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2011 (12) TMI 175 - HC - Central ExciseNon- requirement of show-cause notice before recovery of excise duty refunds u/s 154 of the Finance Act, 2003 - Section 154 of the Finance Act,2003, retrospectively withdrew the exemption granted u/s 5-A of the Central Excise Act, 1944 - manufacturer of Pan Masala assessee contending validity of order issued for recovery of the amount of exemption availed by the assessee - Held that - The correctness and validity of the said order has already been presented before this Court and it was held that absence of show cause notice u/s 11A did not affect the validity of the order dated 6.6.2003. The said judgment has admittedly become final and the finding recorded therein is res- judicata. The same, therefore, cannot be allowed to be re-agitated. No argument whatsoever has been raised by assessee on the issue of interest. - Decided against the assessee.
Issues Involved:
1. Requirement of Show Cause Notice before recovery of excise duty refunds under Section 154 of the Finance Act, 2003. 2. Binding nature of the R.C. Tabacco case on the CESTAT. 3. Scope of Section 154 of the Finance Act, 2003 in validating actions for recovery of excise duty refunds. 4. Applicability of Section 154(3) of the Finance Act, 2003 to appeals and proceedings. 5. Levy of interest for periods of non-payment under a valid Order-in-Appeal. 6. Impact of subsequent notifications excluding the appellant from the purview of Section 154 of the Finance Act, 2003. 7. Treatment of the appellant and similarly placed industries by subsequent notifications. Detailed Analysis: 1. Requirement of Show Cause Notice: The appellant contended that a Show Cause Notice is mandatory under Section 11A of the Central Excise Act, 1944, before recovering excise duty refunds. The High Court, however, upheld the validity of the order dated 6.6.2003, stating that absence of a Show Cause Notice did not vitiate the order. The Court cited that the appellant had not demonstrated any prejudice caused by the lack of notice, referencing the principle that not mere violation of natural justice but actual prejudice must be shown. 2. Binding Nature of the R.C. Tabacco Case: The CESTAT rejected the appellant's contention by considering itself bound by the Supreme Court's decision in R.C. Tabacco, which held that Section 154(3) of the Finance Act, 2003, barred the maintenance of any suit or proceeding against actions taken under the said section. The High Court affirmed this view, noting that the issue had already been settled by the Supreme Court. 3. Scope of Section 154 of the Finance Act, 2003: The appellant argued that Section 154 could only validate actions taken prior to the passing of the Finance Act, 2003. The High Court dismissed this argument, stating that the retrospective withdrawal of exemptions and recovery actions were valid under Section 154, and the appellant's liability was upheld. 4. Applicability of Section 154(3) to Appeals and Proceedings: The appellant claimed that Section 154(3) did not apply to appeals or proceedings against actions taken under the section. The High Court, however, ruled that the provision barred such appeals, and the CESTAT correctly held that the appeal against the recovery order was not maintainable. 5. Levy of Interest: The appellant argued that interest should not be levied for periods when payment was not made due to a valid Order-in-Appeal. The High Court noted that the appellant did not raise any substantial argument regarding interest before the CESTAT, and thus, the issue was not considered. 6. Impact of Subsequent Notifications: The appellant contended that subsequent notifications excluded them from the purview of Section 154. The High Court found no merit in this argument, as the retrospective amendment by the Finance Act, 2003, was upheld, and the appellant's liability was confirmed. 7. Treatment of Similarly Placed Industries: The appellant argued that subsequent notifications treated them and other similar industries as a separate category, restoring benefits withdrawn by the earlier notification. The High Court dismissed this argument, affirming the retrospective withdrawal of exemptions and the appellant's liability. Conclusion: The High Court dismissed the appeal, upholding the validity of the order dated 6.6.2003, and confirmed the appellant's liability for the recovery of excise duty refunds and interest. The Court ruled that the issues raised by the appellant had already been settled by previous judgments, including the Supreme Court's decision in R.C. Tabacco, and the appellant's arguments were not accepted. The appeal was dismissed with no costs.
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