TaxTMI 
TaxTMI 
2000 (5) TMI 474
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....s allowed by the Tribunal by Stay order No. 528/1197 dated 18-11-1997 prima facie the Bench holding that the appellants have made out a very strong case in their favour. Para 6 of the order is reproduced herein below: "6. We have considered the submissions made before us. It is now seen that the appellants have already been given the refund amount of Rs. 2,50,37,145. This is against the claim of Rs. 3,26,78,535 as per the BE No. 30675 dated 8-9-1992. The letters which are produced before us dated 9-6-1993 and 1-10-1993 prima facie show that this refund application was received on 5-3-1993. On a perusal of the stamps on it, prima facie the first endorsement of the appraising (Main) seems to have been put in the first instance. Thereafter only the other two stamps were affixed. This is the result of the prima facie examination of the documents before us. However, this will be subject to expert opinion if any or which may be asked or produced at the time of final hearing of the appeal itself. Therefore, there is prima facie evidence available on record to show the receipt of the application on 5-3-1993 and more particularly in view of tlie pre-audit and post-audit of the refund. Mo....
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....on No. 169/90 available for import under EPCG scheme. At the time of import, they contended that they had not placed any order nor had they imported accessories and spares. Therefore, they subsequently placed orders for supply of accessories and spares for the said Plants from the suppliers. At the time of clearance of the said spares under the three impugned Bills of Entry, the proper officer denied them the concessional rate of duty under the said Notification available under the said scheme and assessed the imported goods on higher rate of customs duty. The said assessment was made by the proper officer upon direction of the SIB, Madras who gave specific direction to the concerned group to treat the imported goods as spare parts and not accessories. The appellants, therefore, paid excess duty of Rs. 2,50,37,145/- on 1-10-1992 in view of the urgent need for the use in the plants and machinery. While doing so, they had sent a letter of protest dated 12-9-1992 to the Assistant Collector (SIB) Customs House, Madras indicating clearly to him that there is an urgent need to clear the goods to meet the export shipment dead line and therefore, they are paying duty at the rate assessed b....
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....Protest 7. Amount of Modvat credit availed from the additional duty of customs paid and now claim covered by the refund claim Not applicable 8. Ground of claim Import covered under EPCG Import Licence No. P/CG/2128959/SWP/21 CG/91 dt. 13-12-91 which was of by Customs. 9. Enclosures (No. of sheets should be specified against each claim). Importer's Purchase (a) Order-GD/1012/ HO/200 dt. 6-6-1991 (26 Pages). Supplier's Invoice - (b) A53-8007 dt. 8-6-1992 (2 Pages). Supplier's   Invoice - A53-8009 dt. 8-6-1992 (2 Pages) Triplicate copy of Bill of (c) Entry 30675 dated 8-9-1992 Working (d) sheet for difference in duty 10. Any further details that are deemed necessary and relevant to the claim. Shall be furnished as and when required. 11. Indicate whether personal hearing is required or not Yes required DECLARATION I, Yogesh Bakshi, the applicant representing the Importer M/s. Ballarpur Industries Limited, do hereby declare that what is stated above is true to best of my information and belief. I also declare (a) that the excess duty paid and claimed now for refund has been passed/has not been p....
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....gainst the said order passed by the Assistant Collector in terms of Section 128 of the Customs Act, 1962. However, Collector of Customs under Section 129D(2) of the Customs Act, 1962 called for examination of the proceedings of the Assistant Collector and filed review petition before the Collector (Appeals) for determining the points raised by him against the order in original of the Assistant Collector under the provisions of Section 28. 6. Ground raised by the Collector before the Collector (Appeals) were that duty had not been paid under protest in terms of the Bills of Entry as there was no endorsement to that effect. As per the procedure for payment of duty under protest, the importers before payment of duty had to seek permission from the Assistant Collector to pay duty under protest giving the reasons thereon. It is stated that the Assistant Collector after examination of the requests for protest permits the protest to be registered. The protest is registered in the register maintained for the purpose in the refund section of the Customs House and a serial number is allotted and the Bill of Entry is endorsed with the rubber stamp indicating that the protest has been ....
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.... due verification on his own on the basis of some material collected by the Collector (Appeals) came to the conclusion of forgery and held the claims to be time barred. These findings are contested as the appellants challenge the findings of the Collector (Appeals) of forgery in putting the seal of 5-3-1993, without disclosing as to how the forgery was committed and without disclosing who had connived with the appellants in committing the forgery and manipulating both the stamps of Appraising refund section over and above the stamp of the Appraising main. The appellants contend that the findings of manipulation with mala fide intention by tampering and forgery were never alleged or stated in the reference claim and the various findings arrived at on that basis is on Collector (Appeals) own enquiry which is not provided in law and the procedure adopted in examining and recording evidence of Dy. Collector CB Durgaiya is challenged in this appeal. The procedure adopted by the Collector in straightaway filing the reference application under Section 129D without raising these questions by issue of show cause notice under Section 28 of the Customs Act, 1962 for recovery of erroneous refu....
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.... of the party is that the Collector (Appeals) has brushed aside the genuineness of the seal of the Collector of Customs on the refund claim is without bringing out the facts leading to forgery or manipulation. Their further contention is that the protest letter referred to above was never taken into consideration including the two letters received from the Customs House acknowledging the refund claim as having been filed on 5-3-1993 which are referred to above. They contend that they had lodged protest under Section 27 of the Customs Act. There is no procedure prescribed for lodging protest and the Collector (Appeals) reliance upon Public Notice for filing protest letter is not m terms of the law. As regards payment of duty made under protest they relied upon the following judgments wherein such letters were accepted as letters of protest: - (a) Executive Engineer Workshop Division, MP Electricity Board v. CCE as reported 1997 (94) E.L.T. 445 (S.C.) (b) Mafatlal Industries v. UOI - 1997 (89) E.L.T. 247 (S.C.) (c) India Pistons v. CCE - 1990 (46) E.L.T. 3 (S.C.) (d) India Cements v. CCE - 1989 (41) (E.L.T.) 358 (S.C.) (e) Roche Products v. UOI....
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....the refund application on 5-3-1993. It is contended that procedural matters pertaining to sending of the application from one department to another and the stamping by other department is of no consequence so long as the application has been filed within time. They referred to the subsequent acknowledgment dated 9-6-1993 received from the department admitting the application dated 5-3-1993 for refund. They also referred to another letter dated 1-10-1993 from the Assistant Commissioner acknowledging their claim on 5-3-1993. Therefore, the review petition stating that refund claim was not filed on 5-3-1993 but on subsequent date is totally incorrect. 10. We have heard Shri M. Venkataraman, Learned Counsel for the appellants and Shri Madanagopal Sr Central Govt. Standing Counsel for the Revenue. 11. The Learned Counsel for the appellants relied upon the citations and the grounds stated above and sought for allowing the appeal in terms of the submissions noted. The Learned Counsel for the department filed his written submissions by which he contended that the department has also filed criminal case which is pending in the competent criminal court. It is submitted that t....
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....3 replied to this letter. The AC after detailed investigation to their claim and also after visiting the factory along with the Chartered Accountant satisfying himself about the correctness of the claim passed the order in original on 9-2-1994 accepting the claim in the said order in original. He sanctioned refund claim of the excess customs duty collected on the remaining accessories for which C&F value was Rs. 1,86,35,996 under BE No. 30675 dated 8-9-1992. This amount was directed to be debited in the EPCG import licence No. P/CG/2128959. However, by the same order he rejected their claim for treating as accessories items of accessories for C&F of Rs. 18,74,670.00. The procedure laid down under law is that when erroneous refunds has been paid, the department is required to take up investigation and issue show cause notice within six months from the date of payment making out grounds for re-calling the amount in terms of Section 28 of the Customs Act, 1962 which is reproduced herein below : "When any duty has been levied or has been short-levied or erroneously refunded or when any interest payable has not been paid, part paid or erroneously refunded, the proper officer may : ....
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.... as the Collector has raised questions as to the correctness of the seal on the refund application, the procedure in such a case to be adopted was to hold a detailed enquiry by investigating authority under the provisions of Section 28 and thereafter issue show cause notice bringing out the evidence against the appellants pertaining to any ingredients of the provisions of Section 28 i.e. fact of erroneous refund by reason of collusion or any wilful misstatement or suppression by the importer or exporter or agent or employee of the importer or exporter. The parties will have to be given sufficient opportunity to reply and controvert or rebut to the detailed investigation or evidence relied upon in the show cause notice that would be issued under Section 28 for recovery of erroneous refund. In the present case, the Collector of Customs had only doubt in the form of certain suspicion in questioning the legality and propriety of the Assistant Collector in granting refund. In the authorisation letter in terms of Section 129D(4) the Collector of Customs has merely directed the AC of Customs, Review Cell, Customs House, Madras to file appeal on his behalf before the Collector (Appeals), M....
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....U section for generating acknowledgement. It is stated that if the claim has been received on 5-3-1993 then it should have been sent immediately thereafter to CPU section whereas this was sent only on 15-4-1993 to CPU Section. It is stated that no claims were sent to CPU section after 2-4-1993 and before 15-4-1993. The Assistant Collector has only stated the manner in which his understanding arose in respect of the refund claim processed. He has not unravelled the mystery about the genuineness of the seal or why it was received on 5-3-1993 and did not process it to the CPU Section before 15-4-1993 as no inward register is maintained. These are administrative matters or administrative lapses for which appellants cannot be blamed. So long as the seal on the refund application is genuine and that has not been challenged in the reference application filed by the Collector of Customs, before the Collector (Appeals), it cannot be held that there was a forgery committed by the appellants as held by Collector (Appeals). Pleas raised by the appellants that the proceedings are not sustainable under Section 129D is fully justified in terms of citations referred to. 16. The points or g....
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....ion under Section 11A of the CE Act. Therefore, the Tribunal held that all such notices will be out of tune legally. In the same context the Tribunal went on to observe this aspect of the matter in paras 5 to 17 as follows: 5. The Central Excises and Salt Act, 1944, has one section which authorises recoveries of duty erroneously refunded and this is Section 11A. It provides that (1)  When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded a Central Excise Officer, may within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. This is the fundamental and only authority in the law that permits the Central Excise Department to recover erroneously refunded duty; if any duty is refunded, and it is discovered that the refund was an error, the only procedure for recovering that duty is under Section 11A. The procedure in the section prescribes a notice; to be issued t....
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....can, by using this section, recover erroneously refunded duty or short levied duty for which no notice was issued within the time specified under Section 11-A, the primary and fundamental section, and the fountain-head of all the powers for recovery of any money erroneously refunded. Thus, by resort to Section 35-E, the department can recover erroneous refunds that have long become barred by limitation under Section 11-A, to say nothing of the fact that it is almost inconceivable that any notice issued by the Collector (Appeals) under Section 35-E, as he did in this case, could ever reach the assessee in time. All of them would be out of time and illegal. To argue that, because Section 35-E allows this procedure of application and determination by the Collector (Appeals), the department can recover such duties, is to enlarge the powes of the department in a way that sets Section 11-A at naught. It defeats the right process laid out in the Act. 10. The proper route of the right process laid out in the Act is only the one written in Section 11-A. This section prominently gives leave to the Assistant Collector to issue notices if any money representing duty is found to have be....
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.... secure and sure guard - it is a wall of defence. We must not breach it or attempt to scale it - it provides invaluable services, often in ways we do not always appreciate. 15. Section 35-A second proviso in fact is designed to protect the assessee from just such exactions as may be made when the department finds its demands under Section 11-A barred by time. It prohibits the Collector (Appeals) from passing an order requiring a person to pay any duty which he (Collector) may discover, during the appeal proceedings before him, has been short levied or erroneously refunded, unless a notice of demand to pay is issued to that person within the time-limit of 11-A. The time-limit of Section 11-A runs on a tight Schedule - its starting point to its finishing post is rigidly controlled. It must set out from the "relevant date" - no other date is permissible, whether it runs for six months or for five years. The time-limit "specified in Section 11-A" is not six months: it is "six months from the relevant date". A time-limit counted any other way would not be a "time-limit specified in section 11-A". 16. May be we have here a stand-off; a stalemate; and I can see no way roun....
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....e section has a time limit of five years if the erroneous refund was caused by fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act and rules made thereunder with intent to evade payment of duty. The Collector (Appeals) misunderstood the function of the time limit of Section 11A and thought it could be used in proceedings under Section 35E for counting the time limit within which the application should be filed. Filing of the appeal or the application within five years does not safeguard the demand from the time bar if a time bar has arisen and an order passed by the Appellate Collector under Section 35E cannot have the effect of nullifying Section 11A and its time limit. 7. The time limit of Section 11A governs the issue of the demand under that section and that section alone. It follows if no demand has been issued in accordance with Section 11A nothing can take its place. There is no evidence on record that demands were issued for the erroneously refunded money within the time limit prescribed by Section 11A. Therefore, the order of the Appellate Collector dated 22-9-1983 on the application of the Assis....
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....ke larger period of Section 28 by issuing show cause notice for short levy, for recovery of the duty. On examination of these provisions, it is seen that the aspect pertaining to non-levy, short levy and erroneous refund has been made an exclusive provision under Section 28 of the Act. All other aspects other than this, could be said to be covered by the provisions under Section, 128 wherein the limitation is to an extent of a period of 3 months and the Collector (Appeals) having further period to allow another 3 months. Independently, the Collector can invoke Section 129D where a period of one year is available to the Collector to appeal to the Tribunal. Under Sections 128 and 129D, the legislature has not restricted to any particular subject. It has given wide power to the Collector under Section 129D to call for and examine any decision or order passed by his subordinate adjudicating authority. But the provisions of Section 28 of the Act which restricts to only two matters pertaining to non-levy, short-levy and erroneous refund. However, the Collector has even more powers under the proviso to Section 28 to extend the recovery for five years under the stated conditions. Therefore....
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....sions and it is to be considered as an independent of the other provisions of the Act. 14.  The analogous provisions in the Central Excises and Salt Act, 1944, are Section 11A, 11B, Section 35, 35E, 35EE of the Act. Section 28 of the Customs Act is analogous to Section 11A of the Act as has been held in the case of International Computers Manufacturers Ltd. & Another v. Union of India [1981 (8) E.L.T. 632]. It has been held in this case by the Delhi High Court that if the show cause notice is not issued under Section 28 of the Customs Act, in absence of provisional assessment, within the stipulated time, then any demand raised would not be enforceable. The Supreme Court in the case of Gokak Patel Volkart Ltd. v. Collector of Central Excise, Belgaum [1987 (28) E.L.T. 53 (S.C.)] while examining the provisions of Section 11A of the Central Excises and Salt Act, observed in para 9 as follows - "No notice seems to have been issued in this case in regard to the period in question. Instead thereof an outright demand had been served. The provisions of Section 11A(1) and (2) make it clear that the statutory scheme is that in the situations covered by the sub-section (1), a notice....
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....hat it is almost inconceivable that any notice issued by the Collector (Appeals) under Section 35E as he did in this case could ever reach the assessee in time. All of them would be out of time and illegal. To argue that because Section 35E allows this procedure of application and determination by the Collector (Appeals), the department can recover such duties, is to enlarge the powers of the department in a way that sets Section 11A at naught. It defeats the right process laid out in the Act. The proper route of the right process laid out in the Act is only the one written in Section 11A. This section prominently gives leave to the Assistant Collector to issue notices if any money representing duty is found to have been lost by mistaken refund. There is no other course for the authorities to the recovery of such duty." 20.  In this case, the Department has not reopened the assessment under Section 28 nor filed an appeal after final assessment under Section 128 of the Customs Act, therefore, the Department cannot resort to Section 129D of the Act by preferring the review after the period of expiry as stipulated under Sections 28 and 128 of the Customs Act. The provisions....
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....ed his ground to hold that the order of review to be not legal and proper. It is the Assistant Collector who has merely observed that it surrounds with a ring of mystery which the Collector of Customs has not unraveled. The same was required to have been done by a detailed enquiry and the result of investigation brought out in the notice by citing evidence. There is no doubt about the seal on the refund claim being 5-3-1993 and affixed by the office of the Assistant Collector Customs House, Madras. This is also supported by the Assistant Collector (Appg. Refund Section dated 1-10-1993 calling upon the appellants to produce documents in which the claim has been referred to as 5-3-1993. The further letter dated 9-6-1993 of the AC (Refund) also referred lo this claim application dated 5-3-1993. In this view of the matter, and after going through the evidence, the pleas raised by the appellants that they had claimed the refund within the stipulated time of six months from the date of payment of duty in terms of Section 27 of the Customs Act, 1962 is required to be upheld. Further we notice that duty had been paid under protest in terms of letter 12-9-1992 addressed to the Assistant Col....