TaxTMI 
TaxTMI 
2019 (8) TMI 1546
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....I commenced commercial production in 2004 and is engaged in manufacture of MS Rods. Both the units are located at the same compound in Byrnihat, Meghalaya but hold separate Central Excise Registration since their inception. Bulk of the production of MS Ingots from Unit - I was cleared on payment of central excise duty to Unit - II, for use in the manufacture of MS Rods. The MS Rods manufactured by Unit - II were cleared on payment of central excise duty to interstate buyers based in Arunachal Pradesh and Assam. Both the Units were operating under the area-based exemption Notification No. 32/99 and claimed refund of the excise duty paid thereunder, on their respective finished goods cleared during the period 2004 to 2007 (the relevant period). Pursuant to a search conducted on 3 May 2007 at the factory and office premises of both the Units, along with the residence of one of their Director, followed by an investigation spanning over a period of 3 years by the DGCEI, Regional Unit, a common Show Cause Notice dated 21 January 2010 was issued. The investigation, basis which the SCN was issued, mainly focused on establishing three aspects i.e. (i) There was no movement of goods....
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...., as the buyers were non-existent and the question of recovery of any duty from the non-existent buyers did not arise. 3. The Learned Counsel for the Appellants (Units - I & II) has assailed the demands confirmed in the Order-in-Original on the following legal and factual grounds: A Contentions on legal points A1 The sanction of refund under Notification No. 32/1999 is a quasi judicial function and the same is subject to pre-audit/post audit in accordance with the Board's Circular No. 809/6/2005-CX dated 1st March 2005 unlike any other refund processed under Section 11B of the Central Excise Act. Therefore, each and every refund adjudication orders passed during the relevant period, were appealable orders. However, such refund adjudication Orders were not reviewed and appealed against in the manner prescribed under Section 35E of the Act. Since the refund adjudication orders have attained finality, parallel proceedings could not have been initiated for recovery of refund alleged to have been erroneously granted by invoking Section 11A of the Central Excise Act alone without reviewing such refund adjudication orders. It is a well settled law that something which....
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.... paid by the Appellant as no taxes/duties could be collected without the authority of law. In which case, the duty paid by Unit II acquires the character of a deposit and the same had to be refunded to Unit II applying the principles of restitution, more so when there was no case for unjust enrichment as the buyers of Unit II were allegedly non-existent. Reference in this regard is invited to the following decisions: (i) Parimal Roy Vs. Commissioner (Port), vide 2015 (318) ELT 379 (Cal. HC); (ii) M/s Geojit Bnp Paribas Financial Services Ltd reported in 2015-TIOl-1602 B. Contentions on factual points B1 No discrepancy in Production/Stock/Inputs Quantum of Production or electricity consumption at either of the Units has not been disputed/questioned in the entire proceedings, as evident from para 4.85 of the OIO. No variation found in stock of inputs/finished goods as at the date of search and neither is there any allegation as regards clandestine clearance of the goods produced. Under these circumstances the charge of paper clearance of the finished goods is ex-facie un-sustainable and devoid of substance. B1.1 Major inputs of Un....
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....heck Gate (enquired by DGCEI) was not at all coming between Byrnihat to Naharlagun (322 KM route) or Byrnihat to Dibrugarh, as Khanapara Check gate was relocated to Jorabat in January 2009. Hence before January 2009 there was no question of interception of goods at Khanapara, for routing to Naharlagun or Dibrugarh. The concerned Road Distance certificates issued by Assam State Transport Corporation dated 14/01/2016 and the concerned Sales Tax Check Gate Position in Assam in the mentioned two routes to Naharlagun from Byrnihat and route to Dibrugarh from Byrnihat are certified by the Commissioner of Taxes, Assam [Pages 80 to 85 of the Appeal Paper Book]. B3 Improper verification of Transport Vehicles in violation of the principles of natural justice Exact list of the said 117 No. of vehicle is not clearly apparent in the SCN. The annexure to the SCN at Page 530 to 542 refers to 159 cases but between Page 612 to 618 covers only 79 cases. Amongst those if repetition of cases are excluded then the number of vehicles are reduced to 51 only. Appellant tried to verify the vehicle number mentioned in the list from the concerned vehicle no. mentioned in the concerned invoi....
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....ssibility of recording of movements in respect of the 23 inter-unit consignments at any Sales Tax Check Post does not arise. Further, there was no check gate between Byrnihat, Meghalaya & Dibrugarh, Assam such that the 2 inter-state consignments to NESL (another group company based in Dibrugarh), could also be intercepted. Thus, allegation of non-recording of these consignments at Sales Tax Check Post as contended at para 4.88 of the OIO is also totally baseless. C1. Further, the investigations made with owners of the vehicles have been referred at para 4.46 of the OIO wherefrom it can be deciphered that only 4(Four) owners of the vehicles, namely Shri Harkanta Talukdar, ( Vehicle No. AS01B0824), Shri Baljeet Singh ( Vehicle No. AS01E 4176), Shri Bikash Jyoti Das ( Vehicle No. AS01D9967) & Shri Kanhaiyalal Pandey (Vehicle No. AXA 5884), were interrogated. But none of these four vehicles no(s) are referred in the list of above referred 25 consignments. Therefore, the observations have been generalized against Unit I & Unit II, without any verifiable independent evidence in support of the allegation as regards paper transaction between Unit I & Unit II so as to deny the refu....
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....of. Therefore, the excise duty collected from Unit - II could not have been retained under Article 265 of the Constitution and in any event, ought to have been refunded by applying the principle of restitution more so when there was no case for unjust enrichment as the buyers were allegedly non-existent. The issue can be looked at from another angle also. The grant of refund under the said notification is subject to such verification as may be deemed necessary by the jurisdictional Assistant Commissioner or the Deputy Commissioner of Central Excise. We would like to refer to a sample refund adjudication order passed under Notification No. 32/99 in favour of Unit - II of the Appellant. REFUND ORDER NO. R.302 F.NO. IV(10)329/SH.CEX.DIV/2006 Date 15.5.2006 1. M/s Byrnihat Ispat Pvt Ltd. Unit-II is an assessee holding Registration No. AABCB5768L-XM-002 engaged in the manufacture of excisable goods, viz. 1) Bars 2) Rods etc. They are availing exemption from payment of central excise duty in terms of Notification 32/99 CE dated 08.07.99 as amended and claiming refund of the excise duty paid in cash in respect of the final products viz. 1) Bars 2) Rods w.e.f. 01.02.2004.....
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.... DAS) ASSISTANT COMMISSIONER The refund sanctioning authority has caused necessary verification and satisfied itself as to the existence of the factory, commencement of commercial production therefrom and the eligibility of the Appellant to refund while sanctioning the refund under the said notification. It is now settled by the decision of the Guwahati High Court in the Amalgamated Plantations Private Limited case that refunds processed under Notification No. 32/99 are also covered by Section 11B of the Act. We find force in the contention of the Appellant that when such refund orders were not reviewed or appealed against under Section 35E(2) of the Act, and therefore, attained finality, no parallel proceedings for recovery of such alleged erroneous refund under Section 11A of the Act was maintainable as something which could not be done directly cannot be permitted indirectly either. This legal question had also fallen for consideration before the Madras High Court in Eveready Industries India case at para 4 thereof and was answered in favour of the assessee and against the revenue. The decision of the Tribunal in TDL Quinn case at para 6 thereof, set out herein below, also....
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.... laws to augment their point. I have gone through the said case laws and found that the ratio of these case laws is not applicable in the instant case." The adjudicating authority has not adduced any reason as there was none for not following the cited precedents. 6. Factually also we find that the investigation is half-hearted and full of infirmities for the reasons mentioned below. 6.1 Production/Stock/Inputs - None of these have been disputed by the revenue as tacitly evident from para 4.85 of the 'OIO' set out below. "It is also seen that the Noticees have made arguments in support of their defence on the basis of utilization of raw materials and consumption of High tension power supplied by the Meghalaya State Electricity Board. I have gone through the impugned SCN and it is seen in para 13, i.e., Result of Investigation, that "Noticees No. 1, 2 & 3 were involved in conducting a fraudulent and fictitious transaction with buyers by reporting much larger sales figures than what is actually sold by them." In para 12(i), the charge was of fraudulent sale; in para 14(i) of the SCN, the charge was regarding suppression and misrepresentation of the actual quantity o....
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....AS01F1721 9 259/16.06.2005 AS01L1675 AS01L1677 35 561/10.09.2005 AS01C7325 AS01C1095 10 266/18.06.2005 AS01G7649 AS01Q7579 36 563/12.09.2005 AS01E7865 AS01F7760 11 296/24.06.2005 AS01B8489 AS01D3485 37 565/14.09.2005 AS01A7695 AS01A7265 12 304/26.06.2005 AS25B8947 AS20B8917 38 566/16.09.2005 AS01L1675 AS01L7765 13 338/29.06.2005 AMK8567 AMK3567 39 568/18.09.2005 AS01D7804 AS01D7701 14 348/04.07.2005 AS01R4078 AS01E4176 40 571/20.09.2005 AS01R2731 AS01E2160 15 389/16.07.2005 AS01E8964 AS01E0914 41 572/21.09.2005 AS01C7325 AS01C7576 16 399/19.07.2005 AS25A6451 AS25D6651 42 574/22.09.2005 AS01C7325 AS01C7765 17 418/28.07.2005 AS25 2988 AS25 2988 43 576/23.09.2005 AS01R2731 AS01S2075 18 442/12.08.2005 AS01C0844 AS01C0811 44 578/23.09.2005 AS01P4847 AS01P1547 19 449/17.08.2005 AS01R4420 AS01K1420 45 579/23.09.2005 AS01R2731 AS01S2567 20 454/19.08.2005 AXA5884 AXA5884 46 580/23.09.2005 AS01C7325 AS01C2795....