9911796707
TMI Blog2001 (7) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... this rate for the year 1985-86 but however, they filed a refund claim for Rs. 3.60 lakhs on 17-9-1986 for the duty paid during the period from 1-4-1985 to 7-1-1986. The party claimed the refund on the ground that they were entitled to the exemption under Notification No. 77/85. 3. The Asstt. Collector sanctioned the refund of the aforesaid amount on 2-7-1987 to the party. 4. Subsequently, the party filed another C.L. No. 1/86, dated 20-2-1986 in respect of the P.C.C. Poles classifying them under Sub-heading 6807.00 at the effective rate of duty of 12% ad valorem under Notification No. 96/86, dated 20-2-1986. This C.L. was also approved by the Asstt. Collector on 28-2-1986. Yet, another C.L. was filed on 15-9-1986 which was approved by the Asstt. Collector on 14-10-1986 applying the same rate of duty on the goods. In the subsequent C.L., the party did not claim the benefit of SSI Exemption under Notfn. No. 175/86-C.E., dated 1-3-1986 though prima facie they were eligible for the same and continued to pay the duty at full rates as applicable during the year 1986-87. 5. The party filed a refund claim for Rs. 6 lakhs on 14-4-1987 claiming the SSI exemption under Notfn. No. 175/8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-4-1987 claiming slab exemption of 5% ad valorem on first clearance of Rs. 75 lakhs and then 15% ad valorem on clearances exceeding this limit under Notfn. No. 175/86. This C.L. was approved by the Asstt. Collector on 2-9-1987. It is alleged that the party being a DGTD unit was not eligible for payment of partial rate of duty @ 5% ad valorem on first clearance of Rs. 75 lakhs with effect from 1-4-1987 upto 30-10-1987, as they were not fulfilling the conditions in para (4) of the notification and for the same reasons they were further not entitled for partial exemption from 30-10-1987 upto 27-12-1987, as the DGTD units were categorically excluded from the purview of the notification. It is stated that they obtained the SSI registration certificate on 30-12-1987 and became eligible for the Small Scale exemption only from this date. On these facts, it is alleged that the party suppressed the facts and defrauded the Govt. by evading payment of duty to the extent of Rs. 4,13,816.97 for the period from 1-4-1987 to 30-12-1987 in collusion with the Asstt. Collector. 8. Accordingly, the appellants were called upon to show cause why the amount of Rs. 9.60 lakhs erroneously refunded to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of exemption based on the turn-over in a financial year, the legal position was that the claim of refund, if any, had to be made in the normal period of six months of the payment of duty and not at the end of the financial year. The Asstt. Collector in sanctioning this refund claim did not record any reasons as to what motivated him to pass a claim which is apparently time-barred under the provisions of Section 11B. This refund claim is clearly made beyond the period of limitation and therefore, it is inadmissible and further, though the provisions relating to the unjust enrichment are incorporated in Section 11B much after the period under consideration, the same can be pressed into service within the period prescribed under Section 11A in respect of the erroneous refunds as held in the case of Smith, Klims Beechan Consumer Brands Ltd. v. Asstt. Collector of C.Ex. - 1993 (67) E.L.T. 469 (A.P.). Therefore, the refund is inadmissible on the ground of unjust enrichment also. 11. Similarly for the period from 1-4-1986 to 14-10-1986, the party filed C.L. dated 20-2-1986 effective from 28-2-1986 and C.L. dated 1-3-1986 effective from 15-9-1986 in which they did not claim ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmits that there is a clear evidence on record of the Asstt. Collector s collusion with the party and in sanctioning and paying the ineligible refund amounts to them and therefore, the extended period for the recovery of these amounts has rightly been invoked. He further submits that the concerned Asstt. Collector has also been charge-sheeted in this case (a copy of the charge sheet is filed) though he is not able to state about the fate of this charge-sheet. 13. The expression collusion is defined in the Osborn s concise Law Dictionary - 6th Edition (1976) page 79, the arrangement of two persons, apparently in a hostile position, on having conflicting interests to do some act in order to injure a third person or deceiving a Court. The Allahabad High Court in Indo-Allied Industries Ltd. v. Punjab National Bank Ltd. - AIR 1970 Allahabad 108 (at page 113) have also observed Collusion is a strong term. It had been defined as : A deceitful agreement .... between two or more persons ....... to some evil purpose such as to defraud a third person of his right . Collusion may be either apparent and patent, or, what is more common, secret and covered by an apparent show of honesty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgement of the Apex Court in the case of C.C., Madras Others v. D. Bhoormull - 1983 (13) E.L.T. 1546 (S.C) has observed that the charges of collusion are sustainable on the basis of preponderance of probability as collusion need not be proved with mathematical precision. We are therefore of the view that in light of the facts obtaining in the present case, refund amounts would never have been sanctioned, had the Asstt. Collector not colluded with the appellants and paid the amounts to them. The case laws relied upon by the ld. Counsel for the appellants cited supra are not on the same facts and in most of the cases either one of the alleged colluding party was not made part of the proceedings or there was no sufficient evidence to establish the same. In the present case, as we have already observed above, there is sufficient evidence against both the parties colluding with each other for sanctioning and obtaining the impugned refund amounts at the cost of the Revenue. There is also further evidence on record that the said Asstt. Collector has already been charge-sheeted for his acts of omission and commission and consequently, we hold that the collusion clause has rightly been a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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