2021 (5) TMI 288 - HC - Central Excise

Court dismisses challenge to excess cash refund recovery under Central Excise Act, advises defense in response to notice.

The court dismissed the petition challenging a show cause notice seeking recovery of excess cash refund under Section 11A of the Central Excise Act, 1944. ... Recovery of excess cash refund - submission of the learned counsel for the petitioner is that the notice is devoid of any merit, inasmuch as, no such recovery can be made in exercise of powers under Section 11A of the Act as under the said provision only an amount which has been erroneously refunded can be refunded - HELD THAT:- It is not the case of the petitioner that the show cause notice has been issued by an authority which is not competent under law to issue the same. In such a situation, we decline to exercise our discretionary jurisdiction and dismiss the petition with liberty to the petitioner to show cause pursuant to the impugned show cause notice whereupon necessary action in accordance with law would be taken. It is made clear that it will be open for the petitioner to take up all legal pleas available to him in law in response to the show cause notice and the dismissal of this petition would not come in his way - petition dismissed. Issues Involved:Challenge to show cause notice for recovery of excess cash refund under Section 11A of the Central Excise Act, 1944.Analysis:The petitioner challenged a show cause notice dated 30.03.2020 seeking the recovery of excess cash refund amounting to Rs. 4,26,42,757 under Section 11A of the Central Excise Act, 1944. The refund orders were initially passed in favor of the petitioner based on interim orders of the High Court, pending a final decision from the Supreme Court. Subsequently, the Supreme Court ruled in favor of the government, leading to the disposal of the writ petitions. As a result, the refund made to the petitioner was deemed recoverable, prompting the issuance of the impugned show cause notice for recovery. The petitioner contended that the notice lacked merit, asserting that Section 11A only allows the recovery of erroneously refunded amounts. However, the court noted that the petitioner could raise this defense in response to the show cause notice itself.The court observed that the petitioner did not challenge the competence of the authority issuing the show cause notice. Consequently, the court declined to intervene, dismissing the petition but granting the petitioner the liberty to respond to the show cause notice. The court clarified that the dismissal of the petition would not hinder the petitioner from raising all legal defenses available to him in response to the notice. Therefore, the petition was ultimately dismissed, allowing the petitioner to address the allegations raised in the show cause notice in accordance with the law.