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TMI Blog2015 (9) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 11A of the Act. We are not impressed with the argument of the learned counsel for the respondent that the authorities being bound by the circular and it is not open for the authorities not to implement the same. In view of the judgment of the Supreme Court in Minwool Rock Fiber Ltd case (2012 (2) TMI 289 - SUPREME COURT OF INDIA ), the departmental circulars are not binding on the Tribunal and at any rate, the Tribunal did not say that they are bound by the circulars. In the words of the Supreme Court in MADRAS RUBBER FACTORY LTD [1981 (1) TMI 68 - HIGH COURT OF MADRAS] Coming to the question that is raised there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing his order. If this position is accepted then the provisions for adjudication in the Act and the Rules, the provision for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proved including the packing charges thereon. The respondent after receipt of the approved price list started paying duty under protest. Though the respondent paid the duty under protest, thereafter, he did not take any steps to challenge the approved price list by filing appeal questioning the inclusion of package charges from the assessable value. Thereby the duty payable came to be crystallized as approved by the Assistant Commissioner. 3) On 7.5.1985, the respondent filed the refund claim for an amount of ₹ 17,68,481.56 ps., claiming the said amount has been paid as excise duty on packing charges during the period 1.10.1975 to 8.1.1976 on the ground the packing material i.e., gunny bags are of durable nature and is returnable within the meaning of Section 4(4)(d)(1) of the Act and thus the value is deductable from assessable value. By issuing show-cause notice dated 17.8.1986 and after considering the objections filed by the respondent, adjudication order was passed on 19.08.1986 granting refund of ₹ 17,68,481.56 ps. Thereafter, the department filed an appeal against the adjudication order and the Commissioner had set aside the same on 29.10.1987 in Appeal No.142 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct which adjudication order subsequently came to be declared as unsustainable. 6) As the above question is the one which arise in the facts of the present case, we deem it appropriate to frame the question in exercise of the powers conferred on this Court under Section 35G3 of the Act in addition to the questions which have been raised by the appellant. 7) Learned counsel for the appellant submits that the Tribunal has erred in holding that the independent proceedings under Section 11A of the Act are required to be initiated for recovering the sum of money which has been refunded to the respondent in the process of adjudicating claim under Section 11B of the Act in spite of the fact that on merits the Tribunal had found that the respondent was not entitled to such refund. Learned counsel further submits that in the set of facts, the department is not seeking to recover erroneously refunded duty amount but was seeking to recover the duty amount refunded on account of the adjudication order passed on 19.9.1986 which order came to be set aside in the appeal proceedings. In other words, the recovery was sought to be made by way of restitution and putting back the parties in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same have been approved by the Supreme Court; that it is impermissible for the department to resort to the provisions of Section 35E of the Act for recovering erroneously refunded duty amount and thus holding independent Section 11A proceedings are required to be initiated. He further submits that the only way to recover the erroneously refunded duty amount is under the provisions of Section 11A of the Act and there are no other provisions in the Act. In that view of the matter, the order of the Tribunal is sustainable. 10) To answer the above mentioned questions of law, it would be necessary to notice the relevant provisions as applicable during the years 1975-76, the duty was leviable under the provisions of Sections 3, 4 of the Act and read with Rule 173B of the Rules. Rule 173B of the Rules provides for filing an application seeking approval of the price list with the duty payable. Rule 173B3 provides for paying the duty under protest pending approval of the list or when the list is not accepted by the authorized officer. Rule 223B prescribes the procedure for filing protest petition and the adjudication of the protest application. Rule 233B so far as relevant may be notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty under protest, he did not take any further steps as prescribed under Rule 233B of Rules for determination of the correct duty payable and thereafter seek refund of the amount excess paid, if any. Rule 233 B(8) coupled with the note makes it clear and categorical breach in following the provisions and procedure prescribed under the Rule 233B of the Rules would attach the finality to the duty as payable. Further the Rules also prescribe a clear limitation beyond which the refund of the excess duty paid is impressible. 13) At this stage, Section 11B of the Act as was in force at the relevant point of time, may be noticed. Section 11B reads as under: Claim for refund of duty. (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months 1 from the relevant date 4 in such form as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub- section (2). (4) Every notification under clause (f) of the first proviso to subsection (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its reassembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder. (5) For the removal of doubts, it is hereby declared that any notification issued under clause (f) of the first proviso to sub- section (2), including any such notification approved or modified under sub- section (4), may be res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect from 11.5.1981. Section 11B and Rule 223B are two different provisions which deal with the refund of excise duty. While Section 11B sets out a limitation of six months for making of an application for refund of any duty of excise paid, Section 11B does not lay any limitation for such application to be made in cases where the excise duty is paid under protest. (The starting point of six months from the relevant date came to be inserted by the Finance Act No.2 of 1980). Such protest application is required to be considered in terms of Rule 9B and Rule 173CC. 15) The obvious reason for not placing any limitation made applicable for the duty paid under protest is that the same is required to be adjusted on determination of the correct duty payable on the determination of the protest petition. However, in the present case, we may observe the aspect of limitation is being dealt with incidentally though the same does not arise in the facts of the present case because the duty payable as per the approved price list became final by operation of Rule 233B(8) of the Rules. As noted above, in view of operation of Rule 233B the duty as approved had become final. In the first place th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall in the category of implementation of an order, subject to finality of such order. In other words, such refund would be outside the scope of the erroneous refunds contemplated under Section 11A of the Act. In a way Section 11A and 11B of the Act operate in two different streams. 17) The situation can be best explained by reference to a civil proceedings of money suit. Pending adjudication of an appeal amount deposited / paid in honouring the judgment and decree would have been repaid back without there being any requirement of a separate suit. Present facts of the case are similar to the above illustration. 18) In the light of the conclusion we arrived at that Sections 11A and 11B of the Act are two independent provisions and parameters which are required to be considered in the process of application under Sections 11A and 11B of the Act being totally different and independent there is no interconnection between the same. The orders passed under both the Sections 11A and 11B of the Act are amenable for appeal and further appeal to the higher forums. There is no warrant for one to conclude for implementing the orders passed under Section 11A of the Act recourse is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal or the application within five years does not save the demand from being time barred. In other words, this is not a case arising in the context of Section 11B of the Act or in the context an order under Section 11B of the Act being challenged before the appellate authorities. The order of the Supreme Court dismissing the appeal of the department thereby confirming the order of the Tribunal in Re Rolling Mills case (12 supra) has no application to the facts of the present case before us and as such it has no application. Likewise, the reliance placed by the learned counsel for the respondent on Grasim Industries vs. Commissioner of Central Excise has also no application to the present case as the issue involved in the said case was whether the appellant therein can be said to be eligible for refund of the duty claimed by it in terms of Section 11B of the Central Excise and Salt Act, 1944. 21) In the said case, the appellant challenged the show cause notice issued under Section 11A of the Act contending that the show cause notice issued to him is bad and the same was issued by the department without filing any appeal. In the facts of the said case, Grasim Industries case (14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion that the petitioner was entitled to a refund of the amount paid on the value of the tin containers as the same is not includible in the assessment of tread rubber for the purpose of excise duty. The refund was made only pursuant to the said order. Consequently, it cannot be said that refund was made erroneously. A refund in order to constitute 'erroneous refund' must have been made by reason of inadvertence, error or misconstruction as will be seen from the discussion in the following paragraph. Therefore, I have no hesitation to hold that rule 10 of the Rules is not applicable to this case. 24) The facts of the present case are identical and the above judgment squarely applies to the case on hand. Likewise, in Flock (India) Pvt. Ltd., case (4 supra) the Honble Supreme Court has succinctly dealt with the finality attached to the orders passed in proceedings and categorically held a revision application is not maintainable. In the words of the Supreme Court Coming to the question that is raised there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the parties had held as follows: Para 16. After a careful consideration of the submissions of the learned Counsel appearing on either side in the light of the judicial pronouncements placed before me and the relevant provisions of law and the indisputable material of facts on record, I am of the view that the submissions on behalf of the petitioner have no merit and do not merit countenance in my hands. So far as the decisions of the Apex Court referred to before me are concerned, they had no occasion to deal with or decide the issue that is relevant or raised before me in this case. The observations made were merely on the scope of Section 11-A and the necessary formalities to be observed and the conditions to be satisfied for invoking the powers under Section 11-A of the Act. The impact of an interaction of the said provision with the provision contained in Section 35-A and Section 35-E was not at all considered in any of the decisions of the Apex Court but were in issue and considered only in the opinion expressed by some of the Tribunals and whereas the branch of the Tribunal at South had taken a view favourable to the Revenue, the Branch of the Tribunal at North took ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, the learned single Judge held as follows: Para 21. So far as the facts and circumstances of the case are concerned, there is no dispute that the impugned order came to be passed within the six months period visualised under Section 11-A and that notice of the application filed under Section 35-E(4) was also served upon the petitioner calling upon him also to file his cross objections, if any, and he was fully heard and then orders have been passed and communicated to the petitioner, also. There is no need to follow the procedure prescribed under Section 11-A once over again. So far as the facts and circumstances of the present case are concerned, it may also be taken that the provisions of Section 11-A have also been substantially and effectively complied with when the procedure under Section 35-E has been followed and notices have been issued and no legitimate or real grievance whatsoever could be made by the petitioners. There is also no substance or merit in the plea that the authority exercising power under Section 35-E(4) can only set aside the order of the adjudicating authority and cannot direct refund to the State or order recovery of the amount erroneously refunded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of not pursuing the protest petition. In other words the grant of refund was not the result of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods. The Tribunal failed to notice the statutory provision in making applicable to the present case. The Supreme Court while interpreting Section 28 of the Act, which was in pari materia to the unamended Section 11 of the Act, interpreted the word erroneously refunded as meaning The expression erroneously refunded means refunded by means of an order which is erroneously made in Geep Flashlight Industries Ltd., Vs. Union of India and Others . 29) The judgment of the Madras High Court in Commissioner of Central Excise, Coimbatore Vs. PRICOL Ltd.2015 (320) ELT 703 (Mad), also does not support the case of the respondent. A close reading of the same does not indicate any greater reasoning justifying ignoring of the judgment of the Supreme Court in Asian Paints Case (6 Supra). Besides that the High Court had relied on the case of Re Rolling Mills (12 supra) and also the Board Circular, which have been held to be not applicable. Two orders passed by the Joint Secretary, Government of India, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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