TaxTMI 
TaxTMI 
2009 (1) TMI 384
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....tioned. They paid back the amount by debit in PLA on four dates in June, 2004. The Divisional Assistant Commissioner directed the appellants to pay interest at applicable rate from the date of sanctioning rebate to the date of repayment of amount. The interest works out to Rs. 21,62,336/-. This amount was adjusted by the Assistant Commissioner against another amount due to the party vide Order-in-Original No. 46/2004 dated 10-12-2004. Against the said order of the Assistant Commissioner, the appellants approached the Commissioner (Appeals). The Commissioner (Appeals) passed the impugned order rejecting the appeal of the appellants. Hence, the appellants have come before this Tribunal for relief. The following submissions were made by the learned advocate. (a) The appellants informed the wrong payment of rebate before the department pointed out. This is not in dispute. There was no demand or Show Cause Notice directing the appellants under Section 11A of the Central Excise Act, to show cause as to why the interest should not be collected from the appellants on the amount of rebate paid back by them voluntarily. When the amount is paid voluntarily before the issue of show cause no....
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....ang.) (ii) Collector of Central Excise, Raipur v. Raja Ram Maize Products - 1998 (97) E.L.T. 157(Tri.-New Delhi) 4. The learned JCDR stated that the appellants had got rebate erroneously sanctioned. Therefore, for the period between the date of sanction and the date of repayment, they are liable to pay the interest and this interest has been adjusted by the Original Authority while sanctioning rebate in other cases. Since the interest is liable to be paid by the appellant, according to her, it is not illegal to adjust the same from the money, which the department owed to the appellants in terms of Section 11 of the Central Excise Act, which deals with recovery of sums due to the Government. The assessee himself accepted the erroneous sanction of rebate and voluntarily paid it. Hence, the issue of show cause notice does not arise. 4.1 The interest liability automatically flows with the erroneous refund and hence the issue of notice is not required. Department has construed this as repayment of amount of duty erroneously refunded under Section 11A(2B), wherein it is also explicitly laid out that on receipt of such information, department should not serve any notice under sub....
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....To examine the legality of the impugned order, we should keep in mind the facts of this particular case with reference to the relevant legal provisions without being carried away by the several decisions cited by the appellant. 5.3 The rebate is nothing, but the refund of Central Excise duty paid on the goods exported. Hence, sanction of rebate is equivalent to sanction of refund. If refund is sanctioned and later it is found out that a mistake has happened, it is called an 'erroneous refund'. The provision for recovery of erroneous refund is contained in Section 11A of the Central Excise Act. For clarity, we are reproducing Section 11A here : SECTION [11A. 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....
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....) The [Central Excise Officer] shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. [(2A) Where any notice has been served on a person under sub-section (1), the Central Excise Officer, - (a) in case 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 wilful mis-statement 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, where it is possible to do so, shall determine the amount of such duty, within a period of one year; and (b) in any other case, where it is possible to do so, shall determine the amount of duty of excise which has not been levied or paid or has been short-levied or short-paid or erroneously refunded, within a period of six months, from the date of service of the notice on the person under sub-section (1). (2B) Where a....
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....cisable goods removed during the period to which the said return relates, is to be filed by a manufacturer or a producer or a licensee of a warehouse, as the case may be, the date on which such return is so filed; (B) where no periodical 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.] 5.4 When the departmental officers noticed that a refund has been sanctioned by mistake, the above provision enables them to recover it by way of issue of a notice. A notice is issued in order to comply with the Principles of Natural Justice. Suppose, the assessee himself finds out that he received refund by mistake, what is to be done? In this connection, we should examine Section 11A (2B) which is highlighted above. The above provision 2B h....