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2004 (12) TMI 169 - AT - Central ExciseRecovery of erroneous refund - Unjust enrichment - whether the adjudicating authority, after having sanctioned the refund, and before the refund is made to the appellants, can re-open the issue by issue of Show Cause Notice u/s 11A - HELD THAT - We find that in the present case, the Assistant Commissioner, by OIO, sanctioned the refund. There was no payment made. Therefore, such an order was required to have been reviewed by the Commissioner in terms of Section 35E of the Act. Where, in a circumstance, when erroneous refund has been made then the procedure to be adopted is to initiate proceedings for recovery of the erroneous refund in terms of Section 11A of the Act as held by the Larger Bench in the case of Best Crompton Engg. Ltd. 2000 (9) TMI 91 - CEGAT, NEW DELHI . In the present case, the same Assistant Commissioner has issued a Show Cause Notice u/s 11A and passed the OIO which is impugned, without filing a review u/s 35E of the Act. Therefore, the issue is covered by the judgment rendered by the Tribunal in the case of Polymer Allied Products v. CCE 1991 (7) TMI 217 - CEGAT, NEW DELHI , which has been affirmed by the Apex Court 1992 (8) TMI 307 - SC ORDER . The authority can start the initial proceedings u/s 11A of the Act only if the erroneous refund has been made. No such refund has been made in the present case. Therefore, OIO earlier passed by the Assistant Commissioner is required to have been reviewed and appeal filed before the Commissioner (Appeals) which has not been done and, therefore, the proceedings initiated by the same authority u/s 11A without resorting to review proceedings is not correct in law. In so far as the second issue is concerned, we find that the assessments were of provisional and, therefore, the question of holding that the principles of unjust enrichment are attracted does not arise in view of the Apex Court judgment rendered in the case of Hindustan Metal Pressing Works v. CCE 2003 (2) TMI 67 - SUPREME COURT and CCE, v. Allied Photographics India Ltd. 1992 (8) TMI 307 - SC ORDER . Thus, the impugned order arising from are required to be set aside and appeals allowed with consequential relief if any.
Issues involved: Appeals arising from OIA No. 332/2002-C.E., dated 24-5-2002; whether the adjudicating authority can re-open the issue after sanctioning the refund; whether the refund is affected by unjust enrichment due to provisional assessments.
Issue 1 - Re-opening of Refund Issue: The learned Counsel argued that once the order of refund is passed, the authority cannot review it before the refund is granted, citing relevant case law. The Tribunal's decision in Polymer & Allied Products v. CCE was referenced, affirmed by the Apex Court, emphasizing that the Assistant Commissioner lacks the power to review his own order. The Tribunal further held that if an erroneous refund is made, proceedings under Section 11A should be initiated. The SDR, however, relied on the Larger Bench judgment in Best & Crompton Engg. Ltd. v. CCE, Chennai, stating that recovery for erroneous refund must be under Section 11A. Issue 2 - Unjust Enrichment in Provisional Assessments: The Tribunal noted that in the present case, the Assistant Commissioner sanctioned the refund without any payment made, necessitating a review under Section 35E of the Act. The Tribunal cited the Larger Bench decision in Best & Crompton Engg. Ltd., stating that erroneous refunds should be recovered under Section 11A. The Tribunal found that the Assistant Commissioner's actions were not in accordance with the law, as per the judgments in Polymer & Allied Products and other relevant cases. The Apex Court's ruling in Hindustan Metal Pressing Works v. CCE was also cited to support the position that unjust enrichment principles do not apply to provisional assessments. The Tribunal concluded that the impugned orders were required to be set aside, and the appeals allowed with consequential relief, if any.
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