Feeling aggrieved and dissatisfied with the impugned judgment and order dated 24.09.2008 passed by the High Court of Judicature at Bombay in Central Excise Appeal No.186 of 2008 by which the Division Bench of the High Court has dismissed the said appeal preferred by the Revenue and has affirmed the judgment and order passed by the Appellate Tribunal by which the Appellate Tribunal held that the show cause notice under Section 11A of the Central Excise Act, 1944 is required to be issued in case of erroneous refund of the duty, the Revenue has preferred the present appeal.
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The respondent – company filed a writ petition before the Delhi High Court being Writ Petition No.1190 of 1981 inter alia challenging the levy and collection of duty on the said yarn captively consumed by them. If the Bank Guarantee have already been given in any case in pursuance of the directions of the Delhi High Court it will continue in operation and shall be kept alive from time to time.” Out of the amount demanded, Rs.1,48,07,132.84 was paid on different dates between 18.04.1983 to 28.12.1984, as per the directions of this Court.
The Tribunal set aside the order passed by the Commissioner (Appeals) by order dated 15.05.2000 on the ground that there was no demand issued by the Department under Section 11A of the Central Excise Act. That thereafter the Revenue in exercise of powers conferred under Section 35E(2) of the Central Excise Act, preferring an appeal before the Commissioner (Appeals) prayed for aside setting the order passed by the Deputy Commissioner dated 21.12.2000 sanctioning the refund, on the grounds set out therein including that there was unjust enrichment and that the refund claimed was time barred under Section 11B of the Central Excise Act. Pending the said appeal and consequent to the order dated 13.05.2005, setting aside the Order-in-Original sanctioning the refund claim of Rs.2,96,14,264/- and in absence of specific stay against the said order in appeal, the Revenue proceeded with recovery of an amount of Rs.20,00,000/- by way of appropriation of refund claims payable to the assessee under O-I-O dated 04.01.2007.
(ii)
The order of the Commissioner of Central Excise (Appeals), impugned in the above Appeal, without issuing notice under Section l1A of the Act, is therefore not capable of being implemented and liable to be set aside on this ground alone.”
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That the Tribunal by its Order dated 12.10.2007 considered and decided only the points of law raised vide Misc. Aishwarya Bhati, learned ASG appearing on behalf of the Revenue has vehemently submitted that in the facts and circumstances of the case the High Court has materially erred in relying upon the judgment of the Bombay High Court in the case of Bajaj Auto Ltd (supra) which was delivered on 15.02.2002. It is submitted that as such the impugned order passed by the High Court is silent on the reasoning as to why the reliance placed by the Revenue on the decision of this Court in the case of Asian Paints (India) Ltd. It is submitted that a notice under Section 11A would be meaningless with a review under Section 35E, of the order sanctioning the refund. It is submitted that question of unjust enrichment has not at all been examined by the Tribunal and the Tribunal only considered the grounds set out in the additional grounds which was by way of amendment/raising the additional grounds. 5 It is further submitted that neither the Tribunal nor even the High Court has considered the fact that while claiming the refund the assessee had claimed that the initial payment was under protest or while contesting the demand that the assessee took the stand that assessment was final and without notice under Section 11A amount cannot be recovered.
It is submitted that in the case of Re-Rolling Mills (supra) the Tribunal specifically observed and held that the time limit of Section 11A governs the issue of the demand under that Section and that Section alone and therefore if no demand in accordance with Section 11A is issued, nothing else can take its place. 3 It is submitted that therefore the issue of show cause notice under Section 11A of the Central Excise Act is a condition precedent for recovery of the alleged erroneous refund within the normal period of limitation prescribed under Section 11A of the Act notwithstanding proceedings under Section 35E being initiated by the Revenue against the order granting refund. 1 While considering the aforesaid issue it is required to be noted that as such in the present case the original authority while passing the O-I-O allowed the refund. That the order-in-original sanctioning the refund was the subject matter of review under Section 35E of the Act. As such the assessee is claiming the refund on the basis of O-I-O sanctioning the refund which as such has been set aside in the proceedings under Section 35E of the Central Excise Act. To so read the provisions, would be to render Section 35-E virtually ineffective, which would be impermissible.”
4 Before this Court in the case of Asian Paints (India) Ltd.
(supra) and rather has followed its earlier decision in the case of Bajaj Auto Ltd (supra) which admittedly was prior to the decision of this Court in the case of Asian Paints (India) Ltd.
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The impugned judgment and order passed by the High Court and that of the Tribunal are hereby quashed and set aside and the order passed by the Commissioner (Appeals), Mumbai dated 13.05.2005 is hereby restored. SHAH)…………………………………J.
Case Title: COMMISSIONER OF CENTRAL EXCISE MUMBAI 1 Vs. M/S MORARJEE GOKULDAS SPG.AND WVG.CO. LTD. (2023 INSC 285)
Case Number: C.A. No.-003039-003039 / 2011
