TMI Blog2022 (9) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... ttedly this order of the Tribunal has attained finality as an appeal was not filed by the Department before the High Court against the order of the Tribunal. Section 11A of the Excise Act does provide for recovery of duties erroneously refunded, but if duties have been refunded pursuant to orders passed under section 11B of the Excise Act, it is not possible to hold the powers under section 11A of the Act can still be exercised for refund of the amount as this will not fall in the category of duties erroneously refunded . It also needs to be noted that an appeal can be filed to the High Court against the order passed by the Tribunal and if this power has not been invoked, it will not be open to the Department to take recourse to the provisions of section 11A of the Excise Act - The Commissioner, therefore, could not have issued the show cause notice dated 30.08.2017. In the present case, as under section 11A of the Excise Act when the order passed by the Tribunal in proceedings arising out of section 11B of the Excise Act had attained finality. This issue was also examined by the Andhra Pradesh High Court in THE COMMISSIONER CUSTOMS AND CENTRAL EXCISE, TIRUPATI VERSUS M/S. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MEMBER (TECHNICAL) Shri Tarun Gulati, Senior Advocate and Shri Ankit Sachdeva, Advocate for the appellant Shri Rakesh Agarwal, Authorized Representative for the Department ORDER M/s Bridgestone Pvt. Ltd. [ the appellant ] has filed this appeal to assail the order dated 16.11.2018 passed by the Commissioner, CGST and Central Excise Ujjain [ the Commissioner ], by which an amount of Rs. 19,09,56,371/- earlier sanctioned and refunded has been directed to be recovered from the appellant under section 11A of the Central Excise Act 1944 [ the Excise Act ] and thereafter credited to the Consumer Welfare Fund under section11A (2) of the Excise Act. The appellant has also been directed to pay interest on the said amount in terms of section 11AA/AB of the Excise Act. 2. The appellant is engaged in the manufacture of passenger cars, trucks, buses radial tyres and tubes. In the course of business, the appellant sells tyres directly to the original equipment manufacturers and pays central excise duty on the transaction value. The appellant also transfers the manufactured tyres to depots that later on sell the tyres to dealers. In this case, the appellant pays excise duty a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d claim under section 11B of the Excise Act after the expiry of the scheme. 6. Pursuant to the aforesaid order passed by the Assistant Commissioner, the appellant filed refund claims on quarterly basis as every scheme was valid for a quarter only. 7. 13 refund claims for the period from April 2001 to June 2004 for an amount of Rs. 1,90,53,661/- were, however, rejected by the Deputy Commissioner by order dated 27.05.2005. The appellant filed an appeal before the Commissioner (Appeals) and the refund claims were ultimately allowed by an order dated 31.03.2006 passed by the Commissioner (Appeals). The Department granted refund to the appellant but also filed an appeal before the Tribunal. This appeal of the Department was allowed by the Tribunal by order dated 23.02.2009 by way of remand and the appellant was directed to produce documentary evidence. After remand, the Deputy Commissioner, by an order dated 11.03.2010, held that the appellant was entitled to refund for the period from April 2001 to June 2004 and also for interest on account of delayed payment. Similar refund was granted to the appellant for the period from October 2008 to September 2011 by various order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings 10. The present proceedings arise out of three refund applications filed by the appellant for the subsequent period from October, 2011 to June, 2012. Three show cause notices dated 10.07.2012, 20.11.2012 and 19.12.2012 were issued to the appellant for each of the three refund applications on grounds inter alia that: i. That the transaction value declared by the appellant in invoice raised by the appellant on the dealer is the final transaction value; ii. That the produce of the appellant reaches the hand of the ultimate customer who pays the price charged by the retailer, which is inclusive of the duty paid by the appellant at the time of the removal. The duty is supposed to have passed on and collected inclusive in the value/price collected from the ultimate consumer; iii. That these incentives/discounts provided by the appellant are in the form of sales promotion expenses and therefore, is inclusive in the transaction value in terms of section 4 of the Excise Act; and iv. That the claim of refund under consideration is hit by the doctrine of unjust enrichment. 11. The appellant filed a reply to the said show cause notice. The Deputy Commissioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... structure and facilities at their showrooms. In view of this, the impugned order disallowing the deduction of the quantity/turnover discount to different is not correct. 8. As regards the question of unjust enrichment, there is no dispute that the discounts have been passed on by the issue of credit notes. Once the credit notes are issued by the assessees to the dealers, the invoice price mentioned in the invoices issued earlier would stand reduced to that extent and in such a situation, the burden of proof would shift to the Department and it would be for the Department to establish that the credit notes issued are bogus. In the present case, there is no such evidence produced by the Department. In view of this, following the judgment of the Hon'ble Rajasthan High Court in the case of A.K. Spintex Ltd. (supra), and the judgment of the Karnataka High Court in the case of Sudhir Papers (supra), we hold that there is no unjust enrichment and that the incidence of higher duty paid by the assessee and whose refund is being claimed has been borne by them and has not been passed on by them to their customers. (emphasis supplied) 13. A perusal of the aforesaid order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no force in the submissions of the appellant that the case does not fall within the ambit of erroneous refund ; c. The judgment of Supreme Court in Addison overrides all the case laws cited by the appellant. Thus, the refund sanctioned erroneously to the appellant is liable to be recovered and credited to the Consumer Welfare Fund; d. The refund claims have been sanctioned during the period from 07.09.2015 to 08.06.2016 and show cause notice has been issued on 30.08.2017. Thus, the demand for the recovery of erroneous refund is well within limitation period of two years. e. The issue in the present case attained finality only after the judgment of the Supreme Court in Addison and the argument of the appellant that the show cause notice is hit by the principle of Res Judicata is not acceptable; f. No restriction regarding issuance of second show cause notice for subsequent period invoking provisions of normal period has been placed by the Supreme Court in Nizam Sugar v/s Collector of Central Excise, A.P. [ 2006 (197) ELT 465 (SC) ]. g. That interest is leviable. 18. It is against this order of the Commissioner that the present appeal has been filed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a re-assessment cannot be done on the basis of a subsequent judgment, but even a rectification is not permissible. Learned senior counsel also pointed out that issuance of a notice under section 11A of the Excise Act would amount to reassessment, as has been held by the Allahabad High Court in Shahnaz Ayurvedics v/s Commissioner of Central Excise, Noida [ 2004 (173) E.L.T.337 (All.) ]. Learned senior counsel also submitted that the show cause notice under section 11A of the Excise Act is in the nature of reopening a concluded assessment and would amount to a review as was observed by the Supreme Court in Canon India Pvt. Ltd. v/s Commissioner of Customs [ 2021 (376) E.L.T.3 (S.C.) ]. 24. Shri Rakesh Agarwal, learned authorized representative appearing for the Department submitted that the decision dated 30.07.2018 of the Tribunal for the period from January 2016 to June 2016 would not come to the aid of the appellant as that decision was passed on the fact that the incidence of excess duty paid on behalf of the post clearance discounts had not been passed on to the customer by the appellant. Learned authorized representative also submitted that the decision dated June 04, 2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tailed hereinabove, within sixty (60) days. 7. The appeal is disposed of by way of remand on above terms. 28. The aforesaid order dated 17.07.2014 passed by the Commissioner (Appeals) was assailed both by the appellant and the Department before the Tribunal. The Tribunal decided the appeal by order dated 04.06.2015 and the said order has been reproduced above. The order passed by the Commissioner disallowing the additional discounts was set aside and the appeal filed by the Department against that part of the Commissioner (Appeals) holding that the claim of the appellant was not hit by the doctrine of unjust enrichment was dismissed. The order dated 04.06.2015 passed by the Tribunal has been accepted by the Department and no appeal has been filed. 29. What needs to be noted is that on the basis of order dated 04.06.2015 passed by the Tribunal, an amount of Rs. 2,34,99,027/- for Block I was refunded to the appellant on 12.10.2015. Subsequently, refund of Rs. 16,74,57,344/- was also granted to the appellant for Block II on the basis of the aforesaid order dated 04.06.2015 of the Tribunal. It is thereafter that a show cause notice was issued to the appellant by the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court against the order passed by the Appellate Tribunal. 33. In the present case, as noted above, the amount was refunded to the appellant pursuant to an order dated 04.06.2015 passed by the Tribunal and admittedly this order of the Tribunal has attained finality as an appeal was not filed by the Department before the High Court against the order of the Tribunal. 34. Section 11A of the Act deals with Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded . Sub-sections (1) and (4) and Explanation I are reproduced below: (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or 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 : (a) the Central Excise Officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission of the learned counsel for the appellant that if the orders granting refund under section 11B of the Excise Act had attained finality, a show cause notice under section 11A of the Excise Act could not have been issued has to be examined. 36. Section 11A of the Excise Act does provide for recovery of duties erroneously refunded, but if duties have been refunded pursuant to orders passed under section 11B of the Excise Act, it is not possible to hold the powers under section 11A of the Act can still be exercised for refund of the amount as this will not fall in the category of duties erroneously refunded . It also needs to be noted that an appeal can be filed to the High Court against the order passed by the Tribunal and if this power has not been invoked, it will not be open to the Department to take recourse to the provisions of section 11A of the Excise Act. 37. The Commissioner, therefore, could not have issued the show cause notice dated 30.08.2017. In the present case, as under section 11A of the Excise Act when the order passed by the Tribunal in proceedings arising out of section 11B of the Excise Act had attained finality. 38. This issue was also examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such refund is claimed. Sub- section (2) of Section 11B mandates that upon receipt of any application for refund, the Assistant Commissioner or Deputy Commissioner, if he is satisfied that the duty is refundable, should make an order. The refund order is 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. ***** 32 . It is only when an order of adjudication is passed under Section 11B that a person, who makes a claim for refund, will get his money back. This assumes significance in the light of the fact that by the proceedings dated 29-9- 1998, the appellant/assessee was informed of the sanction granted by the Assistant Commissioner to make a refund of a sum of Rs. 3,31,365/- arising as a consequence of the finalisation of assessment. 33. In simple terms, the refund that the appellant got was and should have been only after an adjudication under Section 11B and not without an adjudication . It must be pointed out that if an authority has done something, it must be presumed that he has done it in accordance with law. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... answered in favour of the appellant/assessee and the appeal deserves to be allowed. (emphasis supplied) 40. The Gauhati High Court in Commissioner of Central Excise, Shillong vs. Jellapore Tea Estate [ 2011 (268) E.L.T. 14 (Gau.) ] observed that the Revenue cannot take recourse to section 11A of the Excise Act when it had a statutory remedy available to it to challenge the order by resorting to the powers under the Excise Act. 41. The Gujarat High Court in Commissioner of Customs vs. Millat Fibres [ 2011 (271) E.L.T. 512 (Guj.) ] held that a show cause notice issued by the Adjudicating Authority on the ground of unjust enrichment would amount to review of its own order granting refund, which is not permissible. The relevant paragraphs are reproduced below : 7. The record of the case indicates that vide order dated 22nd February, 2005, the adjudicating authority had adjudicated on the claim of refund made by the respondents . At the relevant time, it was permissible for the adjudicating authority to go into all issues which were necessary to be looked into for the purpose of deciding the application for refund, including the aspect of unjust enrichment. The adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been ordered to be appropriated against outstanding Government dues. The adjudicating authority has no power or authority under the Act to reconsider or review or sit in appeal over its earlier order . No such power or authority has been pointed out by the learned counsel for the appellant. 9. In the aforesaid factual background, the Commissioner (Appeals) was justified in holding that the show cause notice issued by the adjudicating authority on the ground of unjust enrichment, would amount to review of his own order which was not permissible. The view expressed by the Commissioner (Appeals) that the proper course of action was for the Department to review the order under Section 129D(2) of the Act and thereafter file appeal under Section 129D(4) is in consonance with the provisions of the Act. The impugned order of the Tribunal whereby it has confirmed the findings recorded by the Commissioner (Appeals) does not suffer from any legal infirmity so as to warrant interference. No question of law, much less any substantial question of law can be stated to arise out of the impugned order of the Tribunal. ( emphasis supplied) 42. It is, therefore, more than apparent that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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