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TMI Blog2010 (2) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... case of M/s. Sangam Processors (Bhilwara) Ltd. v. Collector, reported in 1994 (71) E.L.T. 989 (Tribunal). Tribunal had held that refund of excess duty to the assessee would entail unjust enrichment even if the same is passed on to the buyer through credit notes after clearance of the excisable goods. 2. The facts of the case are that the appellants had paid excess service tax to the tune of Rs. 4,48,188/- during the period January 1997 to December 1997 and claimed refund. Under Order-in-Original No. 90/98 dated 22-10-1998, the Assistant Commissioner rejected the claim on the ground of limitation and held that the refund would not entail unjust enrichment. This order was upheld by the Commissioner (Appeals) vide Order-in-Appeal No. 294/2002 dated 13-5-2002. On appeal, the Tribunal allowed the assessee's appeal by remand vide Final Order No. 840/2003, dated 25-6-2003 [2006 (1) S.T.R. 147 (Tri. - Bang.)}. In de novo proceedings, the Assistant Commissioner again found the refund claim to be hit by limitation but held that the question of unjust enrichment did not arise. Vide Order-in-Appeal No. 137/2004 dated 30-7-2004, the Commissioner (Appeals) held that the refund claim had been f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment did not arise in the refund of the impugned amount and that the same was a second time payment of the service tax due. In the light of these findings, the impugned order wrongly held that the sanction of refund was errone ous on account of unjust enrichment. The authorities had relied on the decision of the Tribunal in the case of CCE v. Addison & Co. [1997 (93) E.L.T. 429 (T)] for ordering recovery of refund as having been made erroneously. The authorities relied on the said decision wrongly. 3.1. The Commissioner had passed the impugned order relying on decisions in cases of dissimilar facts compared to those of the instant case. In Order-in-Appeal No. 160/2002-CE passed by the Commissioner of Central Excise(Appeals), Bangalore in the case of Jindal Aluminium Ltd., the Tribunal had held that refund should be granted if credit note had been issued, relying on the decision of Madras High Court in the case of Addison & Go. v. CCE [2001 (129) E.L.T. 44 (Mad.)]. The instant case was similar to the one dealt with by Tribunal in Jindal Aluminium Ltd. (supra). In that case, the appellant also had issued credit notes to his clients for the excess service tax recovered. Since no appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tapur and others (1987 (32) E.L.T. 8 (S.C.) is cited to argue that quasi judicial authority cannot review its own order unless the power of review is expressly conferred by the statute. The judgment of the Apex Court in the case of VBC Industries Ltd. v. U.O.I [1999 (114) E.L.T. 378 (AP) affirmed by Apex Court in 2000 (120) E.L.T. A188 (S.C.) is cited to rely on its ratio that when the refund was sanctioned pursuant to a binding judgment of the court, the same was not a case of erroneous refund. A refund made pursuant to an appellate order could not be said to have been made erroneously as held by Madras High Court in Madras Rubber Factory Ltd. v. Assistant Collector of Central Excise [1981 (8) E.L.T. 565 (Mad)]. 6. The learned Counsel submitted that the lower authority had relied on the judgment of the High Court of Bombay in the case of Indian Dyestuff industries Ltd. v. Union of India [2003 (161) E.L.T. 12 (Bom.)J in passing the order in question. The case dealt with by the High Court is distinguishable. Though the disputed refund in that case had been granted subject to the condition that the appellants would pay back the same if the judgment of the Apex court in the case of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 49/DIVN.III/06-07 dated 29-12-2006. The Commissioner's (Appeals) order sustaining the said order of the original authority is under challenge. 9. The impugned order is assailed mainly on the ground that it sustained an order passed without following settled law. The original authority had become functus officio after passing the order sanctioning refund. He had no power to review his own order. In the absence of review proceedings and appeal under Section 35E of the Act, show cause notice could not have been issued under Section 11A of the Act to recover erroneous refund. The impugned order was contrary to several decisions of the Tribunal and violated judicial discipline. The order of the High Court of Mumbai in the case of Indian Dyestuff Industries Ltd.(supra) relied on by the lower authorities was distinguishable and wrong reliance was placed on the same. The order sanctioning refund was consistent that the ratio of the judgment of the High Court of Rajasthan in the case of Union of India v. A.K. Spintex Ltd. [2009 (234) E.L.T. 41 (Raj.)]. 9.1 1 find that the relevant provisions involved are of Section 73 of the Finance Act, 1944, the pertinent portions of which are repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined." The corresponding provisions in Section 11A of the Central Excise Act are pari materia. Therefore both the parties have relied on case laws on the provisions of Section 11A. 9.2 The impugned order was passed relying on the following decisions:- (i) Bharat Box Factory Ltd v. Commissioner of C. Ex., Ludhiana [2005 (183) E,L.T. 461 (Tri. - Del)] (ii) Orissa Cement Ltd. v. Collector of Central Excise, Bhubaneswar [1996 (81) E.L.T. 154 (Tribunal)] (iii) Re-rolling Mills v. Collector of C. Lx. [ (43) E.L.T. 115 (Tribunal)] I find that in the decisions relied on by the Commissioner (Appeals) it was held that section 11A could be invoked to recover amounts erroneously refunded without initiating proceedings under Section 35E of the Act. In the case of Bhararat Box Factory Ltd (supra), the Tribunal had held as follows:- "5. Regarding issue of unjust enrichment, there is no dispute that the appellants had passed on the duty incidence to the customers at the time of clearance of the goods. Therefore, the principle of unjust enrichment will be applicable and appellants are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by invoking Section 11A of the Central Excise Act. In Orissa Cement Ltd. (supra) case the Tribunal held similarly. It was held that it was not necessary to have the re fund sanction order reviewed under Section 35E first before issue of demand under Section 11A for recovery of erroneous refund. In the above order the Tribunal has held as follows:- "7. A plea had been advanced in the appeals which was reiterated by Shri Bhowmik in the hearing that the refunds having been sanctioned by the Assistant Collector, the same could have been reopened only through an appeal filed before the Collector (Appeals) for setting aside the orders of the Assistant Collector and, without doing so, it was not permissible to issue a notice under Section 11A. Two decisions have been cited in support of this contention. These are - Akola Oil Industries Ltd. v. Collector of Central Excise (I) reported in 1991 (53) E.L.T. 136; and Shee Digvijay Cement Co. Ltd. v. Collector of Central Excise (II) reported in 1991 (52) E.L.T. 631. In the former case, it was held that Section 11A did not authorise the Collector to reopen, suo moto or otherwise, orders or decisions made or taken by officers subordinate to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A for recovering refunds erroneously granted with out that order being set aside by the Collector (Appeals). However, in the facts and circumstances of the case, we hold that there was no case for any recovery of the refunds made and the notices were also barred by limitation as no suppression, wilful misstatement or contravention of the provisions with intent to evade payment of duty is involved." In Indian Dyes tuff Industries Ltd. (supra) case, the Hon'ble Bombay High Court held as follow :- "15. The submissions of the Petitioners that when the refund was granted as a consequential relief by accepting the order-in-original dated 11-9-1984, it was not open to the Revenue to resort to Section 11A of the said Act and purport to recover the amount refunded on the ground that the amount was erroneously refunded and that if at all the revenue was aggrieved by the order-in-original, the proper course open to the revenue was to file an appeal u/s. 35 of the said Act and that having accepted the order-in-original dated 11-9-1984, it was not open for the revenue to invoice jurisdiction u/s. 11A of the said Act have no merit, because, before invoking the jurisdiction u/s. 11A of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scope of Section 11A of the said Act empowering the revenue to initiate proceedings to recover the amount of duty erroneously refunded. Secondly, as stated hereinabove, for invoking jurisdiction under Section 11A, there need not be adjudication order or appellate order as the case may be and Section 11A is an independent substantive provision. Thirdly, even on merits, the said decision is distinguish able. In the case before the Apex Court, the adjudicating authority had classified the goods manufactured therein as falling under Tariff Item No. 22B and the refund claim was filed on the basis that the goods are classifiable under T.I. 22A. Therefore, the issue before the Apex Court was having accepted the classification under Tariff Item No. 22B as held in the adjudication order was it open to the assessee to claim refund by contending that the goods are classifiable under Tariff Item 22A. in that context, the Apex Court held that without filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority by filing a re fund claim. Therefore, the aforesaid decision of the Apex Court does not support the contention of the Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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