TaxTMI 
TaxTMI 
2023 (7) TMI 661
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...., Herbicides and Plant Growth Regulators and has established its unit at SIDCO Industries Complex, Samba. The respondent is registered for the manufacture of aforesaid products under Tariff Heading Nos. 38089330, 38089990, 38089090 & 38089340 respectively of the 1st Schedule to the Central Excise Tariff Act, 1985 ['the Act of 1985']. The respondent being eligible had been availing exemption/refund of excise duty under Notification No. 56/2002-CE dated 14.11.2002 as amended ['the exemption notification']. The respondent filed monthly claims of exemption for the period from 2005-06 to 2008-09 which was duly sanctioned by the appellant in favour of the respondent by passing separate orders for each month. The orders passed by the appellant for exemption/refund under the exemption notification were not assailed by the appellant-revenue and instead, the sanctioned amount was released in favour of the respondent. It seems that, during some investigation, the appellant noticed that, during the relevant period, the respondent had cleared the products Paushak/Joy and Kri-kelp on payment of duty by classifying the same under sub-heading 3808 9340 and claimed the benefit of exemption notifica....
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....e demand along with interest and penalty raised by the appellant herein was, thus, time barred; and, (ii) That the Revenue had not challenge the appealable orders sanctioning refund to the respondent herein before CESTAT and, therefore, those orders had attained finality. The demand could not have been raised under Section 11A of the Act without challenging the appealable orders. 4. The revenue did not accept the final order passed by the CESTAT accepting the appeal of the respondent and is, therefore, in appeal before us in terms of Section 35 G of the Act. 5. This Court vide its order dated 16.04.2019, after hearing both the sides, framed the following substantial question of law for determination in this appeal: "Whether the erroneous refund which was sanctioned under Notification No. 56 of 2002-CE can be recovered under Section 11A of the Central Excise Act, 1944 by invocation of extended period of limitation, where the refund was granted on the basis of any approval, acceptance and assessment relating to the rate of duty ? 6. Heard learned counsel for the parties and perused the material on record. 7. Mr. Jagpaul Singh, learned counsel appearing f....
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.... of grant of exemption and not a case of refund in the eye of law and, therefore, the provisions of Section 11A were not invocable. His further argument is that the orders sanctioning refund passed by the Revenue were indisputably appealable under Section 35 of the Act. The revenue did not file appeals and accepted the orders passed by the Assessing Authority and sanctioned the refund by passing separate orders for each month. He submits that, unless the orders sanctioning refund are reviewed or recalled, the same should be deemed to have attained finality. The refund sanctioned under such final orders cannot be termed as 'erroneous' and made subject matter of recovery by having resort to Section 11A of the Act. 9. To buttress his submissions, learned counsel relies upon a judgment of Gauhati High Court in the case of Commissioner of Central Excise Shillong vs. Jellalpore Tea Estate, 2011 (268) ELT 14 (Gau). Learned counsel goes a step further and submits that Section 11A of the Act can be invoked in the case of 'erroneous refund' and, therefore, for invoking Section 11A, the revenue is required to demonstratively show that the refund sanctioned in favour of the respondent was a....
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....d has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice- Provided that where 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 willful 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 by such person or his agent, the provisions of this sub section shall have effect 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 six months or five years, as the case may be. (1A) when 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 willful misstatement or suppression of facts or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, by such person or his agent, to whom a notice is served under the proviso to sub section (1) by the Central Excise....
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....eunder (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" 12. From a reading of Section 11A of the Act, it clearly transpires that when any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer, may within six months from the relevant date, serve a 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 to show why he should not be asked to pay the amount specified in the notice. Indisputably, in the instant case, the period of six months from the relevant date has since expired. To put it more clearly, the expression 'relevant date" is defined under sub-section 3 (ii) of Section 11A of the Act. Neither side has disputed that the limitation, provided for issuance of show cause notice in terms of sub-section 1 of section 11 A of t....
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....g to the manufacturing process and the product which it produced and passed on by payment of excise duty. Whether the product produced by the respondent is a Gibbereillic acid simplicitor or is a plant growth regulator containing Gibbereillic acid as dominant ingredient, is a question of fact which cannot be gone into by this Court hearing an appeal on a substantial question of law. Be that as it may, even if we were to assume that the revenue had erroneously made the refund of the excise duty in favour of the respondent, yet the period of limitation for issuing show cause notice in terms of sub-section (1) of section 11A of the Act, had since expired and, therefore, the entire process had become time barred. As already explained, the extended period of limitation as provided under provision to sub -section (1) of Section 11A was not invocable for the simple reason that the twin factors which are sine quo non for invoking the proviso were missing in the instant case. We are not convinced with the argument of Mr. Jagpaul Singh that not only the respondent had misstated/suppressed the facts with regard to the classification of the product in question, but had done so with an intent t....
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....een 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 Central Excise Officer may, within one year 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: Provided that where 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 willful 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, 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. ....
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....e order dated 29.4.2002 passed by the Assistant Commissioner of Central Excise, Silchar by resorting to the revisional power available under Section 35-E of the Act" 18. The expression 'willful suppression' also fell for determination of the Supreme Court in the case of Anand Nishikawa Company Ltd vs. Commissioner of Central Excise, Meerut, 2005 (188) ELT 149 (SC) wherein the Apex Court, after considering the provisions of Section 11A of the Act in para 27 held thus: "27. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutical Co. Vs. Collector of Central Excise, Bombay [1995 Suppl. (3) SCC 462], we find that "suppression of facts" can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty, when facts were known to both the parties, the omission by one to do what he might have done not that he must have done would not render it suppression. It is settled law that mere failure to declare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made herein above that there was no ....
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....ction 11A is invocable even in a case where there is no erroneous refund, rather the refund of the excise duty is pursuant to a speaking order passed by the Adjudicating Authority after following due process of law. Such order passed by the Assessing Authority is appealable under Section 35 of the Act or the competent Authority of the revenue may invoke Section 35E of the Act and direct the concerned Authority to take an appropriate remedy against such order sanctioning erroneous refund, if any, in favour of the assessee. 21. For the foregoing reasons, we find no illegality or infirmity in the final order passed by the CESTAT Chandigarh impugned in this appeal and, therefore, uphold the same. The substantial question of law framed by this Court vide order dated 16.04.20119 reproduced above is replied in the following manner: The refund of excise duty claimed by an assessee and sanctioned by the competent Authority vide its order under Notification No. 56 of 2002-CE which order has attained finality as not having been challenged before any appellate or revisional authority under the Excise Act cannot be termed as 'erroneous refund' and recovered by resort to section 11A ....