TaxTMI 
TaxTMI 
2016 (4) TMI 688
X X X X Extracts X X X X
X X X X Extracts X X X X
....f law : "Whether the first respondent is right in holding that as per para No.95 of the decision of the Apex Court in the case of Mafatlal Industries Ltd. Vs. UOI [1997 (89) ELT 247 (SC)] if the provisional assessment finalisation orders passed under Rule 9B(5) of the Central Excise Rules, 1944 are appealed against and are allowed, then any refund claim arising as a consequence of the decision in appeal would be governed by Section 11B of the Central Excise Act, 1944 even when the order of the Appellate Authority is also the order of finalisation of provisional assessment ? i.e. where the appellate order is a continuation of finalisation of the provisional assessment (vide para No.7 of the impugned order) ?" 4. However, when the appeal came up for hearing on 23.4.2015, this Court framed an additional substantial question of law to the following effect: "Whether the first respondent is right in holding that there can be a demand notice under Section 11A of the Central Excise Act, 1944 by the Original Authority for alleged erroneous refund (earlier granted by the same Original Authority) without reviewing at all the refund order of the Original Authority by the Superior Auth....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ia [1993 (65) ELT 186]. Without reference to the order of the Commissioner (Appeals), the Assistant Commissioner finalised the provisional assessment by an order dated Nil/4/1998, including a sum of Rs. 9,30,499/- towards cost of distribution and interest on inventory and arrived at the refund to be made to the extent of Rs. 12,61,864/-. (vi) Thereafter, the appellant filed an application for refund and by the proceedings of the second respondent dated 29.9.1998, the appellant was informed of the sanction accorded by the Assistant Commissioner for the refund of a sum of Rs. 3,31,365/-. (vii) In the meantime, the assessee filed an appeal against the finalisation of assessment made on Nil/4/1998, but the same was closed by the Commissioner (Appeals) by an order dated 30.11.1998 in view of the refund order already passed. (viii) Thereafter, a show cause notice dated 24.3.1999 was issued by the very same Assistant Commissioner, who accorded sanction for refund in terms of Section 11A, holding that there was an erroneous refund of Rs. 3,31,365/-. This was followed by an Order in Original dated 21.6.1999 directing the recovery of the refund already made. This Order in Original h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if, for the words one year, the words five years were substituted : Provided further that where the amount of duty which has not been levied or paid or has been short levied or short paid or erroneously refunded is one crore rupees or less a notice under this Sub-Section shall be served by the Commissioner of Central Excise or with his prior approval by any officer subordinate to him. Provided also that where the amount of duty which has not been levied or paid or has been short levied or short paid or erroneously refunded is more than one crore rupees, no notice under this Sub-Section shall be served without the prior approval of the Chief Commissioner of Central Excise. Explanation- Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be. (2) 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 pers....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Powers of Board or Commissioners of Central Excise to pass certain orders. (1) The Board may, of its own motion, call for and examine the record of any proceeding in which a Commissioner of Central Excise as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order. (2) The Commissioner of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Central Excise in his order. (3) No order shall be made under Sub-Section (1) or Sub-Section (2) a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l exemption from duty; or (e) whether the value of any goods for the purposes of assessment of duty of excise shall be enhanced or reduced by the addition or reduction of the amounts in respect of such matters as are specifically provided in this Act." 15. As could be seen from Sub-Section (2) of Section 35E, the Commissioner of Central Excise has a suo motu power of revision, to call for and examine the record of any proceedings, in which, an Adjudicating Authority, subordinate to him, has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order. 16. Interestingly, the power of revision under Sub-Section (2) of Section 35E is not a normal power of revision, under which, the Revisional Authority could, by itself, correct the error on the part of the Subordinate Officer. The power available under Sub-Section (2) of Section 35E is a limited power and that power extends only to a direction to such Authority to apply to the Commissioner (Appeals) for determination of such points. 17. In other words, the power of revision available under Section 35E(2) is limited to the extent of directing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Central Excise Vs. Gillooram Gaurishankar [MANU/JH/0088/2002] (vi) Commissioner of Central Excise Vs. PRICOL Ltd. [(2015) 320 ELT 703 (Madras)] and (vii) Commissioner of Customs & Central Excise Vs. Panyam Cements & Minerals Industries Ltd. [(2016) 331 ELT 206 (AP)]. 22. In contrast, Mr.Raghavan Ramabadran, learned counsel for the appellant/assessee placed strong reliance upon the judgment of this Court in Madurai Power Corporation Vs. DCCE [(2008) 229 ELT 521]. 23. Before we look into the decisions relied upon by the learned counsel on both sides, it would be appropriate to recollect the facts that we have left far behind. As we have stated earlier, the Order in Original, passed n 22.12.1997, covered various issues, one of which related to abatement towards cash discounts. The Original Authority followed the decision of the Supreme Court in Addison & Co. Ltd. [(1997) 91 ELT 532], wherein it was held that turnover discount was an admissible abatement and should be known at the time of removal. This Order in Original was set aside by the Commissioner (Appeals) by the order dated 3.4.1998. In the said order, the Appellate Authority recorded a finding of fact to the eff....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r, the show cause notice was in accordance with the provisions of law and unassailable. 28. But, a careful look at the scheme of Sections 11A, 11B and 35E would show that an application for refund is not to be dealt with merely as a ministerial act or an administrative act. Under Section 11B of the Act, a person, claiming refund of any duty of excise and interest already paid, should make an application in the prescribed form. Such application is to be made within the period of limitation prescribed under Sub-Section (1) of Section 11B. The application should be accompanied by such documentary or other evidence, in relation to which, such refund is claimed. Sub-Section (2) of Section 11B mandates that upon receipt of any application for refund, the Assistant Commissioner or Deputy Commissioner, if he is satisfied that the duty is refundable, should make an order. The refund order is capable of being given effect to in several methods including adjustment or rebate of duty of excise, all of which are prescribed in Clauses (a) to (f) under the Proviso to Sub-Section (2) of Section 11B. 29. Sub-Section (3) of Section 11B, which contains a non-obstante clause, makes it clear that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gly, the authority, given under Section 11A(1) for recovery of any refund erroneously paid, is upon the Central Excise Officer. The expression used in Clause (a) in Sub-Section (1) of Section 11A is 'Central Excise Officer'. 35. The expression 'Central Excise Officer' is defined in Section 2(b) to mean the Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise, Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or any other officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act. 36. Therefore, an order of recovery can be passed under Section 11A even by an Assistant Commissioner, as he happens to be a Central Excise Officer in terms of Clause (a) in Sub-Section (1) of Section 11A. In contrast, the processing of an application and the passing of an order on an app....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Therefore, when an objection was taken that after clearance under Section 47, the provisions of Section 124 cannot be invoked, the Supreme Court pointed out that fraud vitiates all solemn acts. That is not the type of case that we are dealing here. 41. In so far as the decision of the Full Bench of the Tribunal in Asian Paints (India) Limited is concerned, the difficulty faced by the Tribunal was the different periods of limitation prescribed under Sections 11A and 35E. The case before the Full Bench of the Tribunal in Asian Paints (India) Limited was on the reverse. As seen from paragraph 1 of the decision of the Full Bench, the only issue referred for the consideration of the Larger Bench revolved around the limitation prescribed in Section 35E(3) and Section 11A. We are not dealing with a case where there is a logjam between two different provisions. Therefore, the said decision, which was also confirmed by the Supreme Court in Asian Paints (India) Limited [(2002) 142 ELT 522], cannot be of any application. 42. No one can have a quarrel with the proposition that Sections 35E and 11A operate in different fields and are invoked for different purposes. We are merely concerne....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to Section 11A. What cannot be done directly cannot be done indirectly also. 48. In so far as the decision of the Andhra Pradesh High Court is concerned, one observation made in paragraph 16 of the said decision is of prime importance. In paragraph 16, the Andhra Pradesh High Court has made it clear, after analysing Sections 11A and 11B that there is an adjudication process involved in the processing of applications made under Sections 11A and 11B. The Andhra Pradesh High Court held that orders passed under Sections 11A and 11B are appealable. Therefore, the decision of the Andhra Pradesh High Court, especially the observations in paragraph 16, should be made use of by the assessee to contend that since there was no appeal against the order under Section 11B, the Department cannot take recourse to Section 11A. 49. In Madurai Power Corporation, this Court had an occasion to consider the interplay of Sections 11A and 35E of the Act. In the said case, show cause notices issued to the Corporation as to why excise duty payable on low sulphur heavy stock and furnace oil should not be demanded, came to be challenged. The show cause notices were issued under Section 11A of the Act.....