TaxTMI 
TaxTMI 
2002 (2) TMI 132
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....997 (89) E.L.T. 247. Accordingly, the learned Counsel did not press the challenge to the said show cause notice dated 5-12-1988 (Exhibit-N in Writ Petition No. 2857/89) which pertain to rejecting the refund claim of the Petitioners. 3.Thus, the challenge in these petitions are restricted to various show cause notices issued by the Respondents under Section 11A of the said Act, seeking to recover the amounts erroneously refunded to the Petitioners. 4.The facts relevant for the purpose of the present petitioners are :- FACTS 5.The Petitioners are a public limited company and are engaged in the manufacture and processing inter alia of dyes and chemicals. The goods manufactured by the Petitioners are liable to excise duty under the said Act. 6.By an order dated 11th September, 1984 the Asstt. Collector of Central Excise, Kalyan Division inter alia held that post manufacturing expenses like interest charges and additional sales tax were not includible in the assessable value of the goods. In view of the reduction in the assessable value, the Petitioners became entitled to refund of excise duty on past clearances. As the amount of excise duty refundable on accoun....
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....he Government of India against the M.R.F. Judgment is against the Company." 9.Thus, it is clear that on the date when refund was granted and paid to the Petitioners, both the parties accepted the position that the issue of refund was not finalised and that the revenue would be entitled to recover the amount refunded, if the decision of the Apex Court was in favour of the revenue. 10.Accordingly, the Respondents after granting and paying the refund amount issued show cause notices under Section 11A of the said Act dated 31-10-1988 (Exhibit-K in Writ Petition No. 5770 of 1988), show cause notice dated 3-2-1989 (Exhibit-P in Writ Petition No. 2857 of 1989) and show cause notice dated 22-4-1989 (Exhibit-T in Writ Petition No. 3172 of 1989) and sought to recover the amounts refunded to the Petitioners on the ground that the refund granted was erroneous because (i) the review petition in the case of M.R.F. Ltd. was pending before the Apex Court and (ii) in view of the decision of this Court in Roplas (India) Ltd., refund cannot be allowed where duty is collected from the customer. The validity of these show cause notices are the subject matter of challenge in these three Writ Petitione....
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....e revenue in this case was perfectly justified in invoking the jurisdiction u/s. 11A within the period of 6 months from the date of refund. It was submitted that the Apex Court initially allowed the Review Petition, as reported in M.R.F. case as reported in 1989 (41) E.L.T. 703 by recalling its earlier decision reported in 1987 (27) E.L.T. 553 and finally decided the issue in favour of the manufacturers, as reported in 1995 (77) E.L.T. 433. It was submitted that when the issue was finally settled by the Apex Court in the year 1995, it could not be said that the show cause notices issued u/s. 11A of the said Act in the year, 1988 were without jurisdiction. It was submitted that during the pendency of these show cause notices, Section 11B of the said Act has been amended and in view of overriding provisions contained in Section 11B of the said Act, the issue of erroneous refund which are subject matter of these show cause notices have to be dealt with in the light of amended provisions of Section 11B of the said Act. 13.With these facts on record, the issues that arise for consideration in these petitions are :- ISSUES (i) When the ....
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....ed, if there are grounds existing such as short levy or short recovery of erroneous refund, etc. under the Scheme of the said Act. The only way by which an erroneously refunded duty could be recovered is by resorting to the powers conferred under Section 11A. The issuance of a notice under Section 11A is a primary and fundamental requirement for recovery of any money erroneously refunded. Section 11A is the fountain head of all the powers for recovery of any money erroneously refunded. There are no preconditions attached for issuance of notice under Section 11A for recovery of the amount erroneously refunded. There is no requirement of passing an adjudication order and if adjudication order is passed, there is no need to initiate appellate proceedings before issuing notice under Section 11A. Second proviso to Section 35A(3) which states that no order-in-appeal requiring the appellant to pay any duty erroneously refunded shall be passed unless the Appellant is given show cause notice within the time limit prescribed in Section 11A also shows that Section 11A is a independent substantive provision and it is a complete code in itself for realisation of excise duty erroneou....
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....hether there were grounds for invoking jurisdiction under Section 11A of the Act. In our opinion, the refund orders passed and the letter addressed by the Petitioners clearly show that the refund granted was conditional and subject to the decision of the Apex Court in the case of M.R.F. Ltd. If, ultimately, the Apex Court, in the case of M.R.F. Ltd. had upheld the case of the revenue, then the only course open to the revenue to recover the amount was by invoking jurisdiction under Section 11A of the said Act. In that event, even the undertaking given by the Petitioners could be enforced subject to the limitation prescribed under Section 11A. Therefore, the conditional refund orders passed in the matter, the undertaking given by the Petitioners and the conduct of the parties in treating the issue of refund to be pending and could be recovered by the revenue, subject to the decision of the Apex Court, clearly justify the action of the revenue in invoking jurisdiction u/s 11A of the said Act. The Petitioners having accepted the conditional refund order and having received the amount by giving an undertaking to refund the amount in case the decision of the Apex Court in the case of M.R....
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....ed v. Union of India & Ors. [1983 (13) E.L.T. 1495A (S.C.) = 1973 (3) S.C.R. 811]. All these factors, it is submitted, militate against giving retrospective effect to Section 11B. It is difficult to agree with the propositions in the light of the specific and clear language of the first proviso to the sub-section (1). The first provision expressly declares that "where an application for refund has been made before the commencement of the Central Excise and Customs (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) substituted by that Act". In the face of this proviso, it is idle to contend that sub-sections (1) and (2) of Section 11B do not apply to pending proceedings. They apply to all proceedings where the refund has not been made finally and unconditionally. Where the duty has been refunded under the orders of the Court pending disposal of an appeal, writ or other proceedings, it would not be a case of refund finally and unconditionally, as explained in Jain Spinners and I.T.C. It is, of course, obvious that w....
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....n 11A or Section 11B, as the case may be. However, if the final orders passed under sub-rule (5) are appealed against - or questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed - then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9B(5) re-agitating the issues already decided under Rule 9B - assuming that such a refund claim lies - and is allowed, it would obviously be governed by Section 11B. It follows logically that position would be the same in the converse situation. Again, while summarising the proposition, the Apex Court held in para 99(xi) as follows :- "99(xi) Section 11B applies to all pending proceedings notwithstanding the fact that the duty may have been refunded to the petitioner/plaintiff pending the proceedings or under the orders of the Court/Tribunal/Authority or otherwise. It must be held that Union of India v. Jain Spinners [1992 (61) E.L.T. 321 (S.C.) = 1992 (4) S.C.C. 389] an....
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....equential relief as in this case, the provisions of Section 11A or Section 11B are not applicable. There is no merit in this contention. First of all, in the case of Petitioners, the refund is not on account of adjustment after final assessment under Rule 9B(5) of the Central Excise Rules. Secondly, the Apex Court in Para 95 of the aforesaid Judgment itself held that if the final orders passed under Rule 9B(5) are appealed against or questioned in a Writ or Suit and on account of those decisions any refund arises as a consequence, then the same will be governed by Section 11B. The Apex Court has further clarified as follows :- "if an independent refund claim is filed after the final decision under Rule 9B(5) reagitating the issues already decided under Rule 9B - assuming that such a refund claim lies - and is allowed, it would obviously be governed by Section 11B. It follows logically that position would be the same in the converse situation." 21.Apart from that, the Apex Court in the case of Serai Kella Glass Works Pvt. Ltd. v. Collector of C.E., Patna reported in 1997 (91) E.L.T. 497 has further clarified that on finalisation of the assessment, if there is any deficiency....
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....with a conscious understanding that the amount may have to be returned to the revenue and the Petitioners accepted the amount of refund with a conscious understanding that the said amount may have to be refunded. Hence, issuance of the notice within the period of limitation was justified. 23.Mr. Nankani, then referred to various decisions of this Court and submitted that the plea of unjust enrichment is not applicable to the authorities created under the statute. It was submitted that the decision of this Court in the case of Roplas (India) Ltd. v. Union of India reported in 1988 (38) E.L.T. 27 which has been relied upon in the show cause notices, is not applicable to the case of the Petitioners. Mr. Nankani sought to make distinction between the refund claims made before the Excise authorities and the refund claim made directly by way of a writ. In our opinion, all these arguments are now academic in view of the amendment to Section 11B in 1991 and in view of the decision of the Apex Court in the case of Mafatlal Industries Ltd. (supra). As stated hereinabove, once it is held that the show cause notices issued are valid and the issue of refund was pending on the date when t....