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TMI Blog2023 (1) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... voices and thus, the appellants have fraudulently availed excess refund under the said Notification by over-valuing the goods cleared. A show-cause notice dated 09.06.2011 was issued seeking to recover the erroneous refund of Rs.92,61,591/- under Section 11A of the Central Excise Act, 1944 along with interest under Section 11AB and penalty under Section 11AC ibid and proposing to levy penalty on Shri Dinesh Garg. The show-cause notice was confirmed vide Order dated 11.06.2012, passed by the Commissioner of Central Excise, J&K, which is impugned in this case. 2. Shri Naveen Bindal assisted by Shri Aman Garg, learned Counsel for the appellants, submits that Section 11A deals with recovery of duty of excise "erroneously refunded"; thus, it has to be a case of refund of duty of excise under Section 11B; as per Board Circular dated 19.12.2002, the provisions of Section 11B is not applicable to exemption under Notification No.56/2002 as the said notification is just a mechanism to operationalize the exemption and it is not a case of refund; therefore, the provisions for "erroneous refund" are not applicable in view of the facts of the present case. 3. Learned Counsel further submits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case may be, shall refund the amount on provisional basis by the 15th of the next month to the month under consideration and thereafter may adjust the amount of refund by such amount as may be necessary in the subsequent refunds admissible to the manufacturer. 6. On going through the provisions of the Notification, it is clear that the refund of duty as per the said Notification is different from refund of duty envisaged in Section 11B. We find, as submitted by the learned Counsel for the appellants, CBEC vide Circular No.682/73/2002-CX dated 19.12.2002 clarified as follows: "In this context, it may be pointed out that the "Refund" envisaged in the notifications is not on account of any excess payment of excise duty by the manufacturers, but is basically designed to give effect to the exemption. In other words, the mechanism has been adopted to operationalize the exemption envisaged in these two notifications. In view of this aspect of the matter, the provisions of Section 11B of the Central Excise Act, 1944 would not apply in the case of these notifications." In view of the above, it appears that the provisions of Section 11A, as far as recovery of "erroneous refund" is conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proviso to sub section (1) by the CENTRAL Excise Officer, may pay duty in full or in part as may be accepted by him, and the interest payable thereon under section 11AB and penalty equal to twenty five per cent of the duty specified in the notice or the duty so accepted by such person within thirty days of the receipt of the notice. 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; Provided that if such person has paid the duty in full together with, interest and penalty under sub section (1A), the proceedings in respect of such person and other persons to whom notice is served under sub section (1), shall, without prejudice to the provisions of sections 9, 9A and 9AA be deemed to be conclusive as to the matters stated therein: Provided further that if such person has paid duty in part, interest and penalty under sub section (1A), the Central Excise Officer, shall determine the amount of duty or inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of show cause notice to the respondent. The revenue, however, has relied upon the proviso appended to sub-section (1) of Section 11A of the Act which provides for extended period of limitation of five years, provided it is a case where duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud or collusion or any willful misstatement or suppression of facts or contravention of any of the provisions of this Act and the rules made thereunder with an intent to evade payment of duty by such person or his agent etc. The sine quo non for invoking the proviso is to demonstrate by reference to material on record that the assessee had claimed and has been paid erroneous refund of the excise duty by reason of fraud, collusion or any willful misstatement or suppression of facts or contravention of any provisions of the Act and the rules framed thereunder and that this fraud, collusion, willful misstatement or suppression of facts etc., is made with an intention to evade payment of duty by the assessee or his agent. 13 We have gone through the entire record, but could not find an iota of material on record which would suggest t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are also in agreement with CESTAT that, once the excise duty in favour of assessee is sanctioned by the competent authority after passing a speaking order and which order is appealable under section 35 of the 12 Act, parallel proceedings seeking recovery of the sanctioned refund cannot be launched by the Adjudicating Authority. Unless the orders of sanctioning refund passed by the Adjudicating Authority are reversed in appeal or revision under the Act, Section 11 cannot be invoked by terming such sanctioned refund of excise duty as 'erroneous refund' by holding collateral proceedings under section 11A of the Act. Any duty, which is paid /refunded to the assessee after holding formal proceedings and passing speaking orders in favour of the assessee, cannot be termed as 'erroneous refund'. The revenue, if it is of the opinion that the Adjudicating Authority has made an erroneous refund in favour of assessee to which it was not otherwise eligible, can avail the remedy of filing appeal or revision under the Act. So long as the orders stand as having attained finality, the same cannot be tampered with by the Adjudicating Authority by launching collateral proceedings purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower can be exercised only if duty has not been levied or paid or has been short-levied etc. "on the basis of any approval, acceptance or assessment relating to the rate of duty on or 14 valuation of excisable goods under any other provisions of this Act". Insofar as the present case is concerned, the only issue that arose for consideration was whether the assessee was entitled to the benefit of Notification No.33/99-CE dated 8.7.99. There was no issue of any approval, acceptance or assessment relating to the rate of duty nor was there any issue relating to the valuation of any excisable goods. Ex-facie, therefore, Section 11A of the Act was inapplicable to the facts of the case". 13. That apart, the Assistant Commissioner of Central Excise, Silchar had passed a final order in favour of the assessee on 29.4.2002 and admittedly, this order was revisable under Section 35-E of the Act. For reasons best known to the Commissioner of Central Excise, Shillong no action was taken to have the order of the Assistant Commissioner revised or set aside. Having failed to avail of the statutory remedy available under the Act, the Revenue sought to circumvent the law (as it were) by taking recou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in proviso to section 11A of the Act. We are, therefore, of the firm opinion that where facts were known to both the parties, as in the instant case, it was not open to the CEGAT to come to a conclusion that the appellant was guilty of "suppression of facts". In DensonsPultretaknik vs. Collector of Central Excise [2003 (11) SCC 390], this Court held that mere classification under a different sub-heading by the manufacturer cannot be said to be willful misstatement or 16 "suppression of facts". This view was also reiterated by this Court in Collector of Central Excise, Baroda, vs. LMP Precision Engg.Co.Ltd. [2004 (9) SCC 703]" 19 The judgment passed by the Hon'ble Supreme Court in Grasim Industries Ltd vs Commissioner of Central Excise, (2011) 14 Supreme Court Cases 685, relied upon by by Mr. Jagpaul Singh learned counsel appearing for the revenue, is beside the point and the question of law formulated for adjudication in this appeal. Para 10 of the judgment which has been strongly relied upon by Mr. Jagpaul is set out hereinbelow. "10.Section 11A provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A would be attracted only in a case where the refund made in favour of the assessee is erroneous by reason of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any provisions of the act and the rules framed thereunder with an intent to evade payment of duty by the assessee or his agent. 22 As conclusively held hereinabove in the instant case, the refund sanctioned by the adjudicating authority in favour of the respondent was after proper application of mind and by passing of speaking orders and therefore, cannot be termed as 'erroneous refund' for the purposes of section 11A of the Act. The extended period of limitation provided under proviso to sub section 1 of section 11A is not attracted as we find no material on record to demonstrate 18 that the purported erroneous refund was sanctioned in favour of the respondent-assessee on the basis of some fraud, collusion or misstatement /misrepresentation of facts and, that too, with an intention to evade payment of excise duty. The revenue has also failed to make out a case of unjust enrichment having failed to show as to how the respondent has been benefited by such purported erroneous r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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