order achieved finality. The Department did not challenge this order. 15. In view of these facts, one thing which clearly emerges is that by the competent authority it is held in favour of the petitioners that the petitioners were not a party to the fraud committed by Anjana Textiles. The question of applicability of extended period of limitation, therefore, shall have to be judged on this basis. 16. It is well-known that sub-section (1) of Section 11A permits recovery of duty not levied or not paid or short-levied or short-paid or erroneously refunded ordinarily within a period of one year from the relevant date. Such period of limitation is extended under certain circumstances by virtue of proviso to Section 11A which reads as under :- "Provided that where any duty of excise has not been levied or paid or has been 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 this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the person who is responsible to pay the same. It cannot be accepted that the statute envisages invocation of extended period of limitation against a person who had nothing to do with such fraud, collusion, mis-statement etc. 19. At this stage, we may usefully refer to the observations of the Apex Court in the case of Union of India v. Rajasthan Spinning and Weaving Mills (supra). Comparing the language used in proviso to Section 11A(1) providing extended period of limitation and that used in Section 11AC of the Act pertaining to penalty, the Apex Court observed as under :- "18. One cannot fail to notice that both the proviso to sub-section (1) of Section 11A and Section 11AC use the same expressions : "....by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty....". In other words the conditions that would extend the normal period of one year to five years would also attract the imposition of penalty. It, therefore, follows that if the notice under Section 11A(1) states that the escaped duty was the result of any con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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