TMI Blog2015 (3) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... decision did not deal with the issue as to whether a notice under Section 11A of the Central Excise Act is mandatory for the purpose of proceeding for recovery and, thereby, on the facts of the present case, it was held to be not applicable. On a perusal of the above decision, as also the impugned order of the Tribunal, this Court is of the considered view that the distinction as drawn by the Tribunal distinguishing the said judgment with the facts of the present case is fully justified and does not warrant any interference, since the issue that arise in the case on hand is whether issuance of show cause notice is mandatory under Section 11A of the Act. On a careful reading of Section 11-A, it is clear that the said section mandates the issuance of a show cause notice, prior to passing an order, asking the person to show cause as to why duty, which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, shall not be paid. From a perusal of the documents available on record, as also the order of the Tribunal, it is clear that no such notice, as mandated under Section 11A, was issued for recovery of the duty on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell, are as hereunder :- The respondent is engaged in the manufacture of automobile parts and components. The assessee cleared waste and scrap and replacement of defective products without payment of duty. The period in question pertains to September, 1998. On the ground that the investigation revealed that the assessee cleared waste and scrap and replacement for defective products without payment of duty and also resorted to under-valuation of the goods, adjudication proceedings were initiated and pending adjudication, the assessee deposited ₹ 1.55 Crores for the purpose of co-operating with the investigation of the Department. However, the said payment of deposit was made by the assessee under protest. A show cause notice dated 2.12.98 was issued on the assessee invoking the extended period of limitation as provided under proviso to Section 11A (1) of the Central Excise Act, demanding duty, interest and also penalty. After adjudication, the demand was confirmed by the Commissioner of Central Excise, vide order dated 11.5.01, together with penalty equivalent to duty and the amount of ₹ 1.55 Crores, already deposited, was appropriated. Against the said order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board's circular No.423/56/98-CX dated 22.9.1998 and the decision of the Supreme Court in Commissioner of Central Excise Vs Re-Rolling Mills (1997 (94) ELT 8 (SC)), which in turn relied upon the decision in Union of India Vs Jain Shudh Vanaspathi Ltd. Anr. (1196 (86) ELT 460 (SC) :: 1996 (10) SCC 520), allowed the appeal preferred by the assessee. For better appreciation, the relevant portion of the order of the Tribunal is extracted hereinbelow :- 7. In the Circular No.423/56/98-CX dated 22.9.1998, the CBEC had issued the following clarification :- Certain doubts have been raised regarding whether the erroneous refunds granted could be recovered by recourse to review under Section 35-E of the Central Excise Act or demands under Section 11A within the statutory time limit as laid down. The SC in the case of CCE Vs. Re-rolling Mills (reported in 1997 (94) ELT 8 (SC) has inter alia held as following. The learned Counsel for the parties do not dispute that this appeal is covered by the decision of this Court in Union of India Ors. Vs. Jain Shudh Vanaspati Ltd. Anr. 1996 (86) ELT 460 (SC) = (1996) 10 SCC 320. In that case the court was dealing with Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal has to be interfered with. 5. Per contra, learned counsel appearing for the respondent/assessee reiterated his submissions as made before the Tribunal to the effect that though appeal was filed as specified under Section 35 (E) (2) and is within the time specified, however, no show cause notice has been issued, within the stipulated time, as contemplated under Section 11A of the Act, which is mandatory in nature and, therefore, in the absence of following the mandatory necessity of issuing the show cause notice, the appeal filed by the Department has to fail. 6. Heard the learned standing counsel appearing for the appellant/Department and the learned counsel appearing for the respondent/assessee and also perused the materials available on record as also the decisions relied on by the learned counsel appearing on either side. 7. The first question of law, which is raised, relates to the plea of unjust enrichment and much emphasis is laid on the decision of the Supreme Court in Mafatlal Industries case (1997 (89) ELT 247 (SC)). Relevant portion of the order passed by the Supreme Court in Mafatlal Industries case (supra) has been extracted in the grounds (b ) and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w the order resulting in short levy under Section 35E should be in conformity with Section 11A of the Act. In the said case, the Tribunal held that Section 11A cannot be read in Section 35E (3) and it was held that the provisions of limitation prescribed under Section 35E and Section 11A are independent. The said view was also affirmed by the Supreme Court in Asian Paints (India) Ltd. - Vs Commissioner of Central Excise, Bombay (2002 (142) ELT 522 (SC)). 10. In the impugned order passed by the Tribunal, however, the abovesaid judgment in Asian Paints (supra) was distinguished by the Tribunal on the ground that the said decision did not deal with the issue as to whether a notice under Section 11A of the Central Excise Act is mandatory for the purpose of proceeding for recovery and, thereby, on the facts of the present case, it was held to be not applicable. On a perusal of the above decision, as also the impugned order of the Tribunal, this Court is of the considered view that the distinction as drawn by the Tribunal distinguishing the said judgment with the facts of the present case is fully justified and does not warrant any interference, since the issue that arise in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onths was amended to one year by Section 97 of the Finance Act 2000 (10 of 2000) with effect from 12.5.2000. Therefore, for all purposes, any period prior to 12.5.2000, for the purpose of recovery of duties not levied or not paid or short-levied or short-paid or erroneous refund, the time for issuance of show cause notice is only six months from the relevant date. 13. On a careful reading of Section 11-A, extracted above, it is clear that the said section mandates the issuance of a show cause notice, prior to passing an order, asking the person to show cause as to why duty, which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, shall not be paid. From a perusal of the documents available on record, as also the order of the Tribunal, it is clear that no such notice, as mandated under Section 11A, was issued for recovery of the duty on the ground of erroneous refund. This view is further fortified by the decision of the Supreme Court in the case of Collector Vs Re-rolling Mills (1997 (94) ELT 8 (SC)). 14. Further, the Board's Circular No.423/56/98-CX dated 22.9.1998 also stresses the need for the conce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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