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TMI Blog2021 (10) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... ariff Act, 1985, from payment of Excise duty from units located in North East India, as specified in the annexure to the said notification. This scheme provided for refund of the duty of excise or additional duty of excise leviable thereon as equivalent to the amount of duty paid by the manufacturer, other than the amount of duty paid by Cenvat credit under the Cenvat Credit Rules. The respondent, which reportedly manufactured excisable goods at its factory situated at Byrnihat, Meghalaya, during the period March, 2002 to November, 2004, was, therefore, found to be eligible for benefits under the said notification. 3. It appears that thereafter, pursuant to a search and seizure operation and subsequent investigation conducted by the Directorate General of Central Excise Intelligence (DGCEI), it was alleged that the respondent had misused the exemption notification No. 32/99-CE, dated 8th July, 1999 and wrongly availed refunds amounting to Rs. 9,45,67,825/- during the period from October, 2002 to December, 2004, for the clearances of finished goods, claimed to have been manufactured by the respondent Unit during the period March 2002 to November 2004. It was further alleged that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by one family. M/s. Ishaan Technologies Pvt. Ltd. was not a separate entity but a dummy unit of M/s. Manaksia Ltd. All its operation from purchase of raw materials to receipts of finished products on papers were organized by the employees at the direction of management of M/s. Manaksia Ltd. and were controlled by the Agarwal family. 4. That the respondent was also called upon to show cause as to why:- (a) The amount of Rs. 9,45,67,825.70/- shall not be demanded from and paid by the respondent in terms of proviso to Section 11A(1) of Central Excise Act, 1944. (b) The amount of Rs. 53,05,582/- being the amount of wrong Cenvat Credit availed be not demanded and paid by the respondents in terms of Rule 12 of Cenvat Credit Rules, 2002 and/or Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944. (c) Penalties be not imposed in terms of Section 11AC of the Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002. (d) Penalties be not imposed in terms of Rule 13 of Cenvat Credit Rule, 2002 and/or Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. (e) Interest at appropriate rates un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and examined by this Court. Learned senior counsel contends that the CESTAT erred in law in holding that, - since according to the show cause notice, and impugned order itself, there was no manufacture of goods, therefore, there can be no levy and hence no requirement to make payment of any duty of Central Excise payable under the Act and resultantly, the question of any recovery of duties not levied or not paid or erroneously refunded in terms of section 11A(1) of the Act does not arise (emphasis supplied). This observation, he submits, is patently incorrect, inasmuch as, the exemption notification provided for refund of duty of excise in respect of goods manufactured in a specific area of the region and as such, in respect of goods that are not manufactured in a specific area, there will be no question of any refund under the said notification. The other points raised by the learned counsel, in brief, are; the CESTAT had ignored vital materials such as the fact that the respondent did not have requisite plant and machinery to manufacture the subject goods and also the fact that the respondent had resorted to conscious and deliberate mis-declaration and mis-representation by m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o evade payment of duty,- (a) the Central Excise Officer shall, within two years from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of- (i) his own ascertainment of such duty; or (ii) duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under section 11AA." On examination of the above quoted provision of law, it clearly shows that the case at hand, is not one concerning conditions as given in section11A, but the issue concerns refunds made purportedly under the entitlements claimed by the respondent under the exemption notification, which, the Appellant/Revenue seeks to recover by taking recourse to section 11A which in our view, is not admissible. The cited case of Commissioner of Central Excise, Shillong Vs. Jellalpore Tea Estate (supra) also appears to squarely cover the instant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period October 2002 to December 2004. The order of the Assistant Commissioner granting refund could have been challenged by the Department only by resorting to Section 35E of the Act, which has not been done in the instant case, and therefore, as held by the Hon'ble Gauhati High Court, the Revenue cannot initiate collateral proceedings to set aside the said order by resorting to Section 11A of the Act. 11.2 .......................................... 11.3 ......................................... 11.4 ........................................ 11.5 In the present case, since according to the show cause notice and the impugned order themselves there was no manufacture of the subject goods, there can be no levy and hence no requirement to make payment of any duty of central excise payable in respect of subject machineries under the Act. Consequently, the question of any recovery of "duties of excise" not levied or not paid or short levied or short paid or erroneously refunded in terms of Section 11A(1) of the Act also does not arise. 11.6 ........................ 11.7 .......................... 11.8 .......................... 11.9 In so far as the demand of Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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