TMI Blog2016 (4) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... l could have been pursued against the finalisation of the assessment. As decided in Asian Paints (India) Limited [2002 (4) TMI 62 - SUPREME COURT OF INDIA ] there is no nexus between Section 11A and Section 35E. Section 11A does not indicate that the legislature intended to override Section 35E. Both sections have to be read harmoniously. In the present case, Annexure-I certificate has been issued in favour of the petitioners from time to time on executing B-8 security bond and on furnishing a bank guarantee. The Department has to follow the procedure under Section 35E for setting aside the Annexure-I certificate. Unless, the Annexure-I certificate is cancelled or rejected by the competent Authority, by following the procedure under Section 35E, it is not permissible for the respondents to invoke Section 11A of the Act. Therefore, we are of the considered opinion that the issuance of show cause notices is without jurisdiction and is liable to be struck down Unfortunately, in none of the decisions relied upon by the learned Standing Counsel, the Courts were confronted with an order of adjudication passed under Section 11B on an application. Once an application for refund is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1944 by the Original Authority for alleged erroneous refund (earlier granted by the same Original Authority) without reviewing at all the refund order of the Original Authority by the Superior Authority in terms of Section 35E of the Act ibid (vide para No. 6 of the impugned order) ? 5. Mr.Raghavan Ramabadran, learned counsel for the appellant/ assessee submitted that he is not pressing the substantial question of law that was framed on 19.3.2008. This is recorded. 6. Therefore, the only question that survives for our consideration today is the question that was additionally framed on 23.4.2015. 7. Brief facts that led to the filing of the above appeal can be summarily stated as follows : (i) The appellant is the manufacturer of dry cell batteries and they were clearing the goods on payment of duty on a provisional basis as per Rule 9B of the Central Excise Rules, 1944 by executing a bond with security in the form of bank guarantee. (ii) In order to finalise the assessment, the Assistant Commissioner issued a notice. Different issues were raised and they were explained by the assessee. One of the points, on which, the Assistant Commissioner focussed was the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of Section 11A, holding that there was an erroneous refund of ₹ 3,31,365/-. This was followed by an Order in Original dated 21.6.1999 directing the recovery of the refund already made. This Order in Original having been confirmed by the Commissioner (Appeals) by an order dated 29.2.2000 and by the Tribunal by an order dated 19.9.2007, the assessee is before us. 8. In the background of the above facts, the main thrust of the argument of the learned counsel for the appellant/assessee is that after having allowed the order of the Commissioner (Appeals) dated 3.4.1998 to attain finality and without even taking recourse to the procedure available under Section 35E(2), it is not open to the Department to take recourse to Section 11A. 9. The response of the Department to this contention is that Section 11A and Section 35E are two different provisions, which operate in different fields and that wherever there is erroneous refund, the same can always be recovered by initiating proceedings under Section 11A without taking recourse to the provisions of Section 35E. 10. It is on account of these rival contentions, this Court thought it fit to frame the additional question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, as the case may be. (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. (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 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Central Excise in his order. (3) No order shall be made under Sub-Section (1) or Sub-Section (2) after the expiry of one year from the date of the decision or order of the adjudicating authority. (4) Where in pursuance of an order under Sub-Section (1) or Sub-Section (2) the adjudicating authority or the authorised officer makes an application to the Appellate Tribunal or the Commissioner (Appeals) within a period of three months from the date of communication of the order under Sub-Section (1) or Sub-Section (2) to the adjudicating authority, such application shall be heard by the Appellate Tribunal or the Commissioner (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of Sub-Section (4) of Section 35B shall, so far as may be, apply to such application. (5) The provisions of this Section shall not apply to any decision or order in which the determina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) of Section 35E is a limited power and that power extends only to a direction to such Authority to apply to the Commissioner (Appeals) for determination of such points. 17. In other words, the power of revision available under Section 35E(2) is limited to the extent of directing the Authority to file an appeal to the Commissioner (Appeals) for the determination of the issues. But, even the limited power under Sub-Section (2) of Section 35E can be exercised only within the period of limitation prescribed under Sub-Section (3). Sub-Section (3) prescribes a period of limitation of one year. This period of one year is available from the year 1984, as it was introduced under Finance Act, 1984. 18. Sub-Section (5) of Section 35E carves out an exception to the power available under Sub-Sections (1) and (2). It says that the provisions of the Section will not apply to certain types of decisions or orders, in which, the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purpose of assessment of any duty is in issue or is one of the points in issue. 19. There is an Explanation under Sub-Section (5), which indicates the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 532], wherein it was held that turnover discount was an admissible abatement and should be known at the time of removal. This Order in Original was set aside by the Commissioner (Appeals) by the order dated 3.4.1998. In the said order, the Appellate Authority recorded a finding of fact to the effect that the cash discount was allowed by the appellant/assessee uniformly to all customers (paragraph 4 of the order dated 3.4.1998 of the Commissioner). As a consequence, the Commissioner (Appeals) held that the cash discount became an admissible deduction irrespective of whether the discount was availed or not. 24. After referring to two decisions of the Bombay High Court, the special leave petition, against one of which, had also been dismissed by the Supreme Court, the Commissioner (Appeals) held that the Original Authority was wrong in stating that the cash discounts were restricted to the cases wherever passed on. The said order of the Commissioner (Appeals) attained finality. Though, without reference to the order of the Commissioner (Appeals), the Original Authority finalised the assessment by his order dated Nil/4/1998 and made a demand for duty, the Original Authority subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capable of being given effect to in several methods including adjustment or rebate of duty of excise, all of which are prescribed in Clauses (a) to (f) under the Proviso to Sub-Section (2) of Section 11B. 29. Sub-Section (3) of Section 11B, which contains a non-obstante clause, makes it clear that de hors any judgment, decree, order or direction of the Appellate Tribunal or any court or any other provisions of the Act, no refund shall be made except as provided by Sub-Section (2). 30. Therefore, the detailed procedure prescribed under Section 11B not only regulates the manner and form, in which, an application for refund is to be made, but also prescribes a period of limitation, method of adjudication as well as the manner, in which, such refund is to be made. In simple terms, Section 11B is a complete code in itself. 31. Therefore, it is clear that what is required of an Assistant Commissioner or Deputy Commissioner under Sub-Section (2) of Section 11B is to adjudicate upon the claim for refund. The expression 'Adjudicating Authority' is also defined in Section 2(a) to mean any Authority competent to pass any order or decision under this Act, but does not include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der this Act. 36. Therefore, an order of recovery can be passed under Section 11A even by an Assistant Commissioner, as he happens to be a Central Excise Officer in terms of Clause (a) in Sub-Section (1) of Section 11A. In contrast, the processing of an application and the passing of an order on an application for a refund, can be made either by the Assistant Commissioner or by the Deputy Commissioner under Sub-Section (2) of Section 11B. Hypothetically, it would mean that a Deputy Commissioner can pass an order for refund under Section 11B(2) and an Assistant Commissioner can invoke the proceedings for recovery under Section 11A(1). 37. In other words, by reading the provisions of Section 11A in such a manner as the learned Standing Counsel would request us to do, we would be recognizing a power in a Subordinate Authority to invoke the power of recovery under Section 11A, despite the fact that a refund application has been adjudicated upon by a Superior Authority under Section 11B. We should keep this fact in mind before dealing with the interplay between Sections 11A and 35E. 38. As we have seen from the language employed in Section 35E, which we have extracted above, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, which was also confirmed by the Supreme Court in Asian Paints (India) Limited [(2002) 142 ELT 522], cannot be of any application. 42. No one can have a quarrel with the proposition that Sections 35E and 11A operate in different fields and are invoked for different purposes. We are merely concerned in this case with the interplay between Sections 11A and 35E. We are also concerned with what happened in the form of an adjudication under Section 11B. What happens in a case where an adjudication takes place under Section 11B did not at all fall for consideration in Asian Paints (India) Limited. 43. The decision of this Court in Sivanandha Pipe Fittings Ltd., was also on the point as to whether it is open to the Authorities to take recourse to one remedy where several remedies are available. It is not the contention in this case that there are plural remedies available to the Department. The contention in this case is as to whether, after having allowed an adjudication under Section 11B to attain finality, there was any remedy open to the Department at all under Section 11A. Therefore, the decision in Sivanandha Pipe Fittings Ltd., is also of no assistance to the Department. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the interplay of Sections 11A and 35E of the Act. In the said case, show cause notices issued to the Corporation as to why excise duty payable on low sulphur heavy stock and furnace oil should not be demanded, came to be challenged. The show cause notices were issued under Section 11A of the Act. Reliance was placed by the assessee upon the orders passed by the Adjudicating Authority under the Rules of the year 2001 and it was contended that such an order could be rectified only through an appeal mechanism prescribed under Section 35E(2). As seen from paragraph 11 of the decision, the contention of the assessee was that Section 11A does not contain a non obstante clause and that therefore, it cannot be invoked to nullify the appeal remedy available to the Department under Section 35E(2). 50. The very same argument now advanced by the Department to the effect that Sections 11A and 35E operate in two different independent fields was raised by them. After considering the issue elaborately and also after taking note of the decision in Asian Paints (India) Limited approved by the Supreme Court, this Court came to the conclusion in paragraph 23 as follows: In our opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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