ROOFIT INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) THE appellants are manufacturers of Asbestos Cement Corrugated sheets (ACC sheets, for short) falling under SH 6804.00 of the CETA Schedule. They see this product from their factory gate as well as from their depots situated in different parts of the country, As the actual price to be sold from the depots is not known at the time of removal of goods from the factory gate, the appellants adopt the nearest prevailing value for the purpose of payment of duty. If the goods are cleared at a higher price from depots, they pay the differential duty and, if the clearance of the goods from depot is at a lower price, they claim refund of the differential duty. The department found that an amount of Rs. 5,56,581 had been erroneously refunded to the appellants. Therefore, a show -cause notice was issued to them for recovery of the said amounts, which was contested by the noticee. The original authority confirmed the demands of duty against the party and the first appellate authority upheld the decision of the lower authority. Hence, the present appeal of the assessee.

(2.) HEARD both sides. The only ground pressed before us by learned counsel for the appellants is that the demand of duty raised on them under Section 11A of the Central Excise Act without reviewing the refund order under Section 35EA of the Act is legally not maintainable. It has been pointed out that the SCN for recovery of duty was issued by the original authority which had sanctioned refund of the amount and that such proceedings are void in law inasmuch as the said authority had no power to review it own order. The refund order ought to have been reviewed by the jurisdictional Commissioner and SCN for recovery of the amount should have been issued within the prescribed period of limitation of six months under Section 11A of the Central Excise Act. In this connection, learned counsel has relied on the Board's Circular No. -CX dated 22.9.98, wherein, it was clarified, with reference to the Apex Court's decision in CCE v. Re -rolling Mills, : 1997 (94) ELT 8 (SC), that the demand for recovery of erroneous refund had to be made under Section 11A within the prescribed limitation period Ltd. Counsel has also relied on the Tribunal's decision in the following cases:

(3.) WE have given careful consideration to the rival submissions. We shall straightaway consider the Hon'ble Supreme Court's ruling rendered in the case of Jain Shudh Vanaspati (supra). In that case, the assessee had obtained clearance of certain goods imported by them, under Section 47 of the Customs Act. Subsequently, the Customs authorities found that the goods had been imported in containers which were prohibited for import and further Customs duty had not been levied on the imported goods. Therefore, the department issued a show -cause notice to the importer under Section 124 of the Customs Act for confiscating the containers as also a SCN under Section 28 of the Act for recovery of duty on the imported goods. These notices were contested by the party. When the matter eventually came up before the High Court, the court took the view that no SCN under Section 28 could have been issued until and unless the order under Section 47 had been revised under Section 130. The Supreme Court disapproved this view and held that an order under Section 47 obtained by the employment of fraudulent methods did not have to be set aside by the exercise of revisional powers under Section 130 before the ill -effects of the fraud could be set right by initiation of the process of confiscation of the fraudulently cleared goods under Section 124. The ratio of this decision was applied to the case of Re -Rolling Mills (supra) by the Apex Court. In the case of Re -Rolling Mills (supra), apparently, the question considered by the Apex Court was whether a SCN demanding duty could be validly issued under Section 11A of the Central Excise Act to an assessee without revising the assessment order under Section 35E of the Act. After noting that Section 11A of the Central Excise Act was pari materia with Section 28 of the Customs Act, their Lordships applied the ratio of Jain Shudh Vanaspati (supra) to the Central Excise case on hand. We follow this precedent and apply the ratio of the Supreme Court's decision in Jain Shudh Vanaspati (supra) to the facts of the instant case and, accordingly, reject the appellants' contention that a SCN demanding erroneously refunded duty could . not be issued under Section 11A without revision/review of the refund order. No other issue has arisen from the submissions made in this case.