2018 (8) TMI 1580 - AT - Central Excise

Refund claim - as refund claims were sanctioned to the appellants, and without challenging those assessment orders of refund claims sanctioning thereof, can be challenged by way of issuance of show cause notice under Section 11A of the Act or not? Held that - The said issue is exempted by the Hon ble High Court of Gauhati in the case of Jellalpur Tea Estate 2011 (3) TMI 11 - GAUHATI HIGH COURT , wherein the Hon ble High Court has held that Revenue could not take recourse to Section 11A of the Act when it had a statutory remedy available to it to challenge the order dated 29.4.2002 passed by the Assistant Commissioner of Central Excise, Silchar by resorting to the revisional power available under Section 35-E of the Act. The provisions of Section 11A of the Act are not applicable to the facts of this case - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Challenge of show cause notice under Section 11A of the Act regarding refund claims sanctioned to the appellants without challenging those assessment orders.

Analysis:
The appellants were engaged in manufacturing Lead Alloys, Lead Ingots, Lead Oxide, Menthol Solutions, and Menthol, availing exemption under Notification No. 56/2002-CE. They cleared goods inclusive of outward freight charges and paid duty through PLA after exhausting Cenvat credit. The appellants sought re-credit for duty paid on freight charges, which was allowed for specific periods. Subsequently, show cause notices were issued to deny self-credit of duty paid on freight portion from the assessable value, leading to demands for erroneous refunds. The matter was adjudicated, and while the demand was confirmed, the extended period was not invoked. The appellants challenged this decision, arguing that the refund claims were rightly sanctioned, and without challenging them, show cause notices under Section 11A cannot be issued, citing a decision by the Hon'ble High Court of Gauhati. On the other hand, the Revenue contended that the appellants paid duty on transportation charges to avail inadmissible refunds, justifying the invokement of the extended period of limitation.

The Tribunal considered the submissions and focused on the key issue of whether refund claims sanctioned to the appellants could be challenged through show cause notices under Section 11A without contesting the assessment orders. Citing the decision of the Hon'ble High Court of Gauhati in a similar case, the Tribunal emphasized that statutory remedies must be availed as prescribed by law, and circumventing the process through Section 11A was impermissible. Therefore, the Tribunal held that the provisions of Section 11A were not applicable to the case at hand, rendering the demands against the appellants unsustainable. Consequently, the appeals filed by the appellants were allowed, providing relief in the matter.