2006 (6) TMI 235 - AT - Central Excise

Summary

Issues:
1. Department's appeal against refund claims sanctioned by lower appellate authority.
2. Validity of show-cause notices issued by the department in March/May 2004.
3. Interpretation of Sections 11A and 35E of the Central Excise Act in relation to refund claims.

Analysis:
1. The department appealed against the sanction of two refund claims by the lower appellate authority. The Commissioner (Appeals) had initially held the refund claims admissible subject to Section 11B of the Central Excise Act. The Assistant Commissioner later rejected the claims based on unjust enrichment, but the Commissioner (Appeals) allowed the appeal, leading to the refund of over Rs. 4.3 lakhs to the assessee. The department accepted these orders. Subsequently, show-cause notices were issued in 2004 alleging errors in the refunds due to time-bar, but the Commissioner (Appeals) set aside the demand, making the assessee eligible for a refund again. The department contended that the notices were valid under Section 11A, independent of Section 35E, citing relevant case law.

2. The department argued that they could demand the duty erroneously refunded despite earlier orders. The learned SDR relied on Supreme Court judgments to support the department's position. The counsel for the respondents claimed the cited case law was not applicable. However, the Tribunal found that the department had acquiesced in the previous orders and had not challenged them in a timely manner, rendering the show-cause notices invalid. The Tribunal deemed the appeals frivolous and dismissed them.

3. The Tribunal analyzed the applicability of Section 11A and Section 35E in demanding duty already refunded. The department's reliance on case law regarding the Customs Act was found inapplicable to the present case. The Tribunal emphasized that the appellate authority's decision on the refund claims being non-time-barred was final and binding on the department, precluding them from demanding duty on the grounds of erroneous refund. Consequently, the demand raised by the Revenue was deemed unsustainable, and the orders of the Commissioner (Appeals) were upheld, resulting in the dismissal of the appeals.