1992 (12) TMI 54 - HC - Central Excise

Summary

Issues:
1. Jurisdiction of Assistant Collector to issue show cause notice for recovery of erroneously refunded duty.
2. Validity of show cause notice issued by Assistant Collector.
3. Applicability of Section 11A and 11B of the Central Excises and Salt Act, 1944.
4. Comparison with a Supreme Court decision regarding refund of duty and passing on the incidence of duty.

Analysis:
1. The Writ Petition questioned the jurisdiction of the Assistant Collector to issue a show cause notice for the recovery of duty that was erroneously refunded to the petitioner-company. The main argument raised was that since the refund had already been granted and finalized, the Assistant Collector had no authority to review the order. Additionally, the petitioner contended that the show cause notice was time-barred.

2. The show cause notice was issued by the Assistant Collector under the provisions of Section 11A and 11B of the Central Excises and Salt Act, 1944. These sections empower the Central Excise Authorities to recover duty that was erroneously refunded. The notice alleged that the petitioner had not passed on the duty incidence to the customers, justifying the recovery of the refunded amount.

3. The Court referred to a Supreme Court decision in Union of India v. Jain Spinners Limited, which highlighted the obligation of the Assistant Collector to ensure that the claimant had not passed on the duty incidence to any other person before granting a refund. The Supreme Court emphasized that manufacturers must demonstrate that they have not transferred the duty burden to others to be eligible for a refund.

4. Although the Supreme Court case involved a pending refund application, the Court in the present judgment emphasized that Section 11A and 11B of the Act provide the authorities with the jurisdiction to recover allegedly erroneously refunded duty. The burden of proof lies with the manufacturer to establish that the refund was not erroneous. The Court dismissed the Writ Petition, stating that the petitioner could raise their objections before the Assistant Collector for consideration and appropriate action.