2018 (6) TMI 246 - AT - Central Excise

Recovery of erroneous refund made - refund claimed in respect of freight beyond the place of removal on which the appellant has paid duty - Section 11A of the CEA 1944 - case of the appellant is that appellant s claim has already been sanctioned and the same has not been challenged before the higher forum and therefore, the refund sanctioned by them has become final and the provisions of Section 11A are not applicable - Held that - The issue has been examined by the Hon ble High Court of Gauhati in the case of Jellalpore Tea Estate 2011 (3) TMI 11 - GAUHATI HIGH COURT , where it was held that Section 11A of the Act not applicable since the issue raised did not concern any approval, acceptance or assessment relating to the rate of duty on or valuation of any excisable goods. Until and unless it is challenged, the provisions of Section 11A of the Act are not applicable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Erroneous refund of amount on account of freight beyond the place of removal.
2. Applicability of Section 11A of the Central Excise Act, 1944.
3. Entitlement to claim refund of duty paid beyond the place of removal.

Analysis:

Issue 1: Erroneous refund of amount on account of freight beyond the place of removal
The appellant appealed against the demand raised under Section 11A of the Central Excise Act for an erroneous refund of amount on account of freight beyond the place of removal. The appellant had paid duty and claimed a refund under Notification No. 52/2002-CE dated 14.11.2002. The appellant argued that the refund claim had already been sanctioned and not appealed against, citing a precedent in the case of Bharat Box Factory Limited. However, the respondent relied on a different Tribunal decision in the case of J&K Pigments Pvt. Limited, stating that the appellant was not entitled to claim a refund of duty paid beyond the place of removal.

Issue 2: Applicability of Section 11A of the Central Excise Act
The Tribunal examined whether the provisions of Section 11A of the Act were applicable in the case at hand, considering that the appellant's refund claim had already been sanctioned and not challenged before a higher forum. The Tribunal referenced a decision by the Hon'ble High Court of Gauhati in the case of Jellalpore Tea Estate, which emphasized that the Revenue could not initiate collateral proceedings to set aside an order when a statutory remedy was available. The Tribunal concluded that the provisions of Section 11A were not applicable in this scenario, as the issue did not concern approval, acceptance, or assessment of duty rates or valuation of excisable goods.

Issue 3: Entitlement to claim refund of duty paid beyond the place of removal
The Tribunal further considered whether the appellant was entitled to claim a refund of duty paid beyond the place of removal. After hearing both parties and reviewing the submissions, the Tribunal reiterated the decision of the Hon'ble High Court of Gauhati in the case of Jellalpore Tea Estate, stating that until an assessment order of refund claims was challenged, the provisions of Section 11A were not applicable. Therefore, the Tribunal set aside the impugned order and allowed the appeal, holding that the demands against the assessee were not sustainable in this case.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the importance of challenging assessment orders before invoking Section 11A of the Act and highlighting the precedents set by the Hon'ble High Court of Gauhati in similar cases.