TaxTMI 
TaxTMI 
2021 (4) TMI 226
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....046/2020 and WP(C) No. 4194/2020. CEMENT INTERNATIONAL LTD., M/S. DIGBOI CARBON PVT. LTD., PAN PARAG INDIA LTD., M/S JUMBO PACKAGING INDUSTRIES, MODI MUNDIPHARMA BEAUTY PRODUCTS PVT. LTD. FORMERLY KNOWN AS KAMAKHYA COSMETICS AND PHARMACEUTICALS LTD., M/S KESHARI INDUSTRIES, M/S JOYSHREE POWEROL, KAMLANG SAW AND VENEER MILLS PVT. LTD., BARAK VALLEY CEMENTS LTD., M/S. BULLAND CEMENT PVT. LTD., OZONE PHARMACEUTICALS LTD., M/S. K.D. CEMENTS, M/S BRAHMAPUTRA CARBON LTD., M/S PURBANCHAL CEMENT LTD., M/S. B.R. METTALICS, MR G N SAHEWALLA, KAMAKHYA PLASTICS PVT. LTD., M/S AHINSHA CHEMICALS LTD., ASSAM CARBON PRODUCTS LIMITED, M/S. BARAK ISPAT PVT. LTD., M/S JSVM PLYWOOD INDUSTRIES LTD. (FORMERLY KNOWN AS M/S ARUNACHAL SAW AND VENEER MILLS PVT. LTD., GREENPLY INDUSTRIES LTD., M/S GATTANI POLYMERS, M/S NEW AGE PETCOKE PVT. LTD., NORTH EAST ROOFING (P) LTD., M/S K.D. COKES, UPPER ASSAM PETROCOKE PRIVATE LIMITED, M/S. K.D.IRON AND STEEL CO., M/S PRAG ELECTRICALS PVT LTD, M/S JUMBO ROOFING AND TILES, M/S GUWAHATI CARBON LIMITED, M/S. PCL CEMENT AND PIPE INDUSTRIES, M/S OZONE AYURVEDICS, M/S RIVER VALLEY CEMENT CORPORATION, JUDGMENT & ORDER (CAV) Heard Dr. A. Saraf, learned senior counsel ass....
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....mount of Education Cess and Secondary and Higher Education Cess, which were refunded to the petitioners should not be recovered under the Provisions of Section 11A(i) of the Central Excise Act, 1944, (hereinafter known as the "Act") and further as to why interest should not be charged and realized in terms of Section 11AA of the Act. The show cause notices were issued in view of the Judgment and Order of the Apex Court in M/S Unicorn Industries -Vs- Union of India reported in (2020) 3 SCC 492 whereby an earlier Judgment of the Apex Court, namely, SRD Nutrients Pvt. Ltd. -Vs- Commissioner of Central Excise, Guwahati reported in (2018) 1 SCC 105 have been declared to be per incuriam. According to the Department, the refunds sanctioned to the petitioners earlier were made pursuant to the Judgment of the Apex Court in SRD Nutrients Pvt. Ltd. (supra) and the said Judgment having been held to be "per incuriam" by the Apex Court in the recent Judgment of M/S Unicorn Industries -Vs- Union of India; the refunds earlier granted to the petitioners on the strength of the Judgment in M/S SRD Nutrients (supra) have become "erroneous refunds" and, therefore, the same are sought to be recovered fr....
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....Park or Industrial Estates or Industrial area or Commercial Estate, as the case may be, specified in the Annexure appended to the said notifications from such of the excise or additional duty of excise leviable thereon as is equivalent to the amount of the duty paid by the manufacturer of goods from the account current maintained under Rule 9 read with Rule 173 G of the Rules. The exemption contained in the said notification was made applicable to only new Industrial Units which commenced their commercial production on or after the 24th Day of December, 1997 and to the Industrial Units existing before the 24th day of December but which undertook substantial expansion by way of increase in the installed capacity by not less than 25% on or after the 24th day of December, 1997. The exemption contained in the said notifications in terms of para 4 of the Notification was made applicable to any of the above stated Industrial units for a period not exceeding 10 years from the date of publication of the Notification in the official Gazette or from the date commencement of commercial production, which ever was later. 13. The Government of India on 01.04.2007 announced a new Policy, namely,....
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.... Central Excise Tariff Heads and Sub-heads. The particulars regarding the industrial units set pup by the petitioners are described in details later in this Judgment,. 16. All the petitioners are stated to be duly registered with the Central Excise Authority in accordance with the provisions of Central Excise Act, 1944. The goods manufactured at the petitioners' Plants/factories are cleared upon payment of Central Excise duties leviable thereon after due compliance of all required procedural formalities under cover of appropriate Central excise invoices. The petitioners had been claiming exemptions under Notification No. 20/2007-CE dated 25.04.2007, as amended, by way of refund excise duty through Account Current in respect of the above mentioned final products w.e.f. 25.11.2011. 17. By Finance Act, 2004, the Parliament levied Education Cess by way of the Finance Act, 2004. Education Cess was levied on goods specified in the First Schedule of the Central Excise Tariff Act, 1985, being goods manufactured or produced on which there shall be a duty of excise i.e. Education Cess, @ 2% calculated on aggregate of all duties of excise (including special duty of excise or any other duty ....
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....taining to entitlement of industrial units like the petitioners towards refund of Education Cess and Secondary and Higher Education Cess paid by the petitioners when the basic excise duty was exempted from the levy, was finally decided by the Apex Court in M/S SRD Nutrients Pvt. Ltd. Vs. Commissioner of Central Excise, Guwahati reported in (2018) 1 SCC 105. 18. The Apex Court by the Judgment and Order dated 10.11.2017 in "M/S SRD Nutrients (supra)" decided the issue by holding that the appellants were entitled to refund of Education Cess and Secondary and Higher Education Cess which were paid along with excise duty as the excise duty itself was exempted from levy. In the said Judgment, the Apex Court held that Education Cess is payable on excise duty and those assessees who are required to pay excise duty have to shell out Education Cess as well. It was further held that Education Cess was introduced by Sections 91 to 93 of the Finance (No. 2) Act, 2004 and as per Section 91 thereof, Education Cess is the surcharge which the assessee is required to pay. The Apex Court held that Section 93 of the Act of 2004 made it clear that Education Cess is payable on the 'excisable goods' i.e.....
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....pex Court passed in SRD Nutrients (Supra) as well as the directions of this Court, the Assistant Commissioner, the respondent No. 3 herein, passed respective Refund Orders on various dates sanctioning the refunds claimed by the petitioners as Education Cess and Secondary and Higher Education Cess for the relevant periods. The said amounts sanctioned were subsequently refunded to the petitioner. 23. Pursuant to the refund orders sanctioned by the Department, the Apex Court while dealing with similar issues, in a recent judgment rendered in the case of Unicorn Industries -Vs- Union of India, held that in the absence of notifications containing an exemption to additional duties in the nature of Education Cess and Secondary & Higher Education Cess, it cannot be said that same are exempted. The Apex Court held that in Union Of India & Ors -Vs- M/S Modi Rubber Limited reported in (1986) 4 SCC 66, and in Rita Textiles Pvt. Ltd. and Ors. -Vs- Union of India reported in (1986) Supp SCC 557 had already laid down the law and the subsequent judgment rendered by the Apex Court in the case of SRD Nutrients(supra) being contrary to the view taken earlier, was held to be per incuriam. The Apex Co....
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....e and sale of Pan Masala and Pan Masala containing tobacco Rs. 1,93,05,728/ F.No.V(18)01/A CJ/REF/2018- 19/327 Dated 10.02.2020 Assistant Commissioner, CGST, Division Jorhat. 3 WP(C)/1780 /2020 M/S. DIGBOI CARBON PVT. LTD. Vs. UNION OF INDIA & 2 ORS. Office and factory at Borguri Industrial State, Borguri, Tinsukia, Assam,Pin- 786126 excisable goods viz. Calcined Petroleum Coke E.Cess + S&HE Cess= Dt.15.11.18 Rs. 34,41,786/- Dt. 05.12.18 Rs. 3,37,922/-Dt. 13.09.19 Rs. 10,63,719/- 06.02.2020 No. F.No.V(15)06/S CN/DCPL/ACT/2019-20 Assistant Commissioner, Central Goods & Service Tax, Tinsukia. 4 WP(C)/2872 /2020 M/S OZONE AYURVEDICS, UNIT-II Vs. UNION OF INDIA & 4 ORS Office and factory at EPIP, Amingaon, Guwahati, Dist- Kamrup, Assam- 781031 Ayurvedic Extracts, Cosmetics or Toilet Preparation and Medicaments of Ayurvedic Rs. 20,10,048/- C.No. V (18)10/SCN- CESS/OZONE AYURVEDICS- II/ACG-I/2020 dated 02.06.2020 Assistant Commissioner Guwahati, Assam. 5 WP(C)/2899 /2020 M/S GUWAHATI CARBON LIMITED Versus THE UNION OF INDIA AND 2 ORS. Office and factory at NH- 37, Pub- Boragaon, Gorchuk, Kamrup(M), Guwahati- 781035, Assam. Calcined Petroleum Coke (CPC) Dt.13.0....
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....INDIA AND 4 ORS Office and Factory at EPIP, Amingaon, Guwahati, Dist- Kamrup, Assam- 781031 Ayurvedic Medicaments Rs. 49,23,097/- C.No.V(18)18/S CN-CESS/Ozone Ayurvedics/ACG -I/2020 dated 02.06.2020 Assistant Commissioner , Guwahati, Assam. 13 WP(C)/2951 /2020 M/S. BARAK ISPAT PVT. LTD. Vs. UNION OF INDIA AND 4 ORS Office at Mohanpur Road, Srikona, Silchar- 26 and Factory at Dag No. 187 & 188 of 2nd R S Patta No. 15 & 161, Mouza Srikona, Dist- Cachar, Assam. M. S and H.S.D. Rod Rs. 3,59,344/- C.No.IV(10)20/ E.CESS/Refund/ ACS/2019/707 dated 09.06.2020 Assistant Commissioner, Silchar, Assam. 14 WP(C)/3049 /2020 M/S BARAK ALLOY Vs UNION OF INDIA AND 4 ORS Office at Mohanpur Road, Srikona, Silchar- 26, Assam and Factory at Mouza Srikona, Part- II, Pargana Rajnagar, Dist-Cachar, Assam. M. S. Ingot Rs. 22,49,076/- C.No.IV(10)11/ E.CESS/Refund/ ACS/2019/691 dated 09.06.2020 Assistant Commissioner, Silchar, Assam. 15 WP(C)/3087 /2020 UPPER ASSAM PETROCOKE PRIVATE LIMITED Vs UNION OF INDIA AND ANR Office at No. 2, Makum Pather, P.O. Margherita, Dist: Tinsukia- 786181, Assam Manufacture and sale of Calcined Petroleum Coke (CPC) E.Cess + SHE Cess= Rs. 13,63,56....
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....t- Jorhat, Assam- 785630 Excisable goods viz. Cement. Rs. 1,29,710/- C.NO. V(18)02/ACJ/R EF/PCL/2019- 20/216 dated 06.03.2020 Assistant Commissioner, CGST, Division Jorhat. 23 WP(C)/3298 /2020 BARAK VALLEY CEMENTS LTD Vs UNION OF INDIA AND 3 ORS Manufacturing unit at Dabendranagar, Jhoom Basti, P.O. Badarpurghat, Dist- Karimganj, Assam. excisable goods viz. Clinker and OPC/ PPC/ PSC Cement Rs. 1,66,22,535/- C.No.V(15)09/A DJ/CGST- HQRS/GHY/CE/ 2020 dated 27.07.2020 Joint Commissioner, GST & Central Excise Commissionera te, Guwahati. 24 WP(C)/3372 /2020 CENT PLY Vs UNION OF INDIA AND 2 ORS. Principal place of business at Mirza- Palashbari Road, Palashbari, Kamrup, Assam- 781128 plywood, block board, flush door and resin Rs. 85,24,563/- C.No.V(15)05/A DJ/CGST- HQRS/GHY/CE/ 2020/19510-11 dated 17.06.2020 Joint Commissioner, GST & Central Excise Commissionera te, Guwahati. 25 WP(C)/3386 /2020 M/S. BULLAND CEMENT PVT. LTD. Vs THE UNION OF INDIA AND 4 ORS. Office and factory at Village Bamungaon, Lanka, Dist- Nagaon, Assam. excisable commodities viz Cement (OPC & PPC) and Clinker Rs. 16,25,503/- C.No.V(18)247/ Refund/BCPL/A CG-II/2018 dated 28.07.2020 A....
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....I Division, Guwahati 32 WP(C)/3835 /2020 M/S. SHANDAR PAINTS INDUSTRY (UNITII) Vs UNION OF INDIA AND 4 ORS A sole proprietorship concern having their principal place of business at Shed No.11 & 12, Rani Industrial Area, Rani, Kamrup- 781131. Special Oxide Pigment, Damp Roof Powderfallin g Rs. 2,14,199/- V(18)23/SCN- CESS/Shandar- II/ACG-I/2020/2269 Dated 27.05.2020 alleged Rs. 2,14,199/-erroneous refund. Superintendent Technical-I 33 WP(C)/4031 /2020 M/S K.D. COKES Vs THE UNION OF INDIA AND 2 ORS Office at Village- Amerigog, 11th Mile, Jorabat, G.S. Road, District- Kamrup, Assam Excisable Goods i.e Coke Rs. 5,91,532/- C.No.V(18)167/ Refund/K.D.CO KES/ACG- II/2018 dated 17.09.2020 Assistant Commissioner, CGST, Guwahati Division- II. 34 WP(C)/4035 /2020 NORTH EAST ROOFING (P) LTD. Vs UNION OF INDIA AND 2ORS. Registered office at Bonda, Narengi, Guwahati- 781026, Assam excisable commodities under broad description of Articles of Asbestos Cement of Cellulose Fibre Cement Corrugated Sheets, AC Plain Sheet and Accessories Rs. 29,35,614/- C.NO.V(18)242/ REFUND/NERPL /ACG- II/2018/1035 dated 22.09.2020 Assistant Commissioner, CGST, Guwahati Division- II. 35 W....
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....P(C)/4947 /2020 GREENPLY INDUSTRIES LTD. Vs UNION OF INDIA AND 3 ORS Makum Road, Tinsukia, Assam and its manufacturing unit at Lapa Lampong, Tizit, Mon, Nagaland- 798602 and having one of its office at Makum Road, Tinsukia, Assam Plywood, Block Board, Flush Door etc. Rs. 1,31,28,902/- C.No.IV(9)02/D MR/GST/COMM R/ADJ/GREENP LY/2020-21 dated 04.06.2020 Commissioner, CGST, Dimapur, 25. Being aggrieved by the impugned Demand-cum-show cause notices issued, the present writ petitions have been filed assailing the said demand-cum-show cause notices and praying for appropriate orders seeking interference by this Court. 26. The common grounds urged by the writ petitioners assailing the impugned demand-cum-show cause notices are as under:- (i) That the refund of Education Cess and Secondary and Higher Education Cess which was granted to the petitioners was on the basis of law laid down by the Apex Court in the case of SRD Nutrients(supra) which was prevailing at that point in time, and therefore, it cannot be said to be erroneous refund simply on the ground that the Apex Court in the subsequent decision rendered in M/S Unicorn Industries(supra) held that judgment passed by t....
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....r under Section 11A(1) of the Act are wholly missing in the present case inasmuch as refund of Education Cess and Secondary and Higher Education Cess was neither 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 the Act or the rules made there under nor by reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of the Act or the rules made there under with intent to evade payment of duty. The only ground for issuance of the impugned show cause notices by the Department that the refunds were made erroneously is the finding of the Apex Court arrived at in the latter Judgment (M/S Unicorn Industries Ltd.) that the earlier Judgment i.e. M/S SRD Nutrients (Supra) has been rendered "per incuriam" as the said judgment did not take into consideration the earlier two Judgments of the Apex Court rendered in Modi Rubber(supra) and Rita Textile Pvt Ltd (supra). 27.3. The learned senior counsel submits that the Judgment held to have been rendered "per incuriam" by the Apex Court will not have any effect on the actions initiated und....
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....ng officer in fixing the amount of valuation of the property. Similarly 'erroneous judgment' means: 'One rendered according to course and practice of Court, but contrary to law, upon mistaken view of law, or upon erroneous application of legal principles". 31. The learned senior counsel submits that the said judgments of this Court rendered in Rajendra Singh(supra) came to be considered by a larger Bench as in a latter judgment, also rendered by Division Bench of this High Court, the view of the Division Bench of this Court in Daga Entrade Pvt. Ltd, reported in 2010 327 ITR 467 was perceived to be in conflict with the judgment rendered in Rajendra Singh(supra). The larger Bench in the case of Commissioner of Income Tax Vs. Jawahar Bhattacharjee, reported in 2012 (2) GLR 495, held that there was no conflict between the two judgments. It was held therein that incorrect assumption of facts or incorrect application of law as also non-application of mind and condition to follow natural justice will satisfy the requirement of the order being "erroneous". The learned sr. counsel, therefore, submits that since the refunds made earlier by the Department in terms of the judgment of the Apex....
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....erefore, the orders passed by this Court in the writ petitions have attained finality. The refunds granted to those petitioners on the basis of such orders being passed by this Court have been so done because the Department has accepted the direction of this Hon'ble court passed in the said writ petitions. Accordingly, they are estopped and barred from reopening the issues by way of the impugned show cause notices on the ground of change of law as declared by the Apex Court. 34. The further submissions of the learned senior counsel is that the impugned show cause notices have been issued in total contravention to the department circulars issued. The learned Sr. counsel submits that vide instructions, dated 09.01.2020, issued to all Principle Chief Commissioners/ Chief Commissions of Customs and GST, all Principle Directors General/Director Generals of Customs and GST, clear instructions were issued by the Department that any interim or final order decided against the review may be contested by final statutory appeal, writ appeal or review petition as the case may be and if the same is not possible, a self-contained SLP proposal may be forwarded to the Board on the aforesaid instru....
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....nts(supra). The learned Standing counsel submits that as the refunds made earlier were contrary to the law laid down in Modi Rubber(supra) and Rita Textile, therefore, the refunds will have to be considered to have been made erroneously. Under such circumstances the department has correctly sought the recovery of the refunds already granted by issuance of the show cause notices as has been done and which are impugned in the present proceedings. The learned Standing counsel submits that in that view of the matter, the refunds granted earlier being erroneous will have to be recovered under the provisions of Section 11A of the Central Excise Act, 1944. The learned Standing counsel submits that the show cause notices served upon the petitioners were also within the period stipulated under the statute. 36. In the affidavits filed, the Department denied the contentions of the petitioners that the recovery of refunds sought to be made is barred by limitation under the provisions of Section 11A of the Central Excise Act or that the impugned show cause notices issued by the Department for the recovery of the refunds of Education Cess and Secondary and Higher Education Cess are void and wit....
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....07 dated 25.04.2007, there was no provision for exemption of the Education Cess and Secondary and Higher Education Cess provided for. The refunds of the Education Cess and Secondary and Higher Education Cess were granted by the Department only in terms of the judgment of the Apex Court in SRD Nutrients (supra) which have now become erroneous in view of the later judgment of the Apex Court in M/S Unicorn Industries Limited (supra) whereby the earlier SRD Nutrients (supra) has been held to be per incuriam. The learned standing counsel for the respondents relied on the judgments of the Apex Court in the case of Assistant Commissioner, Income Tax, Rajkot -Vs- Saurashtra Kutch Stock Exchange Limited reported in (2008) 14 SCC 171 to support his contention that the judicial decision acts retrospectively. Where an earlier decision of the Court operated for quite some time, the decision later would have retrospective effect to clarify the legal position which was earlier not correctly understood. He submits that in view of the judgment of the Apex Court in M/S Unicorn Industries holding the earlier Judgment of the Apex Court in SRD Nutrients (supra) to be per incuriam, the legal position w....
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....fore, he submits that unless indicated in the Judgment itself, it will have retrospective effect. The learned standing counsel also referred to H.P. Nurpur (P) Bus Operators' Union reported in (1999) 9 SCC 559 to submit that once a Court came to the conclusion that the provisions are declared invalid, then the collections made thereunder also consequently stood invalid. He, therefore, submits that the law under which the refunds were made having been declared to be "per incuriam", the refunds granted thereunder would automatically become erroneous and therefore, the Department is duty bound to issue notifications for recovery under Section 11A as has been done in the present case. 39. The learned standing counsel for the respondents further submits that the decision of SRD Nutrients (supra) was on a pure and abstract question of law and, therefore, the principle of res judicata cannot be applied. For this purpose, he also relied on Union of India -Vs- Indian Railway SAS Staff Association reported in (1995) Supp. (3) SCC 600. It is the contention of the learned standing counsel that the principle of res judicata and settled assessment will apply only to the company M/S. SRD Nutrien....
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.... that the judgments of the Delhi High Court are erroneous, such judgments being on questions of fact would still operate as res judicata between the same parties in a subsequent suit or proceeding over the same cause of action." 41. The further contention of the learned standing counsel is that grant of refund to the petitioners will result in "unjust enrichment". He has referred to the Judgments of Apex Court in Mafatlal Industries vs. Union of India reported in (1997) 5 SCC 536; U.P. State Electricity Board v. City Board, Mussoorie reported in (1985) 2 SCC 16; I.T.C. Ltd. Vs. State of Karnataka reported in (1985) Supp SCC 476; Indian Oil Corpn. Vs. Municipal Corpn, Jullundhar reported in (1993) 1 SCC 333; Entry Tax Officer Vs. Chandanmal Champalal & Co. reported in (1994) 4 SCC 463 and Jindal Stainless Ltd. Vs. State of Haryana reported in (2017) 12 SCC 1 to support his contentions that refund can only be allowed when the claimant establishes that the tax burden has not been passed on to the end consumers. No refund can be granted to cause a windfall gain to any person when he has not suffered to burden of tax. As the petitioners have not disclosed that they have not passed on t....
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....cy notification issued by the Central Government in furtherance of the Industrial Policy. The claims of refund of Education Cess and Secondary and Higher Education Cess were rejected by the Department and against which appeals were filed before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT). The CESTAT also rejected the claims for refund of Education Cess and Secondary and Higher Education Cess. Ultimately, the issue relating to entitlement of refund of Education Cess and Secondary and Higher Education Cess paid, reached the Apex Court by way of several appeals. The Apex Court upon due examination of the entire matter by its Judgment dated 10th November, 2017 in "M/S SRD Nutrients Private Limited" (supra) held that the industrial units like the petitioners are entitled to refund of Education Cess and Secondary and Higher Education Cess when the basic duty of excise was exempted from levy. Pursuant to the said judgment of the Apex Court, the refunds claimed by the petitioners were granted by the department. Some of the petitioners were required to prefer writ petitions before this Court seeking such refunds in terms of the Apex Court judgment in SRD Nutrients (Supra).....
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....t paid or short-levied or short-paid or erroneously refunded.- (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful misstatement 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,- (a) the Central Excise Officer shall, within 88[two years] from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so 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; (b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of,- (i) his own ascertainment of such duty; or (ii) duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under Section 11-AA. (2) The person who has paid the duty under clause (b) of sub-section(1), shall inform the Central Excise Officer of such payment in wri....
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....a) of sub-section (1) or five years referred to in sub-section (4) 1[* * *], as the case may be.] (9) Where any appellate authority or tribunal or court concludes that the notice issued under sub-section (4) is not sustainable for the reason that the charges of fraud or collusion or any wilful misstatement 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 has not been established against the person to whom the notice was issued, the Central Excise Officer shall determine the duty of excise payable by such person for the period of 99[two years], deeming as if the notice were issued under clause (a) of sub-section (1). (10) The Central Excise Officer shall, after allowing the concerned person an opportunity of being heard, and after considering the representation, if any, made by such person, determine the amount of duty of excise due from such person not being in excess of the amount specified in the notice. (11) The Central Excise Officer shall determine the amount of duty of excise under sub-section (10)- (a) within six months from the date of notice where it is possible to do ....
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....of Section 11A after the due date by the person liable to pay duty and such interest shall be calculated from the date on which such duty becomes due up to the date of actual payment of the amount due. (3) Notwithstanding anything contained in sub-section (1), no interest shall be payable where,- (a) the duty becomes payable consequent to the issue of an order,instruction or direction by the Board under Section 37-B; and (b) such amount of duty is voluntarily paid in full, within forty-five daysfrom the date of issue of such order, instruction or direction, without reserving any right to appeal against the said payment at any subsequent stage of such payment.] 46. "ERRONEOUS REFUND" The provisions of section 11A in the context of the present proceedings have been invoked by the Department by treating the refunds granted earlier to the petitioners to have been granted "erroneously". A perusal of the provisions of Central Excise Act and the Rules framed thereunder reveals that the term erroneous has not been defined anywhere. In this context, it is relevant to refer to the Judgment of this Court rendered in Rajendra Singh(supra) wherein by referring to the Black's Law Diction....
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....ibunal in M/s. Steel Kraft, Panipat. We do not find any merit in the contention of the learned counsel as on the day when the appellate authority decided the appeals preferred by Free Wheels (India) Ltd., the decision rendered by the Tribunal in M/s. Liberty Footwear Co., had the field. If on a subsequent decision the Tribunal has taken a contrary view it would not make the proceedings that have been finalised far earlier and are based upon an earlier decision of the Tribunal either illegal or improper. If the contention of the learned state counsel is upheld. It would result into endless litigation as all matter finalised earlier on the basis of law then in existence and holding the field would need reconsideration if law changes in succeeding years. All matters that have been finalised shall be then reported thus, unsettling the settled matters, in any case, as mentioned above, the order passed by the appellate authority which was based upon the law then holding the field could not possibly be styled as illegal or improper. That apart, the Commissioner by powers vested in him by virtue of section 40 on his own motion can call for the record of any case pending or disposed of by a....
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....h Courts. The orders of assessment could not be said to be erroneous and prejudicial to the interest of the revenue. We are in respectful agreement with the view expressed by the Punjab & Haryana High Court (supra) that simply because the law has been changed or earlier law laid down has been reversed, that would entitled the revisional authority to reopen the earlier assessments. The learned Single Judge has not gone into this aspect of the matter." 47. Another Division Bench Judgment of this Court rendered similar findings in the case of Mahabir Coke Industries, reported in (2007) 4 GLR 515. It was held that even if subsequently the law is changed or reversed, the assessments already completed cannot be allowed to be opened as the law covering the field relating to exemption of tax to a new Industry at the time of passing of the order of assessment to be considered. 48. State of Harayana -Vs- Free Wheels (India) Limited reported in 1997 SCC Online P&H 1849 : (1997) 107 STC 332, the Hon'ble Punjab and Haryana High Court while dealing with the similar issue relate that a contrary view taken by the Tribunal in respect of proceedings finalized earlier which were based upon earlier ....
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....record of any case pending or disposed of by any Assessing Authority or appellate authority other than the Tribunal. The decision of the appellate authority that was set aside by the revisional authority as mentioned above was based upon the decision of the Tribunal, even though, therefore, the revisional authority was not reopening the case decided by the Tribunal, it virtually amounts to upsetting an order that is based upon the decision of the Tribunal. 49. The Bombay High Court while dealing with the similar issues upheld that the views of the Tribunal that the revisional jurisdiction by the Higher departmental Officers cannot be exercised in respect of orders passed by the Assessing Officer which are based on binding decision of the High Court. In this Context the relevant paragraphs of Commissioner of Income Tax -Vs- Paul Brothers 1992 SCC Online Bom 650 : (1995) 216 ITR 548 are extracted as under:- 5. That in view of the merger of the Income-tax Officer's order for the assessment year 1981-82 in appeal, revisional jurisdiction could not be exercised is a settled position having been concluded against the Revenue by several decisions of this court including CIT v. P. M....
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....ction of the Commissioner, therefore, was based on no material, either legal or factual which would have given him the jurisdiction to take action under Section 263 of the Income Tax Act'. 51. In the case of Malabar Industrial Co Ltd vs Commissioner of Income Tax, Kerala State, reported in (2000) 243 ITR 83, wherein it was held that every loss of revenue cannot be treated to be erroneous for the purposes of invoking revisional powers under Section 263 of the Income Tax Act. The Apex Court while dealing with the correctness of revisional powers invoked by the Commissioner of Income Tax held that scope of 263 covers loss of tax due to erroneous order, but does not cover loss of tax resulting from a valid order. 52. From the Judgments discussed above, it is seen that the term "erroneous" any error deviating from law. A change of law subsequently would not make an action taken earlier by Quasi Judicial Authority in terms of law as it stood then, to be held to be erroneous so as to enable the Departmental Officer to invoke powers under Section 11A of the Central Excise Act. On perusal of Section 11A reveals that the power under Section 11A for recovery of duties not levied or not paid....
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....ed (supra)" and sanctioned the refunds. As such, the contention of the Department that the refunds granted earlier were erroneous and could be recovered under Section 11A cannot be accepted. The grounds urged by the Department supporting impugned show cause notices do not satisfy the requirements of Section 11A(4). The Division Bench of this Court in Shri Rajendra Singh (supra) and Victor Cane Industries (supra) are binding precedents and I respectfully concur with the same. Therefore, the refunds granted earlier cannot be considered "erroneous" to invoke the powers under Section 11A of the Central Excise Act, 1944 only on the premise that the Judgment of the Apex Court in "M/S SRD Nutrients Private Limited" (supra) held to be "per incuriam" by the Apex Court subsequently in "M/S Unicorn Industries Private Limited". 55. Binding effect of a Judgment and Principle of Res Judicata It is also not disputed that in respect of the some of the petitioners since the refunds were not granted, writ petitions were filed before this Court and this Court by orders on different dates held that the petitioners were entitled to refunds claimed in terms of the judgment of the Apex Court in "M/S SRD....
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....arrived at by way of legal proceeding is sought to be reopened in the manner discussed above, the operative portions in the judgment viz-a-viz parties will attain finality. A subsequent change in law arrived at by a Court by way of the separate judicial proceeding, wherein the earlier law laid down has been held to be not a good law or that the earlier law will cease to have precedential value, will not ipso facto reverse the position of the party viz-a-viz their rights which were declared and concluded by way of an earlier judicial proceedings. 58. The question of the effect of actions taken under the judgment subsequently declared to be "per incuriam" came up for consideration before the apex court in the case of A.R. Antulay vs. R.S. Nayak & Anr, reported in (1988) 2 SCC 602, the apex court while dealing with the issue held as under: "183. But the point is that the circumstance that a decision is reached per incuriam, merely serves to denude the decision of its precedent value. Such a decision would not be binding as a judicial precedent. A co-ordinate Bench can disagree with it and decline to follow it. A larger Bench can overrule such decision. When a previous decision is s....
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....hich have attained finality will not be adversely affected by the contrary view now taken in the judgment in Madras Telephones [(1997) 10 SCC 226 : 1997 SCC (L&S) 1279] . Since the rights of such applicants were determined in a duly constituted proceeding, which determination has attained finality, a subsequent judgment of a court or tribunal taking a contrary view will not adversely affect the applicants in whose cases the orders have attained finality. We order accordingly. 60. The Apex Court in Bharat Sanchar Nigam Limited and Anr., -Vs- Union of India and Ors., reported in (2006) 3 SCC 1 held as under:- "22. A decision can be set aside in the same lis on a prayer for review or an application for recall or under Article 32 in the peculiar circumstances mentioned in Hurra v. Hurra [(2002) 4 SCC 388]. As we have said, overruling of a decision takes place in a subsequent lis where the precedential value of the decision is called in question. No one can dispute that in our judicial system it is open to a court of superior jurisdiction or strength before which a decision of a Bench of lower strength is cited as an authority, to overrule it. This overruling would not operate to ups....
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....necessary to reconsider the correctness of law laid down in that judgment. In fact, the overruling of a principle of law is not an outcome of appellate jurisdiction but a consequence of its inherent power. This inherent power can be exercised as long as a previous decree vis-à-vis a lis inter partes is not affected. It is the attempt to overturn the decision of a previous case that is problematic, which is why the Court observed that: [Cauvery (2) case [1993 Supp (1) SCC 96 (2)] , SCC p. 145, para 85] "85. ... Under the Constitution such appellate jurisdiction does not vest in this Court, nor can it be vested in it by the President under Article 143." 62. In yet another recent judgment, the Apex Court in Dr. Shah Faisal and others - Vs- Union of India and Anr., reported in (2020) 4 SCC 1, the issue of precedential value of a judgment came up for consideration while hearing an application wherein contesting parties were seeking a reference to be made to a larger Bench in view of the contention urged that the earlier judgment was rendered "per incuriam". The View of the apex court rendered in A.R Antulay(supra) has again been reiterated in this Judgment. 63. The Department....
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....s proposition. However, in the context of the present proceedings, this judgment will not come to the aid of the respondents as the judgment rendered by the Apex Court in SRD Nutrients was not reviewed by the Apex Court in M/S Unicorn Industries Limited although by the subsequent judgment, the earlier judgment was held to have been rendered "per incuriam". 65. In the Judgment of Assistant Commissioner, Income Tax, Rajkot -Vs- Saurashtra Kutch Stock Exchange Limited reported in (2008) 14 SCC 171 referred to by the respondents, relates to the power of rectification available to statutory authority under the Income Tax Act, 1961. The issue which arose before the Apex Court was whether non-consideration of a decision of the jurisdictional High Court or of the Supreme Court can be said to be a mistake apparent from the record. In this case, the Tribunal passed an order without taking into consideration of judgment passed by the jurisdictional High Court. Subsequently, an application for rectification was filed, by which the Tribunal rectified its earlier order. The Apex Court held that on the facts of that case that such course was available to the Tribunal under the provisions of the ....
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....by the petitioners have since been granted and presently there is no refund application pending with the Department insofar as the present petitioners are concerned. Under the circumstances, the directions of the Apex Court as well as the Gauhati High Court having been complied with, a finality of the issue inter-party has been arrived at. No appeal or review by the Department has been filed in respect of the refunds granted earlier. It is also evident from a perusal of the impugned show cause notices that there is no other ground on which the refunds have been treated to be erroneous except that the law under which the refunds were granted earlier has been held to be "per incuriam" by a later Judgment of the Apex Court rendered in "M/S Unicorn Industries" (supra). 67. The Officers of the Central Excise Department exercise Quasi judicial functions. The orders passed by the Department Officers being in exercise of Quasi Judicial powers cannot be co-laterally revoked/reviewed except when permitted under the Statute. It is seen that against sanction orders passed the concerned officers, the statute does not provide for any review of such order passed. However, under Section 35, there....
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....decides contesting issues and question by a forum other than a court. The determination has civil consequences. Explaining the meaning of quasi-judicial body in Indian National Congress (I) v. Institute of Social Welfare [Indian National Congress (I) v. Institute of Social Welfare, (2002) 5 SCC 685] , it was held that when any body of persons has a legal authority to determine questions affecting the rights of subjects and a duty to act judicially, such body of persons constitute a quasi-judicial body and decision given by them is a quasi-judicial decision. It would also be a quasi-judicial order if the statute empowers an authority to decide the lis not between the two contesting parties but also when the decision prejudicially affects the subject as against the authority, provided that the authority is required by the statute to act judicially. Further, what differentiates an administrative act from the quasi-judicial act is that a quasi-judicial body is required to make an enquiry before arriving at a conclusion. In addition, an administrative authority is the one which is dictated by policy and expediency whereas a quasi-judicial authority is required to act according to the ru....
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.... justice must be followed. The Act and power of judicial review vested with the constitutional courts provide sufficient safeguards, in the present context. 26. When we apply general principles of res judicata, the contention of the appellants that the person concerned should be permitted to double-dip and be entitled to a second round of litigation before the Foreigners Tribunal notwithstanding the earlier opinion expressed by the Foreigners Tribunal is farfetched, and completely unacceptable. The plea is fallacious and has no merit. This contention therefore must be rejected and fails. 27. As stated above, a person aggrieved by the opinion/order of the Tribunal can challenge the findings/opinion expressed by way of a writ petition wherein the High Court would be entitled to examine the issue with reference to the evidence and material in the exercise of its power of judicial review premised on the principle of "error in the decision-making process", etc. This serves as a necessary check to correct and rectify an "error" in the orders passed by the Tribunal." 68. In view of the above discussions, this Court holds that the refund granted/sanctioned earlier in terms of the Judg....
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....ery of duties, including NCCD, in cases where the assessees were not paying the same on the strength of the previous Judgment, specifically the Judgment in the case of Bajaj Auto Limited (supra). The circular further instructed that the subject Judgment may be brought to the notice of the Hon'ble Courts, wherein the similar issues are pending. Any interim or final order decided against the revenue may be contested by filing statutory appeal, writ appeal or review petition, as the case may be, in consultation with the Standing Counsel. If the same is not possible, a self-contained SLP proposal may be forwarded to the Board, as per extant instructions. In view of the circular, it is evident that the Board has instructed the officers to contest matters pending before the Hon'ble Courts by filing statutory appeal, writ appeal or review petition as the case as may be or in the alternative submit a proposal for filing SLP before the Apex Court. There is also no pleading/submission on behalf of the department as to the effect of the instructions issued on the departmental officers nor has any official communication been submitted before this Court to show that the circular has not been pr....
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....of the Constitution of India would not ordinarily interfere with the show cause notices issued, however, where a show cause notice has been issued by an authority wholly without jurisdiction or by way of wrongful usurpation of power, the person aggrieved need not be relegated to avail any statutory alternative remedy available. The Writ Court in exercise of judicial review can interfere with the show cause notices when the same is issued wholly without jurisdiction and/or wrong usurpation of power. In the facts of the present case, there is no dispute that the refunds granted earlier to the petitioners were in pursuance to judicial orders passed by the Apex Court in "M/S SRD Nutrients Private Limited" (Supra) and/or orders passed by this Court in writ applications filed by some of the petitioners. As held by the Apex Court as discussed above, declaration of judgment to be rendered "per incuriam" by latter judgment will not upset the binding effect of the judgment between the litigating parties. As the department sanctioned the refunds in terms of such orders passed in judicial proceedings between the assessees and the department, the same having attained finality cannot be reopened....