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<h1>Tribunal rules in favor of appellants on erroneous refund issue under Notification No. 56/2002</h1> <h3>M/s Ravi Crop Science Versus The Commissioner of Central Excise, Jammu & Kashmir And Shri Dinesh Garg, Partner M/s Ravi Crop Science Versus The Commissioner of Central Excise, Jammu & Kashmir</h3> M/s Ravi Crop Science Versus The Commissioner of Central Excise, Jammu & Kashmir And Shri Dinesh Garg, Partner M/s Ravi Crop Science Versus The ... Issues Involved:1. Applicability of Section 11A for recovery of 'erroneous refund'.2. Validity of the refund sanctioned under Notification No. 56/2002.3. Allegations of fraud, collusion, or willful misstatement by the appellants.4. Imposition of penalty on the company and Shri Dinesh Garg.Summary of Judgment:1. Applicability of Section 11A for Recovery of 'Erroneous Refund':The appellants argued that Section 11A, which deals with the recovery of duty 'erroneously refunded,' is not applicable to refunds under Notification No. 56/2002. They cited a Board Circular dated 19.12.2002, which clarified that the refunds under this notification are not due to excess payment of excise duty but are a mechanism to operationalize the exemption. Therefore, the provisions of Section 11A concerning 'erroneous refund' do not apply.2. Validity of the Refund Sanctioned under Notification No. 56/2002:The refund was duly sanctioned by the Departmental officers in terms of Notification No. 56/2002, and such orders are appealable under Section 35 of the Central Excise Act, 1944. The appellants contended that the refund orders had been accepted by the Department after due application of mind and thus could not be termed 'erroneous.' They relied on various case laws, including Krishi Rasayan Exports Pvt. Ltd. and others, to support their argument.3. Allegations of Fraud, Collusion, or Willful Misstatement:The Tribunal found no material evidence to suggest that the appellants had suppressed any material facts or made any willful misstatement to evade payment of duty. The High Court of J&K in Krishi Rasayan Exports Pvt. Ltd. had previously ruled that the extended period of limitation under Section 11A could not be invoked in the absence of fraud, collusion, or willful misstatement. The Tribunal concurred with this view, noting that the refunds were sanctioned after a transparent process and periodic audits.4. Imposition of Penalty on the Company and Shri Dinesh Garg:Since the impugned order was found to be legally unsustainable on merits, the question of imposing penalties on the company or Shri Dinesh Garg did not arise. The Tribunal set aside the penalties.Conclusion:The Tribunal concluded that the impugned order was not legally sustainable and set it aside. Both appeals were allowed, and the penalties were dismissed. The judgment was pronounced on 11/10/2023.