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TMI Blog2000 (5) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 528/1197 dated 18-11-1997 prima facie the Bench holding that the appellants have made out a very strong case in their favour. Para 6 of the order is reproduced herein below: 6. We have considered the submissions made before us. It is now seen that the appellants have already been given the refund amount of Rs. 2,50,37,145. This is against the claim of Rs. 3,26,78,535 as per the BE No. 30675 dated 8-9-1992. The letters which are produced before us dated 9-6-1993 and 1-10-1993 prima facie show that this refund application was received on 5-3-1993. On a perusal of the stamps on it, prima facie the first endorsement of the appraising (Main) seems to have been put in the first instance. Thereafter only the other two stamps were affixed. This is the result of the prima facie examination of the documents before us. However, this will be subject to expert opinion if any or which may be asked or produced at the time of final hearing of the appeal itself. Therefore, there is prima facie evidence available on record to show the receipt of the application on 5-3-1993 and more particularly in view of tlie pre-audit and post-audit of the refund. Money has also been paid to the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that they had not placed any order nor had they imported accessories and spares. Therefore, they subsequently placed orders for supply of accessories and spares for the said Plants from the suppliers. At the time of clearance of the said spares under the three impugned Bills of Entry, the proper officer denied them the concessional rate of duty under the said Notification available under the said scheme and assessed the imported goods on higher rate of customs duty. The said assessment was made by the proper officer upon direction of the SIB, Madras who gave specific direction to the concerned group to treat the imported goods as spare parts and not accessories. The appellants, therefore, paid excess duty of Rs. 2,50,37,145/- on 1-10-1992 in view of the urgent need for the use in the plants and machinery. While doing so, they had sent a letter of protest dated 12-9-1992 to the Assistant Collector (SIB) Customs House, Madras indicating clearly to him that there is an urgent need to clear the goods to meet the export shipment dead line and therefore, they are paying duty at the rate assessed by him under protest. The said letter is extracted herein below : Subject : Import of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit availed from the additional duty of customs paid and now claim covered by the refund claim Not applicable 8. Ground of claim Import covered under EPCG Import Licence No. P/CG/2128959/SWP/21 CG/91 dt. 13-12-91 which was of by Customs. 9. Enclosures (No. of sheets should be specified against each claim). Importer s Purchase (a) Order-GD/1012/ HO/200 dt. 6-6-1991 (26 Pages). Supplier s Invoice - (b) A53-8007 dt. 8-6-1992 (2 Pages). Supplier s Invoice - A53-8009 dt. 8-6-1992 (2 Pages) Triplicate copy of Bill of (c) Entry 30675 dated 8-9-1992 Working (d) sheet for difference in duty 10. Any further details that are deemed necessary and relevant to the claim. Shall be furnished as and when required. 11. Indicate whether personal hearing is required or not Yes required DECLARATION I, Yogesh Bakshi, the applicant representing the Importer M/s. Ballarpur Industries Limited, do hereby declare that what is stated above is true to best of my information and belief. I also declare (a) that the excess duty paid and claimed now for refund has been passed/has not been passed on to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector in terms of Section 128 of the Customs Act, 1962. However, Collector of Customs under Section 129D(2) of the Customs Act, 1962 called for examination of the proceedings of the Assistant Collector and filed review petition before the Collector (Appeals) for determining the points raised by him against the order in original of the Assistant Collector under the provisions of Section 28. 6. Ground raised by the Collector before the Collector (Appeals) were that duty had not been paid under protest in terms of the Bills of Entry as there was no endorsement to that effect. As per the procedure for payment of duty under protest, the importers before payment of duty had to seek permission from the Assistant Collector to pay duty under protest giving the reasons thereon. It is stated that the Assistant Collector after examination of the requests for protest permits the protest to be registered. The protest is registered in the register maintained for the purpose in the refund section of the Customs House and a serial number is allotted and the Bill of Entry is endorsed with the rubber stamp indicating that the protest has been registered under serial No. corresponding to the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected by the Collector (Appeals) came to the conclusion of forgery and held the claims to be time barred. These findings are contested as the appellants challenge the findings of the Collector (Appeals) of forgery in putting the seal of 5-3-1993, without disclosing as to how the forgery was committed and without disclosing who had connived with the appellants in committing the forgery and manipulating both the stamps of Appraising refund section over and above the stamp of the Appraising main. The appellants contend that the findings of manipulation with mala fide intention by tampering and forgery were never alleged or stated in the reference claim and the various findings arrived at on that basis is on Collector (Appeals) own enquiry which is not provided in law and the procedure adopted in examining and recording evidence of Dy. Collector CB Durgaiya is challenged in this appeal. The procedure adopted by the Collector in straightaway filing the reference application under Section 129D without raising these questions by issue of show cause notice under Section 28 of the Customs Act, 1962 for recovery of erroneous refund is under serious challenge. 8. It is the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Customs on the refund claim is without bringing out the facts leading to forgery or manipulation. Their further contention is that the protest letter referred to above was never taken into consideration including the two letters received from the Customs House acknowledging the refund claim as having been filed on 5-3-1993 which are referred to above. They contend that they had lodged protest under Section 27 of the Customs Act. There is no procedure prescribed for lodging protest and the Collector (Appeals) reliance upon Public Notice for filing protest letter is not m terms of the law. As regards payment of duty made under protest they relied upon the following judgments wherein such letters were accepted as letters of protest: - (a) Executive Engineer Workshop Division, MP Electricity Board v. CCE as reported 1997 (94) E.L.T. 445 (S.C.) (b) Mafatlal Industries v. UOI - 1997 (89) E.L.T. 247 (S.C.) (c) India Pistons v. CCE - 1990 (46) E.L.T. 3 (S.C.) (d) India Cements v. CCE - 1989 (41) (E.L.T.) 358 (S.C.) (e) Roche Products v. UOI - 1991 (51) E.L.T. 238 (Bombay) (f) Jay Chemical Industries v. CCE - 1997 (93) E.L.T. 698. (g) LML Ltd - 1993 (66) E.L.T. 652 (h) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is of no consequence so long as the application has been filed within time. They referred to the subsequent acknowledgment dated 9-6-1993 received from the department admitting the application dated 5-3-1993 for refund. They also referred to another letter dated 1-10-1993 from the Assistant Commissioner acknowledging their claim on 5-3-1993. Therefore, the review petition stating that refund claim was not filed on 5-3-1993 but on subsequent date is totally incorrect. 10. We have heard Shri M. Venkataraman, Learned Counsel for the appellants and Shri Madanagopal Sr Central Govt. Standing Counsel for the Revenue. 11. The Learned Counsel for the appellants relied upon the citations and the grounds stated above and sought for allowing the appeal in terms of the submissions noted. The Learned Counsel for the department filed his written submissions by which he contended that the department has also filed criminal case which is pending in the competent criminal court. It is submitted that till such time the criminal proceedings are completed the present appeal is required to be stayed. The following judgments are relied upon : (a) CCE v. Ferro Alloys as in 1992 (59) E.L.T. 633. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the claim in the said order in original. He sanctioned refund claim of the excess customs duty collected on the remaining accessories for which C F value was Rs. 1,86,35,996 under BE No. 30675 dated 8-9-1992. This amount was directed to be debited in the EPCG import licence No. P/CG/2128959. However, by the same order he rejected their claim for treating as accessories items of accessories for C F of Rs. 18,74,670.00. The procedure laid down under law is that when erroneous refunds has been paid, the department is required to take up investigation and issue show cause notice within six months from the date of payment making out grounds for re-calling the amount in terms of Section 28 of the Customs Act, 1962 which is reproduced herein below : When any duty has been levied or has been short-levied or erroneously refunded or when any interest payable has not been paid, part paid or erroneously refunded, the proper officer may : (a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital within one year; (b) in any other case, within six months. 13. A perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any ingredients of the provisions of Section 28 i.e. fact of erroneous refund by reason of collusion or any wilful misstatement or suppression by the importer or exporter or agent or employee of the importer or exporter. The parties will have to be given sufficient opportunity to reply and controvert or rebut to the detailed investigation or evidence relied upon in the show cause notice that would be issued under Section 28 for recovery of erroneous refund. In the present case, the Collector of Customs had only doubt in the form of certain suspicion in questioning the legality and propriety of the Assistant Collector in granting refund. In the authorisation letter in terms of Section 129D(4) the Collector of Customs has merely directed the AC of Customs, Review Cell, Customs House, Madras to file appeal on his behalf before the Collector (Appeals), Madras. It is our considered opinion that Collector of Customs was not justified in exercising the power vested in him under Section 129D(4) to direct the Assistant Collector to file appeal, as Section 129 cannot be invoked in such circumstances. 15. The Collector has also not determined the points required for determination arisin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as only stated the manner in which his understanding arose in respect of the refund claim processed. He has not unravelled the mystery about the genuineness of the seal or why it was received on 5-3-1993 and did not process it to the CPU Section before 15-4-1993 as no inward register is maintained. These are administrative matters or administrative lapses for which appellants cannot be blamed. So long as the seal on the refund application is genuine and that has not been challenged in the reference application filed by the Collector of Customs, before the Collector (Appeals), it cannot be held that there was a forgery committed by the appellants as held by Collector (Appeals). Pleas raised by the appellants that the proceedings are not sustainable under Section 129D is fully justified in terms of citations referred to. 16. The points or grounds raised by Assistant Collector has not been perused by the Collector of Customs and it cannot be said that the Collector of Customs had applied his mind to the conclusion that adjudication order is not proper and legal on the grounds subsequently raised by the Assistant Commissioner while filing the same before the Commissioner (Appeals). T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is is Section 11A. It provides that (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded a Central Excise Officer, may within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. This is the fundamental and only authority in the law that permits the Central Excise Department to recover erroneously refunded duty; if any duty is refunded, and it is discovered that the refund was an error, the only procedure for recovering that duty is under Section 11A. The procedure in the section prescribes a notice; to be issued to the person chargeable with the duty calling upon him to show cause why he should not pay the amount specified in the notice; the Assistant Collector, after considering the representation, will determine the amount of duty due from such person and, thereupon, such person shall pay the amount so determined; it is also prohibited in the law to recover any mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... barred by limitation under Section 11-A, to say nothing of the fact that it is almost inconceivable that any notice issued by the Collector (Appeals) under Section 35-E, as he did in this case, could ever reach the assessee in time. All of them would be out of time and illegal. To argue that, because Section 35-E allows this procedure of application and determination by the Collector (Appeals), the department can recover such duties, is to enlarge the powes of the department in a way that sets Section 11-A at naught. It defeats the right process laid out in the Act. 10. The proper route of the right process laid out in the Act is only the one written in Section 11-A. This section prominently gives leave to the Assistant Collector to issue notices if any money representing duty is found to have been lost by mistaken refund. There is no other course for the authorities to the recovery of such duty. 11. I can see an objection coming forward to this, that the Assistant Collector would be seeking to review his own order if he seeks to recover erroneously refunded duty. After all, Section 11-B allows only the Assistant Collector to make refunds and, therefore, when he himself issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order requiring a person to pay any duty which he (Collector) may discover, during the appeal proceedings before him, has been short levied or erroneously refunded, unless a notice of demand to pay is issued to that person within the time-limit of 11-A. The time-limit of Section 11-A runs on a tight Schedule - its starting point to its finishing post is rigidly controlled. It must set out from the relevant date - no other date is permissible, whether it runs for six months or for five years. The time-limit specified in Section 11-A is not six months: it is six months from the relevant date . A time-limit counted any other way would not be a time-limit specified in section 11-A . 16. May be we have here a stand-off; a stalemate; and I can see no way round it. 17. However, as no notice was given to M/s. Universal Radiators within the time-limit specified in Section 11-A of the Central Excises and Salt Act, the refund said to have been erroneously made to them cannot be recovered. The same view reiterated in the case of Re-Rolling Mills v. CCE as reported in 1989 (43) E.L.T. in paras 5 to 9 which are extracted herein below: 5. It may be true that the appeal was filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the application should be filed. Filing of the appeal or the application within five years does not safeguard the demand from the time bar if a time bar has arisen and an order passed by the Appellate Collector under Section 35E cannot have the effect of nullifying Section 11A and its time limit. 7. The time limit of Section 11A governs the issue of the demand under that section and that section alone. It follows if no demand has been issued in accordance with Section 11A nothing can take its place. There is no evidence on record that demands were issued for the erroneously refunded money within the time limit prescribed by Section 11A. Therefore, the order of the Appellate Collector dated 22-9-1983 on the application of the Assistant Collector is invalid and can not serve as a means for recovering the money. 8. The department should have issued a demand under Section 11A and if they thought wilful misstatement, suppression and fraud had caused the refund to be made erroneously on 12-10-1981, they should have issued a notice within the five-year time limit permitted by Section 11A for such cases. If there was such suppression, there was time till October, 1986, for the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) having further period to allow another 3 months. Independently, the Collector can invoke Section 129D where a period of one year is available to the Collector to appeal to the Tribunal. Under Sections 128 and 129D, the legislature has not restricted to any particular subject. It has given wide power to the Collector under Section 129D to call for and examine any decision or order passed by his subordinate adjudicating authority. But the provisions of Section 28 of the Act which restricts to only two matters pertaining to non-levy, short-levy and erroneous refund. However, the Collector has even more powers under the proviso to Section 28 to extend the recovery for five years under the stated conditions. Therefore, it can be safely presumed that the legislature has made an independent provision for non-levy, short-levy and for erroneous refund under Section 28 of the Act and the provisions granted under Section 28 should be independently restricted to this section alone. The limitation under Section 128 and Section 129D has to be held to be independent of Section 28 of the Act. The reason for so excluding provision of Section 28 from the ambit of Section 128 and 129D of the Act ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice is not issued under Section 28 of the Customs Act, in absence of provisional assessment, within the stipulated time, then any demand raised would not be enforceable. The Supreme Court in the case of Gokak Patel Volkart Ltd. v. Collector of Central Excise, Belgaum [1987 (28) E.L.T. 53 (S.C.)] while examining the provisions of Section 11A of the Central Excises and Salt Act, observed in para 9 as follows - No notice seems to have been issued in this case in regard to the period in question. Instead thereof an outright demand had been served. The provisions of Section 11A(1) and (2) make it clear that the statutory scheme is that in the situations covered by the sub-section (1), a notice of show cause has to be issued and sub-section (2) requires that the cause shown by way of representation has to be considered by the prescribed authority and then only the amount has to be determined. The scheme is in consonance with the rules of natural justice. An opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made before making the order thereof. Notice is thus a condition precedent to a demand under sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the Act. The proper route of the right process laid out in the Act is only the one written in Section 11A. This section prominently gives leave to the Assistant Collector to issue notices if any money representing duty is found to have been lost by mistaken refund. There is no other course for the authorities to the recovery of such duty. 20. In this case, the Department has not reopened the assessment under Section 28 nor filed an appeal after final assessment under Section 128 of the Customs Act, therefore, the Department cannot resort to Section 129D of the Act by preferring the review after the period of expiry as stipulated under Sections 28 and 128 of the Customs Act. The provisions of Customs Act being analogous to the Central Excises and Salt Act and the law having been clearly stated by the highest court and the Tribunal as noted above, therefore, the same analogy would apply with the provisions of Customs Act also. In view of this, it has to be held that Section 28 of the Customs Act is independent of Section 129D of the Customs Act and the Revenue cannot take advantage of the limitation available under Section 129D of the Act on failure to comply with the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his is also supported by the Assistant Collector (Appg. Refund Section dated 1-10-1993 calling upon the appellants to produce documents in which the claim has been referred to as 5-3-1993. The further letter dated 9-6-1993 of the AC (Refund) also referred lo this claim application dated 5-3-1993. In this view of the matter, and after going through the evidence, the pleas raised by the appellants that they had claimed the refund within the stipulated time of six months from the date of payment of duty in terms of Section 27 of the Customs Act, 1962 is required to be upheld. Further we notice that duty had been paid under protest in terms of letter 12-9-1992 addressed to the Assistant Collector, SIB, Customs House, Madras. There is no challenge to this letter having not been filed and the circumstances leading to the payment which clearly indicates that there was no willingness on the part of the appellants-importer to pay duty voluntarily as they were fully aware that the goods were exempted and they were paying duty under constraints and hence letter of protest was lodged by him on 12-9-1992 which has to be accepted as payment made under protest. Appellants plea that the payment h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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