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TMI Blog2019 (8) TMI 1546X X X X Extracts X X X X X X X X Extracts X X X X ..... from Unit II were non-existent and that no duty incidence could be passed on to such non-existent buyers while dropping invocation of Section 11D and thereby, ruling out the question of any double benefit being claimed. Under these circumstances, we concur with the contention of the Appellants that no intent to evade duty could be attributed on the part of Unit II with reference to which the bulk of duty demand has been confirmed as the entire exercise turns out to be revenue neutral - the demand confirmed by invoking the extended period deserves to be set aside on this limited point alone. Even otherwise as per the revenue s allegation, the excise duty was not at all required to be paid on the manufactured excisable goods for want of clearance thereof. Therefore, the excise duty collected from Unit II could not have been retained under Article 265 of the Constitution and in any event, ought to have been refunded by applying the principle of restitution more so when there was no case for unjust enrichment as the buyers were allegedly non-existent - The grant of refund under the said notification is subject to such verification as may be deemed necessary by the jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on their respective finished goods cleared during the period 2004 to 2007 (the relevant period). Pursuant to a search conducted on 3 May 2007 at the factory and office premises of both the Units, along with the residence of one of their Director, followed by an investigation spanning over a period of 3 years by the DGCEI, Regional Unit, a common Show Cause Notice dated 21 January 2010 was issued. The investigation, basis which the SCN was issued, mainly focused on establishing three aspects i.e. (i) There was no movement of goods from Unit I to Unit II or from Unit II to the independent inter-state buyers [two major Proprietorship firm (M/s. Tangum and M/s. Khar in Naharlagun A.P.) and a cabal of 80 buyers at Dibrugarh, Assam] as the goods were not intercepted at the intervening Sales Tax Check Posts; (ii) Buyers of goods from both the Units were non-existent as the Summons served to them were returned undelivered and the addressee could not be traced by the postal/local police authorities; (iii) A total of 117 transport vehicles claimed to have been engaged in transportation of goods by the Units I and II were found to be fake and/or non-goods carrying vehicles. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same is subject to pre-audit/post audit in accordance with the Board s Circular No. 809/6/2005-CX dated 1st March 2005 unlike any other refund processed under Section 11B of the Central Excise Act. Therefore, each and every refund adjudication orders passed during the relevant period, were appealable orders. However, such refund adjudication Orders were not reviewed and appealed against in the manner prescribed under Section 35E of the Act. Since the refund adjudication orders have attained finality, parallel proceedings could not have been initiated for recovery of refund alleged to have been erroneously granted by invoking Section 11A of the Central Excise Act alone without reviewing such refund adjudication orders. It is a well settled law that something which cannot be done directly cannot be permitted indirectly either. Reference in this regard is invited to the following decisions: TFL Quinn India Pvt. Ltd. Vs. CCE, Hyd-IV reported in 2016 (339) ELT 129 (para 6); Eveready Industries Ltd. Vs. CESTAT, Chennai reported in 2016 (337) ELT 189 (para 51) Union of India Vs. Amalgamated Plantations Private Limited 2016 (340) ELT 310 A2 Excise duty paid in cash alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . HC); (ii) M/s Geojit Bnp Paribas Financial Services Ltd reported in 2015-TIOl-1602 B. Contentions on factual points B1 No discrepancy in Production/Stock/Inputs Quantum of Production or electricity consumption at either of the Units has not been disputed/questioned in the entire proceedings, as evident from para 4.85 of the OIO. No variation found in stock of inputs/finished goods as at the date of search and neither is there any allegation as regards clandestine clearance of the goods produced. Under these circumstances the charge of paper clearance of the finished goods is ex-facie un-sustainable and devoid of substance. B1.1 Major inputs of Unit II during Financial Year 2005-06 2006-07 were as under: A. Iron Materials: M.S. Ingots from Unit I 8944.945 MT M.S. Ingots imported from Bhutan 7958.260 MT M.S. Ingots from Others 5471.065 MT Re Roller Scrap Purchase from others 21967.070 MT Total Input Quantity of materials (in MT) 44341.340 MT Value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elocated to Jorabat in January 2009. Hence before January 2009 there was no question of interception of goods at Khanapara, for routing to Naharlagun or Dibrugarh. The concerned Road Distance certificates issued by Assam State Transport Corporation dated 14/01/2016 and the concerned Sales Tax Check Gate Position in Assam in the mentioned two routes to Naharlagun from Byrnihat and route to Dibrugarh from Byrnihat are certified by the Commissioner of Taxes, Assam [Pages 80 to 85 of the Appeal Paper Book]. B3 Improper verification of Transport Vehicles in violation of the principles of natural justice Exact list of the said 117 No. of vehicle is not clearly apparent in the SCN. The annexure to the SCN at Page 530 to 542 refers to 159 cases but between Page 612 to 618 covers only 79 cases. Amongst those if repetition of cases are excluded then the number of vehicles are reduced to 51 only. Appellant tried to verify the vehicle number mentioned in the list from the concerned vehicle no. mentioned in the concerned invoice (duly certified by DGCEI) and was surprised to note that out of 51 Vehicle number mentioned in Page 530 to 542 of SCN, 48 Vehicle numbers were different from in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... halaya Dibrugarh, Assam such that the 2 inter-state consignments to NESL (another group company based in Dibrugarh), could also be intercepted. Thus, allegation of non-recording of these consignments at Sales Tax Check Post as contended at para 4.88 of the OIO is also totally baseless. C1. Further, the investigations made with owners of the vehicles have been referred at para 4.46 of the OIO wherefrom it can be deciphered that only 4(Four) owners of the vehicles, namely Shri Harkanta Talukdar, ( Vehicle No. AS01B0824), Shri Baljeet Singh ( Vehicle No. AS01E 4176), Shri Bikash Jyoti Das ( Vehicle No. AS01D9967) Shri Kanhaiyalal Pandey (Vehicle No. AXA 5884), were interrogated. But none of these four vehicles no(s) are referred in the list of above referred 25 consignments. Therefore, the observations have been generalized against Unit I Unit II, without any verifiable independent evidence in support of the allegation as regards paper transaction between Unit I Unit II so as to deny the refund as well as the cenvat credit of ₹ 9,39,570/- thereby causing double jeopardy to the Appellant. D Lastly, it is submitted that since the grant of refund was not erroneous, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciple of restitution more so when there was no case for unjust enrichment as the buyers were allegedly non-existent. The issue can be looked at from another angle also. The grant of refund under the said notification is subject to such verification as may be deemed necessary by the jurisdictional Assistant Commissioner or the Deputy Commissioner of Central Excise. We would like to refer to a sample refund adjudication order passed under Notification No. 32/99 in favour of Unit II of the Appellant. REFUND ORDER NO. R.302 F.NO. IV(10)329/SH.CEX.DIV/2006 Date 15.5.2006 1. M/s Byrnihat Ispat Pvt Ltd. Unit-II is an assessee holding Registration No. AABCB5768L-XM-002 engaged in the manufacture of excisable goods, viz. 1) Bars 2) Rods etc. They are availing exemption from payment of central excise duty in terms of Notification 32/99 CE dated 08.07.99 as amended and claiming refund of the excise duty paid in cash in respect of the final products viz. 1) Bars 2) Rods w.e.f. 01.02.2004. 2. They have filed a refund claim for ₹ 78,87,069.00 paid by them in cash during the month of April 2006. They claimed that they have paid total excise duty of ₹ 85,94 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of commercial production therefrom and the eligibility of the Appellant to refund while sanctioning the refund under the said notification. It is now settled by the decision of the Guwahati High Court in the Amalgamated Plantations Private Limited case that refunds processed under Notification No. 32/99 are also covered by Section 11B of the Act. We find force in the contention of the Appellant that when such refund orders were not reviewed or appealed against under Section 35E(2) of the Act, and therefore, attained finality, no parallel proceedings for recovery of such alleged erroneous refund under Section 11A of the Act was maintainable as something which could not be done directly cannot be permitted indirectly either. This legal question had also fallen for consideration before the Madras High Court in Eveready Industries India case at para 4 thereof and was answered in favour of the assessee and against the revenue. The decision of the Tribunal in TDL Quinn case at para 6 thereof, set out herein below, also supports the said legal proposition. The issue that came up for consideration in the said case before the Hon ble High Court was whether department can recover ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not adduced any reason as there was none for not following the cited precedents. 6. Factually also we find that the investigation is half-hearted and full of infirmities for the reasons mentioned below. 6.1 Production/Stock/Inputs None of these have been disputed by the revenue as tacitly evident from para 4.85 of the OIO set out below. It is also seen that the Noticees have made arguments in support of their defence on the basis of utilization of raw materials and consumption of High tension power supplied by the Meghalaya State Electricity Board. I have gone through the impugned SCN and it is seen in para 13, i.e., Result of Investigation, that Noticees No. 1, 2 3 were involved in conducting a fraudulent and fictitious transaction with buyers by reporting much larger sales figures than what is actually sold by them. In para 12(i), the charge was of fraudulent sale; in para 14(i) of the SCN, the charge was regarding suppression and misrepresentation of the actual quantity of excisable goods cleared from the factory, but nowhere in the SCN the production of the factories of the Noticees was questioned. Neither is there any allegation as regards clandesti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 140/ 17.05.2005 AS01U4891 AS01V9973 31 529/01.09.2005 AS01A4569 AS01A7571 6 156/18.05.2005 AS01C7325 AS01C7379 32 544/03.09.2005 AXM8487 AXU5487 7 200/26.05.2005 AMX8569 AMK3567 33 545/03.09.2005 MN01A4685 MN01A4575 8 215/29.05.2005 AS01J8040 AS01Q8040 34 555/04.09.2005 AS01E2448 AS01F1721 9 259/16.06.2005 AS01L1675 AS01L1677 35 561/10.09.2005 AS01C7325 AS01C1095 10 266/18.06.2005 AS01G7649 AS01Q7579 36 563/12.09.2005 AS01E7865 AS01F7760 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1B3685 AS01P3475 23 486/25.08.2005 AS01B6498 AS01D5445 49 584/24.09.2005 AS01J8040 AS01P3176 24 490/25.08.2005 MN01A4878 MN01A4575 50 585/24.09.2005 AS01Q7856 AS01J7656 25 492/26.08.2005 MN015048 MN015043 51 587/24.09.2005 AS01R2731` AS01E3765 26 498/27.08.2005 AS01R7848 AS01K7018 Similarly, the investigations made with owners of the vehicles have been referred in page 22 to 24 of the SCN. The investigation shows interrogation of only 4(Four) owners of the vehicles, namely Shri Harkanta Talukdar, (Vehicle No. AS01B0824), Shri Baljeet Singh (Vehicle No. AS01E 4176), Shri Bikash Jyoti Das ( Vehicle No. AS01D9967) Shri Kanhaiyalal Pandey (Ve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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