ORDER
P.G. Chacko, Member (J)
1. These appeals are by the department, aggrieved by the sanction of two refund claims of the respondents by the lower appellate authority. After examining the records, I get the following facts. In Order-in-appeal No. 202/96 dated 17.6.96, the Commissioner (Appeals) held the aforesaid refund claims to be admissible to the assessee subject to Section 11B of the Central Excise Act, 1944. It was not appealed against by the department. Pursuant to the said Order-in-appeal, the Assistant Commissioner passed order dated 27.5.02 rejecting the refund claims as barred by unjust enrichment. Appeal preferred by the assessee against the said order of the Assistant Commissioner was allowed by the Commissioner (Appeals) by Order-in-Appeal No. 112/2003 dated 31.3.2003 holding that, in the facts of the case, the question of unjust enrichment did not arise. Consequently the original authority passed two orders, No. 79/03 dated 25.6.03 and No. 80/03 dated 26.6.03 allowing refund of a total amount of duty of over Rs. 4.3 lakhs to the assessee. Order-in-Appeal No. 112/03 ibid and the consequential orders of the original authority were also accepted by the department.
2. Subsequently, in March/May 2004, the department issued two show-cause notices alleging that the above refunds were erroneous on account of time-bar and proposing that the amounts be recovered under Section 11A of the Central Excise Act. This proposal was contested by the assessee, but confirmed by the original authority. Against the decision of the original authority, the party preferred appeal to the Commissioner (Appeals) and the latter passed Orders-in-Appeal Nos. 189 & 190/04 setting aside the demand of duty raised by the original authority. In the result, the assessee became eligible for refund of duty once again. Hence the present appeals of the department.
3. It is the case of the Department that it was open to them to demand the entire amount of duty erroneously refunded and, therefore, the show-cause notices issued in March/May 2004 under Section 11A were in order. According to them, this course of action was not in any way affected by the provision (Section 35E) for review of the earlier orders of the appellate Commissioner (Order-in-Appeal No. 202/96 and Order-in-Appeal No. 112/03). In other words, the remedy under Section 11A is independent of the one under Section 35E(2) of the Act. This case has been reiterated today by the learned SDR and she has relied on the of the Hon’ble Supreme Court in Union of India v. Jain Sudh Vanaspati Ltd. , wherein it was held that show-cause notice could be issued under Section 28 of the Customs Act, 1962 for demand of duty without recourse to the revisional remedy under Section 130 of the Act. She has also referred to the apex Court’s in Asian Paints (India) Ltd. v. CCE, wherein Section 11A and Section 35E were held to operate in different fields and therefore excise duty could be recovered under Section 11A while the appeal filed by the department after the process of review under Section 35E was pending. Learned SDR has also relied on the in CCE Bhubaneshwar v. Re-Rolling Mills wherein the ratio of the in Jain Sudh Vanaspati Ltd. (supra) was applied to the Central Excise case in hand on account of the parity of the provisions of Section 11A of the Central Excise Act and Section 28 of the Customs Act, 1962.
4. Learned Counsel for the respondents has claimed that the case law cited by the learned SDR is not applicable to the facts of this case.
5. After giving careful consideration to the submissions, I find that, as early as in 1996, the appellate Commissioner vide Order-in-Appeal No. 202/96 had held the subject refund claims to be admissible subject to Section 11B of the Act. The appellate authority obviously wanted the original authority to determine as to whether the refund claims were hit by limitation and the bar of unjust enrichment under the provisions of Section 11B ibid. This position was acceptable to the department. The original authority, apparently, did not examine the limitation aspect, against which the Department has had no grievance. It only determined the question as to whether the refund claims were barred by unjust enrichment and this question was decided against the assessee. The appeal preferred by the party against this decision of the original authority was allowed by the Commissioner (Appeals) vide Order-in-Appeal No. 112/03, wherein it was held that, in the facts of the case, the question of unjust enrichment did not arise. This decision was also accepted by the department, and so were the refund sanction orders issued by the original authority pursuant to the appellate order. Suddenly, the department woke up from the “dream of limitation” and issued the two show-cause notices in March/May 2004, both of which proposed to recover the duty amount already refunded, on the ground of time-bar. These show-cause notices were contested by the party and the dispute has ultimately reached the Tribunal.
6. I have no hesitation to hold these appeals to be frivolous inasmuch as the Department, by their conduct, acquiesced in two orders of the Commissioner (Appeals) and the consequential orders of the original authority. The first of these orders-in-Appeal, accepted by the department, had given liberty to the original authority to determine both the lime-bar and unjust enrichment issues and the latter evaded the first issue and determined the second one. The department, if aggrieved by the omission of the original authority (in the matter of deciding whether the refund claims were within time), ought to have reviewed the orders passed by the original authority pursuant to Order-in-appeal No. 202/96. Having not chosen to do that, the department gave a go-by to the time-bar issue. They kept mum even after Order-in-Appeal No. 112/03 was passed by the appellate Commissioner without touching the time-bar issue. In these facts, it cannot be said that the refund orders issued by the original authority pursuant to the Order-in-Appeal No. 112/03 were erroneous. Those orders were lawfully issued in pursuance of the order of the appellate Commissioner, which was not challenged by the department. Hence there is no question of erroneous refund of duty in this case. Both the show-cause notices issued in March May 2004 are not maintainable.
7. Learned SDR has made an endeavour to salvage the department’s case by relying on the Hon’ble Supreme Court’s judgment in Jain Vanaspati (supra). In that case, it was held that show-cause notice could be issued under Section 28 of the Customs Act, 1962 for demanding duty without recourse to revisional remedy under Section 130 of the Act. It has been claimed that the ruling in that case is equally applicable to Central Excise cases like the instant one on account of the parity between the provisions of Section 28 of the Customs Act and Section 11A of the Central Excise Act. But, on a closer look at the facts of the present case, I find that the ratio of the decision in Jain Va naspati (supra) cannot be applied to the facts of this case. In the present case, the question raised by the learned SDR is whether Section 11A was invocable for demanding duty already refunded to the assessee or, alternatively, whether the process of review under Section 35E of the Act could be resorted to for challenging the refund sanction orders passed pursuant to the order passed by the Commissioner (Appeals). The refund sanction orders of the original authority were only consequential to the order of the appellate authority and any process of review should have been thought of against the appellate order rather than against the consequential orders of the original authority. The appellate authority’s order (which treated the refund claims as not time-barred) became final and binding on the Department in the absence of review and, consequently, it was not open to the Department to demand’ duty from the party on the ground of erroneous refund.
8. For the reasons noted above, the demand of duty raised in these appeals of the Revenue cannot be sustained. The orders passed by the learned Commissioner (Appeals) are sustained and these appeals are dismissed.
(Dictated and pronounced in open Court)