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M/s. Golden Plast Rigid PVC Pipes Versus Commissioner of Central Excise, Trichy

2018 (1) TMI 421 - CESTAT CHENNAI

Refund of amount under protest - time limitation - CBEC Circular dated 22.9.1998 - Held that: - The period of dispute in the impugned appeal is 2003-04 and as such, the department officers were fully aware of the above Board circular which are also binding on them. Nonetheless, no show cause notice has been issued in the present case proposing recovery of the alleged erroneously refunded amount - The second proviso to section 35A of the Act requires, inter alia, that where Commissioner (Appeals) .....

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hri R. Subramaniyan, AC (AR) for the Respondent ORDER Per Bench The facts of the case are that M/s. Golden Plast Rigid PVC Pipes, herein after referred to as the appellants, are manufacturers of rigid PVC pipes. On an allegation that the appellants had suppressed production and clearance and that their clearances had exceeded Rs. One crore SSI exemption limit, a show cause notice was issued, inter alia, proposing to demand duty of ₹ 3,82,431/-. The appellant paid the above amount under pro .....

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m on 15.12.2007 for the duty amount of ₹ 3,82,431/- paid by them under protest. The refund claim was sanctioned by the original authority vide order dated 14.3.2007. Department preferred appeals against both the orders of the concerned original authorities. The Commissioner (Appeals) vide a common order dated 10.11.2008, impugned herein, allowed both the appeals of the department and set aside the orders of both the lower authorities. The demand of ₹ 3,82,431/- was confirmed along wi .....

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e opportunity to show cause against the proposed order; (ii) a show cause notice within the time limit prescribed in section 11A, whereas in the instant case, no such notice was issued by the Commissioner (Appeals). 2.2 The refund which was sanctioned vide cheque E262710 dated 14.3.2007 ought to have been demanded only by issuing a proper show cause notice in terms of section 11A. It was pointed out to Commissioner (Appeals) that erroneous refund cannot be demanded by way of section 35E(2) of Ce .....

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ra 10.13 of the notice (page 27). It can be seen that the consumption norm adopted by the Revenue (27:13) is arbitrary and without any legal backing. It has been arrived at tentatively without reference to any daily production records or provision of law or any other corroborative evidence. 2.4 CENVAT credit on inputs and capital goods are available sufficiently and hence there can be no intention for evasion of duty. Therefore, the allegation to evade would fail and the demand is hit by limitat .....

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t the grant of refund of the very same amount by second adjudicating authority in order dated 14.3.2007. This being so, there is no legal infirmity in the procedure followed by the department and that there was no necessary to issue another show cause notice proposing recovery of erroneous refund. 4. Heard both sides and have gone through the records. 5. Based on the investigations initiated by the department and the short-payment of duty pointed out, the appellant had paid up an amount of ͅ .....

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is not hit by limitation. The adjudicating authority held that the refund claim is eligible for sanction on merits and sanctioned the amount of ₹ 3,82,431/-. Accordingly, in case the department felt that such sanction of refund was erroneous, show cause notice should have been issued under section 11A for recovery of duty allegedly erroneously refunded . This certainly was not done. Of course, there had been some doubt regarding whether erroneous refund granted could be granted by recours .....

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issued the following clarification :- Certain doubts have been raised regarding whether the erroneous refunds granted could be recovered by recourse to review under Section 35E 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 v. Re-Rolling Mills [reported in 1997 (94) E.L.T. 8 (S.C.)] has inter alia held as following. The learned Counsel for the parties do not dispute that this appeal is covered by the decision of thi .....

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result in the recovery of the refund. This has to be followed by SCN u/s 11A which should be issued within 6 months from the date of actual refund. Since time-limit for filling appeal u/s 35E(2) is longer than the time-limit prescribed u/s 11A, the SCN, the SCN should precede the proceedings u/s 35E(2). This view has been supported by the opinion of the Law Ministry. The Law Ministry vide F.No. 387/78/98-JC has opined thus, In view of the judgment of the Apex Court in CCE v. Re-Rolling Mills - 1 .....

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variably be raised (within six months normal period) under Section 11A the Act. 5.1 The period of dispute in the impugned appeal is 2003 - 04 and as such, the department officers were fully aware of the above Board circular which are also binding on them. Nonetheless, no show cause notice has been issued in the present case proposing recovery of the alleged erroneously refunded amount . 5.2 This aspect should have been taken note by the lower appellate authority. The second proviso to section 35 .....

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