1999 (6) TMI 124 - AT - Central Excise

Summary

Issues:
- Sanction and payment of five refunds by the Assistant Collector
- Legal remedial steps taken by the department under law
- Appeals filed by Revenue under Section 35E before the jurisdictional Commissioner (Appeals)
- Show cause notices issued under Section 11A for recovery of erroneously granted refunds
- Order-in-Appeal passed by the Commissioner (Appeals) setting aside the refund orders
- Legal correctness of directing repayment of refunded amounts under Section 35E
- Need for remand to consider parallel proceedings under Section 11A
- Applicability of legal precedents regarding recovery of erroneously refunded sums

Analysis:

The judgment concerns the sanction and payment of five refunds by the Assistant Collector to manufacturers of Fuel Injection Pumps and parts falling under Heading 84.13 for the period from 19-11-1986 to 31-3-1988. The department took legal remedial steps, including filing appeals under Section 35E before the Commissioner (Appeals) and issuing show cause notices under Section 11A for recovery of erroneously granted refunds. The Commissioner (Appeals) set aside the refund orders and allowed the appeals of the Revenue, directing the appellants to repay the refunded amounts. However, the legal correctness of this direction under Section 35E was challenged based on established legal principles.

The appellant's advocate argued that directing repayment of refunded amounts can only be done through a demand raised under Section 11A, citing various legal precedents. The Departmental Representative acknowledged this legal position and suggested that the matter should have been considered along with parallel proceedings under Section 11A. The Tribunal concurred with the advocate's submissions, emphasizing that recovery of erroneously refunded sums can only be pursued through Section 11A, not Section 35E. Therefore, the Tribunal set aside the Order-in-Appeal and remanded the matter to the Commissioner (Appeals) for reconsideration along with the appeal against the Order-in-Original issued on the show cause notice under Section 11A, to ensure a comprehensive and just decision.

In conclusion, the judgment highlighted the necessity of following established legal procedures for recovering erroneously granted refunds and emphasized the importance of considering parallel proceedings to ensure a fair and consistent outcome. The Tribunal's decision to remand the matter for a comprehensive review by the Commissioner (Appeals) reflects a commitment to upholding legal principles and ensuring procedural fairness in such cases.