2017 (10) TMI 734 - AT - Central Excise

Refund claim - jurisdiction - Whether the Show Cause Notice dated 03/11/2001 and the subsequent proceedings are in the teeth of the ruling of Hon ble Supreme Court in the case of Mafatlal Industries Limited Versus Union of India 1996 (12) TMI 50 - SUPREME COURT OF INDIA ? - Held that - the SCN is wholly without jurisdiction and is an abuse of the process of the law. Further, there is no appeal filed by the Revenue against finalization of the assessment order dated 19/07/2000. Further, there has been no appeal filed by the Revenue against the order granting refund dated 06/11/2000. In this view of the matter, the Show Cause Notice is void-ab-initio. - the SCN and the subsequent orders impugned herein are void-ab-initio and in the teeth of the ruling of Hon ble Supreme Court in the case of Mafatlal Industries Limited Versus Union of India, wherein the Apex Court has held that The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that when the duty leviable on the goods is assessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short or in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be. Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as the case may be. Whether the provisions of unjust enrichment introduced in the scheme of provisional assessment with effect from 25th June, 1999 by Notification No. 45/1999 CE have retrospective effect? - Held that - the issue of unjust enrichment is concerned have been introduced in the provisional assessment scheme with effect from 25th June, 1999 and the same is not retrospective. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Jurisdiction of the Show Cause Notice dated 03/11/2001 in light of the ruling of Hon'ble Supreme Court in the case of Mafatlal Industries Limited Versus Union of India.
2. Whether the provisions of unjust enrichment introduced in the scheme of provisional assessment with effect from 25th June, 1999 by Notification No.45/1999 CE have retrospective effect.

Analysis:

Issue 1: Jurisdiction of the Show Cause Notice
The appeal was initially dismissed for default due to non-appearance of the appellant, as the notice was returned un-delivered. However, it was later found that the appellant had informed the Tribunal about the change in address, and the appeal was restored. The appellant, engaged in the manufacture of Black & White Picture Tubes, was under provisional assessment scheme. The provisional assessments were finalized, and the appellant filed a refund claim which was allowed after scrutiny. Subsequently, a Show Cause Notice dated 03/11/2001 was issued, questioning the earlier assessment and seeking recovery under Section 11A(1) of the Act. The Tribunal found that the Show Cause Notice and subsequent orders were void-ab-initio, as they were against the ruling of the Hon'ble Supreme Court in the case of Mafatlal Industries Limited Versus Union of India. The Notice was deemed without jurisdiction, an abuse of process of law, and set aside.

Issue 2: Retrospective Effect of Unjust Enrichment Provisions
The Tribunal further analyzed the issue of unjust enrichment introduced in the provisional assessment scheme from 25th June 1999. It was established that the provisions of unjust enrichment were not retrospective. The Tribunal highlighted that there was no appeal filed by the Revenue against the finalization of the assessment order or the order granting refund. As a result, the Show Cause Notice was considered void-ab-initio, and the impugned orders were set aside. The appellant was entitled to consequential benefits, including refund of the pre-deposit made during the appeal's pendency, with interest as per rules.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT ALLAHABAD highlights the issues surrounding the Show Cause Notice and the retrospective effect of the unjust enrichment provisions in the scheme of provisional assessment. The Tribunal's decision, based on legal principles and precedents, provides clarity on the jurisdictional aspects and the application of relevant legal provisions in the case at hand.