Central Excise Act, 1944 – S. 11A and S. 35E – Central Excise Rules, 1944 – Rules 9 & 49 – Whether the separate notice under Section 11A of the Central Excise Act is necessary for the recovery of the amount, when an erroneous refund is granted through the speaking order is reviewed under Section 35E of the Act – Held: In the case of Asian Paints (India) Ltd., Supreme Court has specifically observed and held that Sections 35E and 11A of the Central Excise Act operate in different fields and are invoked for different purposes – Different time-limits are, therefore, set out therein – Once the order in original sanctioning the refund came to be set aside in a proceeding under Section 35E of the Act and the proceedings under Section 35E was initiated within the time prescribed under Section 35E of the Act, thereafter there is no question of any further notice under Section 11A of the Central Excise Act.
Allowing the appeal, the Court
HELD: 1. The short question which is posed for consideration before this Court is whether Notice under Section 11A of the Central Excise Act is necessary for the recovery of the amount when the refund granted is reviewed under Section 35E of the Act and whether a separate notice under Section 11A of the Act to be issued within the time limit prescribed under Section 11A and before the proceedings under Section 35E of the Act are initiated and/or the notice under Section 11A of the Act shall precede the proceedings under Section 35E of the Act? [Para 7][896-E-G]
2. While considering the aforesaid issue it is required to be noted that as such in the present case the original authority while passing the O-I-O allowed the refund. That the order-inoriginal sanctioning the refund was the subject matter of review under Section 35E of the Act. On merits the Reviewing Authority set aside the order-inoriginal sanctioning the refund. Therefore, as such stricto sensu it can be said to be giving effect to the order passed under Section 35E of the Act. As such the assessee is claiming the refund on the basis of O-I-O sanctioning the refund which as such has been set aside in the proceedings under Section 35E of the Central Excise Act. [Para 7.1][896-G-H]
3. Now so far as the submissions made on behalf of the Assessee relying upon the decisions of the Tribunal in the case of Re-Rolling Mills and Bajaj Auto Ltd that for refund of the duty a separate show cause notice under Section 11A of the Act is reviewed and that too within the time limit prescribed under Section 11A and that as such notice under Section 11A must precede within the time limit prescribed under Section 11A before the notice under Section 35E of the Act is concerned, as such the aforesaid issue is now not res integra in view of the direct decision of this Court in the case of Asian Paints (India) Ltd.. [Para 7.2][897A-C]
4. Before this Court in the case of Asian Paints (India) Ltd. the judgments of the larger Bench of the Tribunal were under challenge. The Special Bench of the Tribunal took the view that Section 35E and Section 11A operate in different fields and are invoked for different purposes and different time limits are therefore set out therein. This Court in the case of Asian Paints (India) Ltd. specifically negated and/or did not accept the submission on behalf of the assessee that the recovery of excise duty cannot be made pursuant to an appeal filed invoking the provisions of Section 35E if the time limit under Section 11A has expired. [Para 7.4][897-F-H]
5. The law laid down by this Court in the case of Asian Paints (India) Ltd. as such was binding on the High Court and despite the same was pointed out and pressed into service by the Revenue before the High Court, the High Court has without giving any reasons how the same is misplaced has ignored to follow the decision of this Court in the case of Asian Paints (India) Ltd. and rather has followed its earlier decision in the case of Bajaj Auto Ltd which admittedly was prior to the decision of this Court in the case of Asian Paints (India) Ltd.. [Para 7.5][898-A-B]
6. Once the order in original sanctioning the refund came to be set aside in a proceeding under Section 35E of the Act and the proceedings under Section 35E was initiated within the time prescribed under Section 35E of the Act, thereafter there is no question of any further notice under Section 11A of the Central Excise Act as observed by the Tribunal affirmed by the High Court on quashing and setting aside the order in original sanctioning the refund in exercise of powers under Section 35E of the Act which otherwise is prescribed under the Act within the time stipulated under Section 35E of the Act, thereafter necessary consequence shall follow and thereafter there is no question of any refund pursuant to order in original. [Para 8][898-C-E] Asian Paints (India) Ltd. v. CCE, Bombay 2002 (142) ELT522 (SC) – relied on.
M/s. J. K. Cotton Spinning & Weaving Mills Company Ltd. v. Union of India 1981 (8) ELT 887; Bajaj Auto Ltd. v. UOI 2003 (151) ELT-23 (Bom).; CCE,Chennai v. Sha Harakchand Samanthmal 2004 (177) ELT 990 (T); Collector of Central Excise, Bhubaneshwar v. Re-Rolling Mills 1997 (94) ELT 8 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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