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TMI Blog2019 (7) TMI 1347X X X X Extracts X X X X X X X X Extracts X X X X ..... Petition dismissed. - W.P.Nos.22090 to 22099, 22201 to 22203 and 23547 to 23551 of 2018 And W.M.P.Nos.25888 to 25897, 26017 to 26019, 27497 to 27501 of 2018 - - - Dated:- 24-7-2019 - Mr. Justice M. Sundar For the Petitioners : Mr.T.Mohan for Mr.Christopher Manoharan in all Writ Petitions For the Respondents : Mr.T.R.Senthil Kumar, Senior Standing Counsel for Customs in W.P.Nos.22090 to 22099 And 22201 to 22203 of 2018, Mr.A.P.Srinivas, Senior Standing Counsel for Customs in W.P.Nos.23547 to 23551 of 2018 COMMON ORDER This common order will dispose of these 18 writ petitions. 2 Mr.T.Mohan, learned counsel appearing on behalf of counsel on record for writ petitioners in all 18 writ petitions, Mr.A.P.Srinivas, Senior Standing Counsel on behalf of all respondents in W.P.Nos.23547 to 23551 of 2018 and Mr.T.R.Senthil Kumar, Senior Standing Counsel on behalf of respondents in W.P.Nos.22090 to 22099 and 22201 to 22203 of 2018 were before this Court. 3 All three aforesaid learned counsel before this Court submitted without any disputation or disagreement that the central theme or in ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of duty, however such duty payment was from capital goods CENVAT credit account of writ petitioners. Thereafter, writ petitioners made rebate claims under Rule 18 of CER in respect of consignments that were exported on payment of duty albeit by way of payment from their CENVAT capital goods credit account. 9 These claims for rebate qua excise duty so paid were processed and 'Orders-in-Original' ('OIO' for brevity) were passed by second respondent inter-alia acceding to such rebate claims. Such orders were passed under Section 35E of CE Act. Thereafter, impugned SCNs were issued and as mentioned supra, impugned SCNs were issued by second respondent under section 11A of CE Act. 10 Vide impugned SCNs, writ petitioners who are noticees qua impugned SCNs were called upon to show cause as to why the rebate sanctioned should not be treated as erroneous rebate and recovered from writ petitioners. Writ petitioners noticees were also called upon to show cause as to why interest should not be charged and as to why penalty should not be imposed under relevant rules of CER for making what according to second respondent is willful mis-declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in full by the 2nd respondent. Thereafter impugned SCNs came to be issued. 7.According to the learned counsel for writ petitioners, proposition that falls for consideration is the request for rebate having been acceded to by the 2nd respondent is an appealable order (appeal under Section 35 E(2) of CE Act). No appeal having been filed by the respondents, a SCN cannot be issued under the garb of 11 A as that amounts to a review of the order in original, wherein prayers for rebate were acceded to either in part or in full. 8.In response, Revenue counsel would contend that Section 11 A provides for issuing SCN under 5 different situations and in the instant case, the duty is 'erroneously refunded' situation. Therefore, whether SCN issued under Section 11 A of CE Act on the ground that duty has been erroneously refunded, is vitiated by a jurisdictional fact issue or lack of jurisdiction, as the orders granting rebate, pursuant to which refund was made, have either attained finality or not assailed as on the date of SCN. List these matters on 08.07.2019. 12 To be noted, all three learned counsel before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 35E(2) of CE Act, is learned writ petitioners' counsel's further say. 16 In response, learned Revenue counsel submitted that circulars are only guiding principles and in the instant case, owing to judgment of this Court in Raghav Industries Ltd. Vs. Union of India reported in 2016 (334) E.L.T. 584 (Mad.) , what writ petitioners had done is clearly a case of availing double benefit and therefore, second respondent was justified in issuing impugned SCNs. 17 Furthering submissions in this direction, learned Revenue counsel placed huge reliance on a judgment of Hon'ble Supreme Court in Asian Paints (India) Ltd. Vs. Collector of Central Excise, Bombay reported in 2002 (142) E.L.T. 522 (S.C. ). Elaborating his submission in this direction, learned Revenue counsel pointed out that (142) E.L.T. 522 Asian Paints case was rendered by a Larger Bench of Hon'ble Supreme Court constituted by Three Hon'ble Judges of Hon'ble Supreme Court, wherein it was held that the order of 'Customs, Excise and Gold (Control) Appellate Tribunal' ('CEGAT' for brevity), more particularly an order made by a Larger Bench of CE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which rendered Eveready order. To be noted, in Grasim Industries , Hon'ble Supreme Court held that Section 11A of CE Act provides for right of issuance of SCN if duty has been erroneously refunded to a party without taking recourse to filing of appeal. 21 With regard to Grasim Industries order of Hon'ble Supreme Court and Eveready Industries case of Hon'ble Division Bench, this Court finds that paragraph 13 of Grasim Industries and paragraph 41 of Eveready Industries are of utmost importance and the same read as follows : Paragraph 13 of Grasim Industries : 13. Section 11A provides for a right of issuance of show cause notice, if, according to the Department, duty of excise has been erroneously refunded to a party. In the event of such erroneous refund of excise duty, the competent authority may then issue such a show cause notice as provided for under Section 11A, in which case the assessee has to show cause as to why the aforesaid amount of refund, which is erroneously refunded, should not be recovered from him. In such a case, there is no question of filing any appeal, as appropriate remedy as pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1A can be issued without assailing the order of refund under Section 35E irrespective of whether it was made by the original authority or by the appellate authority. 24 However, with regard to the second aspect, this court is unable to accept the submission of learned counsel for writ petitioners that because Grasim Industries case has been referred to in Panyam Cements case, which is a judgment of Andhra Pradesh High Court and as Panyam Cements case has been referred to in Eveready case, it should be construed that Grasim Industries case has also been considered in Eveready case. 25 When there is direct judgment of Hon'ble Supreme Court on interplay between Sections 35E and 11A of CE Act, it ought to have been brought to the notice of this Hon'ble Court while Eveready case was argued. To be noted, as already mentioned supra, Grasim Industries case is dated 18.8.2011 and Eveready was rendered only on 03.03.2016. More over, a perusal of Eveready order reveals that Panyam Cements was referred to in the order, but there is no mention about Grasim Industries case in Eveready case. If the submission of learned counsel for writ petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th that of the order of Hon'ble Supreme Court. Therefore, the Larger CEGAT Bench view in Asian Paints owing to doctrine of merger is clearly a ratio and rationale of Hon'ble Supreme Court. 29 When a Hon'ble High Court judgment and order of Hon'ble Supreme Court are placed before this Court, no elaboration is required to say that the view of Hon'ble Supreme Court is the one which has to obviously be followed. However, a closer reading of Eveready case reveals that Eveready itself refers to Asian Paints case, but Asian Paints was distinguished on facts. This comes out very clearly from paragraph 41 of Eveready case which has been extracted and reproduced supra. 30 In paragraph 41, it has been clearly held that Eveready is not a case where the court was dealing with a logjam between sections 35E and 11A. In the considered view and opinion of this Court, the instant cases on hand are clearly those where writ petitioners' case is predicated on a logjam between the two provisions. In other words, writ petitioners are protagonists of this logjam between sections 35E and 11A of CE Act as these writ petitions are predicated on this sheet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this court to supply emphasis and highlight ) 35 Owing to the narrative thus far, in the considered view of this Court, instant cases on hand certainly do not fall under rare and exceptional cases warranting interference in impugned SCNs. Though obvious, it is made clear that when adjudication pursuant to impugned SCNs proceed, it will be open to writ petitioners to submit that they have not availed double benefit and obviously, this aspect will also be adjudicated upon on merits. As already alluded to supra, this is one of the main reasons as to why this court has refrained and restrained itself from expressing any opinion on this aspect of the matter. Suffice to say that this Court is informed that Raghav Industries case has been carried in appeal, i.e., intra court appeal vide W.A.No.429 of 2016 and that the same is pending, but there is no disputation that Raghav Industries case has not been stayed. 36 Sum totality of the narrative thus far and dispositive reasoning set out supra leaves this court with the considered view that impugned SCNs do not deserve to be interfered with and that impugned SCNs have to be carried to their logical e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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