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TMI Blog2023 (1) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the appellants holding that the refund sanctioned by the adjudicating authority in favour of the respondent was after proper application of mind and by passing of speaking orders and therefore, cannot be termed as 'erroneous refund' for the purposes of section 11A of the Act. Penalty - HELD THAT:- When the impugned order is not maintainable on merits, the question of penalty on the company or Shri Dinesh Garg would not arise. The impugned order is not legally sustainable and is liable to be set aside - Appeal allowed. - HON BLE Mr. S. S. GARG, MEMBER (JUDICIAL) And HON BLE Mr. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri Naveen Bindal, Shri Aman Garg, Advocates for the Appellants Ms. Shivani, Authorised Representative for the Respondent ORDER Per : P. ANJANI KUMAR M/s Ravi Crop Science, the appellants, are engaged in manufacture and clearance of herbicides, insecticides and fungicides; the appellants availed the benefit of area-based exemption Notification No. 56/2002; Revenue alleged that the appellants were clearing goods under Section 4 and Section 4A of Central Excise Act, 1944; the appellants were issuing invoices as per R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turing Pvt. Ltd.- 2021-TIOL-2233-HC- AHM-CX. Flock (India) Pvt. Ltd.- 2000 (120) ELT 285 (SC). Priya Blue Industries Ltd.- 2004 (172) ELT 145 (SC). ITC Ltd.- 2019 (368) ELT 216 (SC). Arviva Industries (I) Ltd.- 2007 (209) ELT 5 (SC). Jayant Dalal Private Ltd.- 1996 (88) ELT 638 (SC). Paper Products Ltd.- 1999 (112) ELT 765 (SC). 4. Ms. Shivani, learned Authorized Representative for the Department reiterates the findings of the impugned order. 5. Heard both sides and perused the records of the case. We find that the Notification No.56/2002 is operationalized in the following manner: (a) The manufacturer shall submit a statement of the duty paid from the said account current to the Assistant Commissioner or the Deputy Commissioner of Central Excise, as the case may be, by the 7th of the next month in which the duty has been paid from the account current. (b) The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification, as may be deemed necessary, shall refund the amount of duty paid from the account current during the month under consideration to the manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 person or his agent, the provisions of this sub section shall have effect Explanation: where the service of the notice is stayed by an order of a Court the period of such stay shall be excluded in computing the aforesaid period of six months or five years, as the case may be. (1A) when 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 misst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iodical 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 clearly transpires that when any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer, may within six months from the relevant date, serve a 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 to show why he should not be asked to pay the amount specified in the notice. Indisputably, in the instant case, the period of six months from the relevant date has since expired. To put it more clearly, the expression 'r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 question of law. Be that as it may, even if we were to assume that the revenue had erroneously made the refund of the excise duty in favour of the respondent, yet the period of limitation for issuing show cause notice in terms of sub-section (1) of section 11A of the Act, had since expired and, therefore, the entire process had become time barred. As already explained, the extended period of limitation as provided under provision to sub -section (1) of Section 11A was not invocable for the simple reason that the twin factors which are sine quo non for invoking the proviso were missing in the instant case. We are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, within one year 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of Notification No.33/99-CE dated 8.7.99. (ii) Even 15 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 of Section 11A of the Act in para 27 held thus: 27.Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutical Co. Vs. Collector of Central Excise, Bombay [1995 Suppl. (3) SCC 462], we find that suppression of facts can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty, when facts were known to both the parties, the omission by one to do what he might have done not that he must have done would not render it suppression. It is settled law that mere failure to declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee 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 17 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 to take an appropriate remedy against such order sanctioning erroneous refund, if any, in favour of the assessee. 21 For the foregoing reasons, we find no illegality or infirmity in the final order passed by the CESTAT Chandigarh impugned in this appeal and, therefore, uphold the same. The substantial question of law framed by this Court vide order dated 16.04.20119 reproduced above is replied in the following manner: The refund of excise duty claimed by an assessee and sanctioned by the competent Authority vide its order under Notification No. 56 of 2002-CE which or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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