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TMI Blog2015 (3) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... ELT 328 is correct in law? ii) Whether the Tribunal's decision that amounts erroneously refunded could not be recovered by filing an appeal under Section 35-E of the Central Excise Act unless a demand notice was issued under Section 11A is correct in law when the Hon'ble Supreme Court in the case of Asian Paints (India) Ltd. - Vs Commissioner of Central Excise, Mumbai, reported in 2002 (142) ELT 522 had held to the effect that an order issued under Section 35-E would be equally sustainable in law for recovering dues of excise duty? 2. The facts, in a nutshell, are as hereunder :- The respondent is engaged in the manufacture of automobile parts and components. The assessee cleared waste and scrap and replacement of defective products without payment of duty. The period in question pertains to September, 1998. On the ground that the investigation revealed that the assessee cleared waste and scrap and replacement for defective products without payment of duty and also resorted to under-valuation of the goods, adjudication proceedings were initiated and pending adjudication, the assessee deposited Rs. 1.55 Crores for the purpose of co-operating with the investigation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act entails unjust enrichment. We find that the lower appellate authority has found unjust enrichment in the impugned refund without adequate evidence. 3. However, the main plea as made by the assessee before the Tribunal was that even though the appeal was filed well within the time limit as specified under Section 35 (E) (3) of the Act, however, no notice, as contemplated under Section 11-A of the Act has been issued for making recovery of the erroneous refund. The said submission found favour with the Tribunal and the Tribunal, placing reliance on the Board's circular No.423/56/98-CX dated 22.9.1998 and the decision of the Supreme Court in Commissioner of Central Excise Vs Re-Rolling Mills (1997 (94) ELT 8 (SC)), which in turn relied upon the decision in Union of India Vs Jain Shudh Vanaspathi Ltd. & Anr. (1196 (86) ELT 460 (SC) :: 1996 (10) SCC 520), allowed the appeal preferred by the assessee. For better appreciation, the relevant portion of the order of the Tribunal is extracted hereinbelow :- "7. In the Circular No.423/56/98-CX dated 22.9.1998, the CBEC had issued the following clarification :- "Certain doubts have been raised regarding whether the erroneous refunds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant that the Supreme Court in Asian Paints (India) Ltd. - Vs Collector of Central Excise, Bombay (2002 (142) ELT 522 (SC)) has negatived the contention that recovery of excise duty cannot be made pursuant to an appeal filed after invoking the provisions of Section 35E if the time limit provided under Section 11A has expired, since such an invocation would, in effect, render Section 35E virtually ineffective and the same is impermissible. Therefore, learned standing counsel for the appellant urged that the impugned order of the Tribunal has to be interfered with. 5. Per contra, learned counsel appearing for the respondent/assessee reiterated his submissions as made before the Tribunal to the effect that though appeal was filed as specified under Section 35 (E) (2) and is within the time specified, however, no show cause notice has been issued, within the stipulated time, as contemplated under Section 11A of the Act, which is mandatory in nature and, therefore, in the absence of following the mandatory necessity of issuing the show cause notice, the appeal filed by the Department has to fail. 6. Heard the learned standing counsel appearing for the appellant/Department and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that without a show cause notice issued under Section 11-A, there could be no recovery consequent to proceedings initiated under Section 35-E of the Act. 9. Reliance was placed on the decision of the Apex Court in Asian Paints (India) Ltd. - Vs Commissioner of Central Excise (2002 (142) ELT 522 (SC), by the learned standing counsel for the Department to drive home the point that the appeal filed by the Department is not time barred. In the said case, the appeal before the Tribunal was whether an order proposing to review the order resulting in short levy under Section 35E should be in conformity with Section 11A of the Act. In the said case, the Tribunal held that Section 11A cannot be read in Section 35E (3) and it was held that the provisions of limitation prescribed under Section 35E and Section 11A are independent. The said view was also affirmed by the Supreme Court in Asian Paints (India) Ltd. - Vs Commissioner of Central Excise, Bombay (2002 (142) ELT 522 (SC)). 10. In the impugned order passed by the Tribunal, however, the abovesaid judgment in Asian Paints (supra) was distinguished by the Tribunal on the ground that the said decision did not deal with the issue as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve effect, [as if, [***]] for the words [one year], the words five years were substituted." 12. Section 11-A of the Central Excise Act, as it stood prior to amendment with effect from 12.5.2000, relates to recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded, within the period prescribed from the relevant date. The present case pertains to 1998 at which point of time the period of limitation fixed for issuance of show cause notice was six months. The said period of six months was amended to one year by Section 97 of the Finance Act 2000 (10 of 2000) with effect from 12.5.2000. Therefore, for all purposes, any period prior to 12.5.2000, for the purpose of recovery of duties not levied or not paid or short-levied or short-paid or erroneous refund, the time for issuance of show cause notice is only six months from the relevant date. 13. On a careful reading of Section 11-A, extracted above, it is clear that the said section mandates the issuance of a show cause notice, prior to passing an order, asking the person to show cause as to why duty, which has not been levied or paid or which has been short-levied or short-paid or to whom the refun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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