2018 (5) TMI 1346 - AT - Central Excise

Recovery of excess refund allowed - Section 11A of Central Excise Act - Held that - without challenging the said refund claim in appeal, show cause notice cannot be issued under Section 11A of the Act - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, VERSUS M/S. JELLALPORE TEA ESTATE 2011 (3) TMI 11 - GAUHATI HIGH COURT - demand against assessee not sustainable - appeal allowed - decided in favor of assessee.

Summary

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

Analysis:
The case involved an appeal against an order where the assessee, engaged in manufacturing printed cartons, availed exemption benefits in Jammu & Kashmir. The dispute arose when a show cause notice was issued to deny self-credit of duty paid on freight charges from the assessable value, leading to an excess refund claim. The matter was adjudicated, with the demand for erroneous refund confirmed partially. The appellant contended that since the refund claims were sanctioned and not challenged, a show cause notice under Section 11A could not be issued, citing a precedent from the High Court of Gauhati. On the other hand, the revenue argued that the appellant deliberately paid duty on transportation charges to claim an inadmissible refund, justifying the invokement of the extended period of limitation.

The Tribunal considered the submissions and analyzed the issue of challenging refund claims sanctioned to the assessee without contesting the assessment orders. Citing the Gauhati High Court precedent, the Tribunal held that the provisions of Section 11AC were not applicable in the case, making the demands against the assessee unsustainable. Consequently, the appeal filed by the assessee was allowed, and the appeal filed by the Revenue was dismissed. The judgment highlighted the importance of following statutory remedies and prescribed legal procedures, emphasizing that actions must be taken as per the law or not at all.

In conclusion, the Tribunal's decision favored the assessee, emphasizing the significance of adhering to legal procedures and statutory remedies. The judgment provided clarity on the issue of challenging refund claims sanctioned to an assessee without contesting the assessment orders, citing relevant legal precedents to support the decision.