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TMI Blog2023 (7) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant date is defined under sub-section 3 (ii) of Section 11A of the Act. Neither side has disputed that the limitation, provided for issuance of show cause notice in terms of sub-section 1 of section 11 A of the Act had expired much prior to the issuance of show cause notice to the respondent - The sine quo non for invoking the proviso is to demonstrate by reference to material on record that the assessee had claimed and has been paid erroneous refund of the excise duty by reason of fraud, collusion or any willful misstatement or suppression of facts or contravention of any provisions of the Act and the rules framed thereunder and that this fraud, collusion, willful misstatement or suppression of facts etc., is made with an intention to evade payment of duty by the assessee or his agent. There are no sufficient material on record to come to the conclusion that the respondent, with an intention to evade payment of duty, suppressed or misstated any facts relating to the manufacturing process and the product which it produced and passed on by payment of excise duty. Whether the product produced by the respondent is a Gibbereillic acid simplicitor or is a plant growth regulator co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGE For the Appellant Through :- Mr. Jagpaul Singh Advocate For the Respondent(s) Through :- Mr.Naveen Bindal, Advocate with Mr. Mohd Ashfaq Mir Advocate JUDGEMENT SANJEEV KUMAR, J. 1. This appeal by the Revenue filed under Section 35 G of the Central Excise Act, 1944 ['the Act'] is directed against a final order No. A/62272/2018-EX (DB) dated 19.03.2018 passed by the Customs, Excise & Service Tax Appellate Tribunal, Chandigarh ['CESTAT'] whereby the appeal preferred by the respondent has been accepted and the impugned order dated 17.02.2011 passed by the Commissioner, Central Excise, J&K, Jammu has been set aside. 2. Briefly stated the facts leading to filing of this appeal are that the respondent is engaged in manufacturing of various products like Pesticides, Insecticides, Herbicides and Plant Growth Regulators and has established its unit at SIDCO Industries Complex, Samba. The respondent is registered for the manufacture of aforesaid products under Tariff Heading Nos. 38089330, 38089990, 38089090 & 38089340 respectively of the 1st Schedule to the Central Excise Tariff Act, 1985 ['the Act of 1985']. The respondent being eligible had been availing exemption/refund of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that the goods in question were not dutiable and, therefore, the respondent was neither liable to pay the duty, nor was entitled to refund of the same. The said show cause notice culminated into order in original passed by the appellant and demand was confirmed along with interest and penalty. 3. Feeling aggrieved against the aforesaid order in original passed by the Commissioner, Central Excise, Jammu, an appeal was filed by the respondent before CESTAT. The appeal of the respondent was allowed vide order impugned primarily on the following two grounds: (i) That all the facts were in the knowledge of the Revenue and there was no suppression on the part of the respondent before CESTAT and, therefore, the extended period of limitation was not invocable. The demand along with interest and penalty raised by the appellant herein was, thus, time barred; and, (ii) That the Revenue had not challenge the appealable orders sanctioning refund to the respondent herein before CESTAT and, therefore, those orders had attained finality. The demand could not have been raised under Section 11A of the Act without challenging the appealable orders. 4. The revenue did not accept t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel appearing for the respondent argues that Section 11A of the Act, inter alia, deals with recovery of duty of excise "erroneously refunded" and, therefore, it has to be a case of refund of duty of excise under Section 11B of the Act which is the only section dealing with refund of the excise duty. He, therefore, argues that Section 11A and Section 11B of the Act go hand in hand and, therefore, are required to be read together. He submits that, as per the Board Circular dated 19.12.2002, the provisions of Section 11B are not applicable to the exemption notification, for, the said notification only provides a mechanism to operationalise the exemption and is not a provision for refund. He submits that the case of the respondent was a case of grant of exemption and not a case of refund in the eye of law and, therefore, the provisions of Section 11A were not invocable. His further argument is that the orders sanctioning refund passed by the Revenue were indisputably appealable under Section 35 of the Act. The revenue did not file appeals and accepted the orders passed by the Assessing Authority and sanctioned the refund by passing separate orders for each month. He submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst set out the provisions of Section 11A of the Act. "11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded-- (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non levy or non payment, short levy or short payment or acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been 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-- Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any willful misstatement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty by such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (ii) "relevant date" means,-- (a) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid- (A) where under the rules made under this Act a periodical return, showing particulars of the duty paid on the excisable goods removed during the period to which the said return relates, is to be filed by a manufacturer or a producer or a licensee of a werehouse as the case may be, the date on which such return is so filed (B) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (C) In any other case, the date on which the duty is to be paid under this Act or the rules made thereunder (b) In a case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (c) In the case of excisable goods on which duty of excise has been erroneously refunded, the date of such refund" 12. From a reading of Section 11A of the Act, it clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parent manner explained the entire process leading to the manufacture of the product in question in the industrial unit of the respondent. The process of manufacture followed in the industrial unit and the product produced in the manufacturing process was all along clearly indicated by the respondent by filing periodical returns. The periodical audits also took place and refunds were sanctioned by the Competent Authority in favour of the respondent by passing a speaking order for each month. It is pursuant to the refund sanctioning orders passed by the competent authority, the respondent was released the refund. 14. Viewed form any angle, we do not find sufficient material on record to come to the conclusion that the respondent, with an intention to evade payment of duty, suppressed or misstated any facts relating to the manufacturing process and the product which it produced and passed on by payment of excise duty. Whether the product produced by the respondent is a Gibbereillic acid simplicitor or is a plant growth regulator containing Gibbereillic acid as dominant ingredient, is a question of fact which cannot be gone into by this Court hearing an appeal on a substantial questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund has been sanctioned by the Adjudicating Authority by passing a speaking order and which order is appealable under Section 35 of the Act, more particularly, when such order has not been challenged by the revenue and has attained finality. 17. The case in hand is also covered by the Division Bench judgment of the Gauhati High Court rendered in the case of Jellalpore Tea Estate (supra) wherein the issue has been considered and dealt with by the Division Bench in paragraphs (12) to (15) which, for facility of reference are reproduced hereunder: "12. The material portion of Section 11A of the Act reads as follows: "11-A. Recovery of duties not levied or not paid or short- levied or short-paid or erroneously refunded- (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non- levy or non-payment, short-levy or short-payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder a Central Excise Officer may, withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed on 29.4.2002 could be challenged only by resorting to Section 35-E of the Act. The Revenue could not initiate collateral proceedings to set aside the order dated 30.4.2002 by resorting to the enabling power under Section 11A of the Act. 15. Consequently, we are of the opinion that: (i) Section 11A of the Act is not applicable to the facts of the case since the issue raised did not concern any approval, acceptance or assessment relating to the rate of duty on or valuation of any excisable goods. The issue raised by the assessee related to its entitlement to the benefit of Notification No. 33/99-CE dated 8.7.99. (ii) Even otherwise, the Revenue could not take recourse to Section 11A of the Act when it had a statutory remedy available to it to challenge the order dated 29.4.2002 passed by the Assistant Commissioner of Central Excise, Silchar by resorting to the revisional power available under Section 35-E of the Act" 18. The expression 'willful suppression' also fell for determination of the Supreme Court in the case of Anand Nishikawa Company Ltd vs. Commissioner of Central Excise, Meerut, 2005 (188) ELT 149 (SC) wherein the Apex Court, after considering the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has to show cause as to why the aforesaid amount of refund, which it erroneously refunded, should not be recovered from him. In such a case, there is no question of filing any appeal, as appropriate remedy as provided under Section 11A is available. Therefore, in our considered opinion, the first contention of the counsel appearing for the appellant has no merit." 20. From a reading of para 10, it clearly transpires that the Supreme Court has only held that, once a show cause notice, in terms of section 11A of the Act has been issued by the revenue department to the assessee for recovery of erroneous refund made to it, the remedy of the aggrieved assessee is provided under section 11A itself. The judgment therefore cannot be held to lay down a proposition of law that section 11A is invocable even in a case where there is no erroneous refund, rather the refund of the excise duty is pursuant to a speaking order passed by the Adjudicating Authority after following due process of law. Such order passed by the Assessing Authority is appealable under Section 35 of the Act or the competent Authority of the revenue may invoke Section 35E of the Act and direct the concerned Authority t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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