1997 (3) TMI 218 - AT - Central Excise

Tribunal dismisses appeal, upholds refund demand under Section 11A or 28.

The appeal was dismissed as the Tribunal confirmed that a demand for refund wrongly sanctioned must be made under Section 11A or Section 28, allowing for ... Limitation for recovery of wrongly sanctioned refund - demand under Section 11A - independence of demand provisions from alternative recovery provisions - retrospective operation of statutory amendment - refund payable to Consumer Welfare Fund where duty incidence passed onLimitation for recovery of wrongly sanctioned refund - demand under Section 11A - independence of demand provisions from alternative recovery provisions - Validity of Collector (Appeals) finding that the demand was barred by limitation because no notice under Section 11A had been issued - HELD THAT: - The Collector (Appeals) allowed the appeal on the ground that, although the Assistant Collector's order had been appealed under the Act, no notice demanding duty had been issued under Section 11A and therefore the demand was time-barred. The Tribunal examined precedent where the recovery of wrongly sanctioned refunds requires a demand under Section 11A (or Section 28 of the Customs Act as applicable) and noted decisions holding that Section 11A/11B operate independently and cannot be displaced by resort to other provisions. Having regard to those decisions and the statutory scheme, the Collector (Appeals) was correct in holding that absence of a Section 11A notice rendered the demand barred by limitation, and the appeal in respect of the demand therefore fails.Collector (Appeals) correctly held demand barred by limitation for want of a notice under Section 11A; appeal on that ground dismissed.Retrospective operation of statutory amendment - refund payable to Consumer Welfare Fund where duty incidence passed on - Whether the 1991 amendment to Section 11B has retrospective effect as contended by the Departmental Representative - HELD THAT: - The Departmental Representative relied on an interpretation of the 1991 amendment to Section 11B and submitted that the amendment operated retrospectively, citing the Supreme Court's decision in S.S. Jain v. Union of India. The Tribunal held that the Supreme Court did not declare the amendment to be broadly retrospective; rather, the decision means that insofar as claims were pending, the amended provision could apply to those pending claims, with the practical consequence that where the assessee cannot show that the duty incidence was not passed on to customers, any refund sanctioned may go to the Consumer Welfare Fund. This consequence arises from subsequent changes in law and does not affect the Collector (Appeals) decision on limitation in the present appeal.Contention that Section 11B amendment is wholly retrospective rejected; amended provision applies to pending claims only and may lead to refund being directed to the Consumer Welfare Fund where applicable.Final Conclusion: Appeal dismissed. The Collector (Appeals) correctly held the demand time-barred for lack of a notice under Section 11A; the Departmental contention of general retrospectivity of the 1991 amendment to Section 11B is not accepted, save that the amendment may apply to pending claims with the consequence that refunds, if sanctioned and the incidence of duty is shown to be passed on, may be payable to the Consumer Welfare Fund as provided by law. The appeal was against the Collector (Appeals) order, which held that demand was barred by limitation as no notice demanding duty was issued under Section 11A. The Tribunal confirmed that demand for refund wrongly sanctioned must be made under Section 11A or Section 28. The appeal was dismissed, allowing for consequential refund if permitted by law.