# M/S Honda Siel Power Products v. Union of India & Anr

- **Citation:** (2020) 1 ILRA 393
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-12-17
- **Case number:** Writ Tax No. 147 of 2018
- **Bench:** Bharati Sapru, Rohit Ranjan Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-honda-siel-power-products-v-union-of-india-anr-45070
- **Pages:** 13

## Headnote

Act, 1944: Sections 11A, 11B, 12B, 35,
35E; Central Excise Tariff Act, 1985;
Central Excise Rules, 2002: Rule 7 -
Question for consideration before the
Court is, as to whether the revenue can
initiate proceedings u/s 11A for recovery
of excise duty, once adjudication had
been made by department making final
provisional assessment and, thereafter,
adjudicating application for refund u/s
11B,
and
no
appeal
being
filed
challenging the said adjudication which
having attained finality, is barred on the
ground of change of opinion or would
amount to reassessment when once the
revenue did not take recourse to appeal
in higher forum. (Para 31)

There
is
no
remedy
available
to
department at all u/s 11A to proceed,
after having allowed adjudication u/s
11B to attain finality - Once the adjudication
has taken place u/s 11B, department cannot
proceed to recover u/s 11A, on the basis of
"erroneous refund", so as to enable the refund
order to be revoked, as the remedy lies u/s 35E
for applying to the Appellate Tribunal for
determination - In the present case, petitionercompany had made an application for refund
which was adjudicated on 05.11.2015 and it
was directed to refund excise duty amounting
to Rs.1,02,75,633/- which was in excess. This
order was never challenged by revenue in
appeal and it attained finality. (Para 33 to 35,
39, 43 to 45)

B. Alternative Remedy u/s 35 - Where
there is change of opinion by issuance of
show-cause
notice,
writ
petition
is
maintainable. (Para 42)

Writ Petition allowed. (E-4)

Precedent followed: -

## Text

_Characters 0–39,902 of 42,336. This is a partial read: ask again with offset=39902 for what follows._

1 All. M/S Honda Siel Power Products Vs. Union of India & Anr.
393
(2020)1ILR 393

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.12.2019

BEFORE
THE HON'BLE BHARATI SAPRU, J.
THE HON'BLE ROHIT RANJAN AGARWAL, J.

Writ Tax No. 147 of 2018

M/S Honda Siel Power Products
 ...Petitioner
Versus
Union of India & Anr. ...Respondents

Counsel for the Petitioner:
Sri Nishant Mishra, Sri Tarun Gulati, Sri
Vinayak Mathur, Sri Vipin Upadhyay

Counsel for the Respondents:
A.S.G.I., Sri Anant Kumar Tiwari, Sri B.K.
Singh Raghuvanshi

A. Tax - Repayment of refund - Principle
of Unjust Enrichment - Central Excise
Act, 1944: Sections 11A, 11B, 12B, 35,
35E; Central Excise Tariff Act, 1985;
Central Excise Rules, 2002: Rule 7 -
Question for consideration before the
Court is, as to whether the revenue can
initiate proceedings u/s 11A for recovery
of excise duty, once adjudication had
been made by department making final
provisional assessment and, thereafter,
adjudicating application for refund u/s
11B,
and
no
appeal
being
filed
challenging the said adjudication which
having attained finality, is barred on the
ground of change of opinion or would
amount to reassessment when once the
revenue did not take recourse to appeal
in higher forum. (Para 31)

There
is
no
remedy
available
to
department at all u/s 11A to proceed,
after having allowed adjudication u/s
11B to attain finality - Once the adjudication
has taken place u/s 11B, department cannot
proceed to recover u/s 11A, on the basis of
"erroneous refund", so as to enable the refund
order to be revoked, as the remedy lies u/s 35E
for applying to the Appellate Tribunal for
determination - In the present case, petitionercompany had made an application for refund
which was adjudicated on 05.11.2015 and it
was directed to refund excise duty amounting
to Rs.1,02,75,633/- which was in excess. This
order was never challenged by revenue in
appeal and it attained finality. (Para 33 to 35,
39, 43 to 45)

B. Alternative Remedy u/s 35 - Where
there is change of opinion by issuance of
show-cause
notice,
writ
petition
is
maintainable. (Para 42)

Writ Petition allowed. (E-4)

Precedent followed: -

1. Shahnaaz Ayurvedics Vs. CCE, Noida, 2004
(173) ELT 377 (All. HC) (Para 14 & 42)

2. CIT Vs. Simplex Concrete Piles, (2013) 11
SCC 373 (Para 15 & 42)

3. Samsung India Electronics Pvt. Ltd. Vs. State
of U.P. and others, (2016) SCC Online All. 1539
(Para 15, 20 & 42)

4. Eveready Industries Ltd. Vs. Cestat, Chennai,
2016 337 ELT 189 (Mad. HC) (Para 10 & 44)

5. Civil Appeal No. 8488 of 2009 decided along
with case of Addison and Company (Para 18 & 41)

6. CCE and C, Tirupati Vs. Panyam Cements
and Minerals Industries Ltd. 2016 (331) ELT
2006 (SC) (Para 11)

7. Mafatlal Industries Ltd. Vs. Union of India,
1979 (89) ELT 247 (SC) (Para 12)

8. CTO Vs. Binani Cements, (2014) 8 SCC 319
(Para 13)

9. CIT Vs. Bhanji Lavji (1972) 4 SCC 88 (Para
16)

10. Arun Gupta Vs. Union of India, (2015) 371
ITR394 (All. HC) (Para 16)
394 INDIAN LAW REPORTS ALLAHABAD SERIES
11 Calcutta discount Company Ltd. Vs. ITO,
AIR 1961 SC 372 (Para 16)

12. Jeans Knit Pvt. Ltd. Vs. DCIT Bangalore,
2016 SCC Online 1536 (Para 16)

13. State of Punjab Vs. Bhatinda district
Cooperative Milk Producers Union, (2007) 11
SCC 363 (Para 20)

Precedent distinguished: -

1. CCE, Madras Vs. Addison and Company,
(2016) 10 SCC 56 (Para 7, 18, 24, 32 & 41)

2. Union of India Vs. Jain Shudh Vanaspati,
1996 (86) ELT 460 (SC) (Para 9, 25 & 40)

Precedent cited: -

1. Union of India Vs. Rubber Products Ltd.,
2015 (326) ELT 232 (SC) (Para 22)

2. CCE Bhuvenshwar Vs. Re-Rolling Mills,
(1997) 94 ELT 8 (SC) (Para 25)

Petition
challenges
show-cause
notice
dated
17.08.2017
and
order
dated
30.11.2017,
passed
by
Additional
Commissioner of Central Tax, GST and
Central Excise, Greater Noida.

(Delivered by Hon'ble Rohit Ranjan
Agarwal, J.)

1. Heard Sri Tarun Gulati, learned
Senior Counsel assisted by Sri Vipin
Upadhyay and Sri Nishant Mishra, learned
counsel for the petitioner, Sri B.K.S.
Raghuvanshi and Sri Anant Kumar Tiwari,
learned counsel for the respondentsdepartment.

2. Present petition has been filed
seeking a writ of certiorari for quashing
show-cause notice dated 17.08.2017 and
order dated 30.11.2017, and also for writ
of mandamus restraining respondents from
enforcing
demands
in
respect
of
repayment
of
refund
received
by
petitioner.

3. Facts in brief are that petitioner is
a
Company
incorporated
under
the
Companies Act, 1956 and is engaged in
manufacture of portable gensets and IC
engine falling under Chapter Heading No.
85 and 84 of First Schedule to Central
Excise Tariff Act, 1985.

4. Dispute relates to period 2014-15.
According to petitioner, it applied for
provisional assessment of excise duty under
Rule 7 of Central Excise Rules, 2002
(hereinafter called as "Rules") on 01.04.2014.
The Excise Commissioner, Central Excise,
Division II accepted the request of petitioner
for provisional assessment and intimated the
same
on
31.07.2014.
The
said
correspondence is on record as Annexure-5.
Petitioner-Company, thereafter, filed an
application for finalisation of provisional
assessment on 19.06.2015.

5. Provisional assessment was finalised
for period 2014-15 by Assistant Commissioner
on 24.07.2015, copy of said order is on record
as Annexure-8. According to provisional
assessment
order,
an
amount
of
Rs.17,89,42,303/- was passed on to customer
and excise duty deposited to the tune of
Rs.1,02,75,633/- was in excess. Assistant
Commissioner further held after examining
certificate submitted by CA of petitionerCompany that principle of unjust enrichment
was not applicable to facts of the case. Order of
provisional assessment became final as the
department did not prefer any appeal as
contemplated under Section 35E read with
Section 35 of Central Excise Act, 1944 ( for
short "Excise Act").

6. After finalisation of provisional
assessment, petitioner-Company applied
1 All. M/S Honda Siel Power Products Vs. Union of India & Anr.
395
for refund. Again after adjudication of
refund, on 05.11.2015 refund claim was
sanctioned under Section 11B of Excise
Act. The adjudication of refund order also
took note of the fact that unjust enrichment
did not apply to facts of the case. This
order was also appealable under Section
35E read with Section 35 of Excise Act
but no appeal was preferred by department
and it attained finality.

7. In one of the matters CCE,
Madras vs. Addison and Company,
(2016) 10 SCC 56, the Apex Court held
that principle of unjust enrichment applied
in a case where manufacturer had failed to
establish that burden of duties had not
been passed on to the ultimate buyer. On
the basis of said judgment, respondent no.
2 issued show-cause notice to petitionerCompany on 17.08.2017, that is after more
than two years, asking why amount of
Rs.1,02,75,633/- which was erroneously
refunded, should not be recovered and
credited to the Consumer Welfare Fund.
Reply was filed by petitioner-Company on
09.10.2017 and written submission were
submitted on 30.10.2017, taking specific
objection that proceedings seeking to
reopen concluded proceedings on the basis
of unconnected and subsequent Supreme
Court judgment was without jurisdiction
and ought to be dropped.

8. Respondent no. 2 on 30.11.2017
held the petitioner liable for refund of the
amount being unjust enrichment, since
petitioner was not able to prove that
burden of duty was not passed on by
dealers/ distributors to their customers.

9. Counsel for the petitioner
submitted that revenue did not file any
appeal against finalisation of provisional
assessment
order
dated
24.07.2015
wherein it was held that unjust enrichment
is inapplicable. Further, no appeal was
preferred against order dated 05.11.2015,
whereby refund of excess excise duty was
paid to petitioner, and thus, it attained
finality. It is contended that by issuing
show-cause
notice
dated
17.08.2017
seeking to reopen the proceedings and,
thereafter, by passing order impugned
dated
30.11.2017,
the
respondent
authorities had committed gross illegality
to question the correctness of earlier orders
which had become final. Reliance placed
by department on the decision of the Apex
Court in case of Union of India vs. Jain
Shudh Vanaspati, 1996 (86) ELT 460
(SC) cannot be applied in the present case,
as said case relates to fraud which is not
alleged in the present case. It is further
contended that Section 35E of Excise Act
provides that power of review is available
with the Commissioner under which it can
be directed that an appeal against any
order be filed by department. As orders
dated 24.07.2015 and 05.11.2015 whereby
provisional orders were finalised and
refund was granted, also qualifies as order
passed under the Act, and respondents
were entitled to file an appeal against such
orders. In absence of any appeal, these
orders attained finality and cannot be
reopened by starting collateral proceedings
by issuance of show-cause notice under
Section 11A of Excise Act, as provisions
of Section 11A applies inter alia in case
when there is a grant of "erroneous
refund", while in the present case refund
was granted in accordance with orders
passed which attained finality and cannot
be termed as erroneous to invoke Section
11A.

10. Reliance has been placed upon a
judgment of Madras High Court in case of
Eveready Industries Ltd. vs. Cestat,
396 INDIAN LAW REPORTS ALLAHABAD SERIES
Chennai 2016 337 ELT 189 (Mad. HC),
wherein it has been held that once refund
is allowed, then parallel proceedings by
way of issuance of show-cause notice
under Section 11A of the Act can not be
initiated. Relevant Paras 48 and 49 are
extracted hereasunder:-

"48.
In
other
words,
two
valuable rights, one in the form of right of
appeal and another in the form of order of
refund, are now sought to be taken away
indirectly by taking recourse to Section
11A. What cannot be done directly cannot
be done indirectly also.

49. In so far as the decision of
the Andhra Pradesh High Court is
concerned, one observation made in
paragraph 16 of the said decision is of
prime importance. In paragraph 16, the
Andhra Pradesh High Court has made it
clear, after analysing Sections 11A and
11B that there is an adjudication process
involved in the processing of applications
made under Sections 11A and 11B. The
Andhra Pradesh High Court held that
orders passed under Sections 11A and 11B
are appealable. Therefore, the decision of
the
Andhra
Pradesh
High
Court,
especially the observation in paragraph
16, should be made use of by the assessee
to contend that since there was no appeal
against the order under Section 11B, the
Department cannot take recourse to
Section 11A."

11. In case of CCE and C, Tirupati
vs. Panyam Cements and Minerals
Industries Ltd. 2016 (331) ELT 206 (AP),
the Andhra Pradesh High Court took a
view that once the department failed to file
an appeal, it would be incorrect to start
collateral proceedings by issuance of
show-cause notice under Section 11A of
the Excise Act.

12. Apex Court in case of Mafatlal
Industries Ltd. Vs. Union of India 1979
(89) ELT 247 (SC), while dealing with a
situation where a manufacturer pays a duty
unquestioningly and his remedy of appeal
fails, then after the order becoming final
after a lapse of sufficient period, on basis
of decision rendered by a High Court or
Supreme Court challenges the same on the
ground that duty was not payable or was
payable at a lesser rate, it was held that
manufacturer was not entitled to claim any
refund as the adjudication order had
become final. In case in hand assessment
order as well as refund order having
become final, revenue cannot restart the
matter by issuing show-cause notice
exercising power under Section 11A of the
Act.

13. The second point canvassed by
counsel for petitioner is that show-cause
notice dated 17.08.2017 was issued after
more than two years from finalisation of
assessment order dated 24.07.2015 and is
barred by limitation. Show-cause notice
has been treated from the date of refund
order dated 05.11.2015, which is a
consequential order after finalisation of
assessment, thus, show-cause notice is
beyond two years and is barred by
limitation. Reliance has been placed upon
a decision of the Apex Court in case of
CTO v. Binani Cements (2014) 8 SCC
319, wherein it has been held that a
specific provision relating to a specific and
defined subject would prevail over a
general provision relating to a broad
subject.

14. Sri Gulati further submitted that
issuance
of
show-cause
notice
by
respondent was based on mere change of
opinion on the very same facts, only on
account of a subsequent decision of Apex
1 All. M/S Honda Siel Power Products Vs. Union of India & Anr.
397
Court, which is not applicable in the
present case. Issuance of notice under
Section 11A amounted to reassessment as
held in case of Shahnaaz Ayurvedics vs.
CCE, Noida 2004 (173) ELT 337 (All.
HC).

15. On question of reassessment, on
basis of subsequent decision, reliance has
been placed on a decision of Apex Court
in case of CIT vs. Simplex Concrete Piles
(2013) 11 SCC 373, and also on a Division
Bench of this Court in case of Samsung
India Electronics Pvt. Ltd. vs. State of
U.P. and others, (2016) SCC Online All.
1539 wherein it was held that subsequent
judgment cannot be used to reopen
assessment or disturb past assessments.
Relevant
Para
11
is
extracted
hereasunder:-

"11.
Further,
a
subsequent
judgment cannot be used to reopen
assessments or disturb past assessments
which have been concluded. [See Para 7,
Austin Engineering v. JCIT (2009) 312
ITR 70 (Guj.) Para 4 and 5, Bear Shoes
2011 (331) ITR 435 (Mad.), B.J. Services
Co. Middle East Ltd. v. Deputy Director
(2011) 339 ITR 169 (Uttarakhand), Sesa
Goa v. JCIT 2007 (294) ITR 101 (Bom.),
Geo Miller and Co. 2004 (134) Taxman
552 (Cal)]. Reliance is also placed on the
decision of the Hon'ble Supreme Court in
MEPCO Industries v. CIT, (2010) 1 SCC
434, where the CIT on the basis of a
subsequent decision of the Supreme Court
sought to rectify his earlier order. The
Hon'ble Court held that this would amount
to a change of opinion."

16. Reliance has also been placed on
the decision in case of CIT vs. Bhanji
Lavji (1972) 4 SCC 88, Arun Gupta vs.
Union of India (2015) 371 ITR 394 (All.
HC) (Para 14, 20), Calcutta Discount
Company Ltd. vs. ITO AIR 1961 SC 372
and Jeans Knit Pvt. Ltd. vs. DCIT
Bangalore
2016
SCC
Online
1536
wherein the Courts have held that no
reassessment can be made once the
proceedings are concluded, merely on the
basis of change of opinion.

17. Counsel for the petitioner
distinguishing the case of Addison and
Company
(supra)
relied
upon
the
department while issuing show-cause
notice, submitted that the said case is
distinguishable on facts. As Hon'ble Apex
Court interpreted clause (e) of Proviso to
Section 11B and not Clause (d). As in that
case no CA certificate was presented by
assessee evidencing that incidence of duty
lied with assessee, no commercial invoices
were issued by applicant to its customers
on which no excise duty was mentioned.
While reading Section 11B(2), it is clear
that where manufacturer has applied for
refund of excise duty, clause (d) of Proviso
to Section 11B(2) states that (i) the duty of
excise should have been paid by the
manufacturer and (ii) such incidence of
duty must not have been passed on to any
other person. In the present case, it is not
in dispute that incidence of excise duty
which was initially passed on to dealer
was borne by petitioner on issuance of
credit notes and discounts on invoices. The
Commissioner on the basis of such credit
notes and invoices had held petitioner to
have paid excess excise duty, thus, the law
laid down by Apex Court in case of
Addison and Company (supra) was not
applicable in the present case.

18. Stress was also laid upon the fact
that Civil Appeal No. 8488 of 2009
decided along with case of Addison and
Company (supra) where credit notes were
398 INDIAN LAW REPORTS ALLAHABAD SERIES
issued regarding return of excise duty paid
and CA certificate was produced, the Apex
Court dismissed the appeal of the revenue
and allowed refund to assessee. Relevant
Paras 38 and 39 are quoted hereasunder:-

"38. The respondent-Assessee is
a 100 per cent export-oriented unit (EOU)
manufacturing
cotton
yarn.
The
respondent filed an application for refund
of an amount of Rs. 2,00,827/- on
14.08.2002 on the ground that it had paid
excess excise duty @ 18.11 % instead of
9.20 %. The Assessee initially passed on
the duty incidence to its customers. Later
the Assessee returned the excess duty
amount to its buyers which was evidenced
by a certificate issued by the Chartered
Accountant on 02.08.2002. The refund
claim
was
rejected
by
the
Deputy
Commissioner
of
Central
Excise,
Kolhapur Division vide an order dated
24.09.2002 on the ground that the
Assessee did not submit either the credit
notes or the Chartered Accountant's
certificate at the time of filing the refund
application.
Not
satisfied
with
the
genuineness of the documents, the Deputy
Commissioner rejected the refund claim.
The Commissioner (Appeals) Central
Excise, Pune allowed the appeal filed by
the Assessee by taking note of the
certificate
issued
by
the
Chartered
Accountant and the credit notes dated
29.07.2002.
The
Appellate
Authority
accepted the Assessee's contentions and
held that there was no reason to doubt the
genuineness of the documents produced.
The Appellate Authority allowed the
appeal of the Assessee and the said order
was confirmed by the Central Excise and
Service Tax Appellate Tribunal vide
judgment and order dated 06.10.2005. The
said order of Central Excise and Service
Tax Appellate Tribunal was further
confirmed by the High Court of Judicature
at Bombay in Central Excise Appeal No.
100 of 2008 filed by the Revenue. The
Revenue has filed the above Civil Appeal
challenging the validity of the judgment of
the High Court in CCE v. Eurotex
Industries and Exports Ltd, reported in
2008 SCC OnLine Bom 1578.

39. Except for a factual dispute
about the genuineness of the certificate
issued by the Chartered Accountant and
the credit notes raised by the Assessee
regarding the return of the excess duty
paid by the Assessee, there is no dispute in
this case of the duty being passed on to
any other person by the buyer. As it is
clear that the Assessee has borne the
burden of duty, it cannot be said that it is
not entitled for the refund of the excess
duty paid. In view of the facts of this case
being different from Civil Appeal No. 7906
of 2002, the appeal preferred by the
Revenue is dismissed."

19. In the present case, CA certificate
dated
15.06.2015
was
submitted
to
substantiate that burden of duty initially
passed on to dealers/ distributors was
assumed back by petitioner after credit
notes were issued.

20. As to the maintainability of writ
petition, Sri Gulati submitted that the
Apex Court in State of Punjab vs.
Bhatinda
District
Cooperative
Milk
Producers Union (2007) 11 SCC 363 had
held that question of limitation being a
question of jurisdiction, a writ petition
under Article 226 of the Constitution is
maintainable. He also relied upon decision
of this Court in case of Samsung India
Electronics Pvt. Ltd. (supra) wherein it
has been held that writ petition is
maintainable
when
reassessment
1 All. M/S Honda Siel Power Products Vs. Union of India & Anr.
399
proceedings are initiated on the basis of
mere change of opinion.

21. It was lastly contended that no
burden of excise duty was passed in
respect of cash discount and mega
discount is concerned to the dealers/
distributors. Perusal of invoices issued by
petitioner reveals that in case of cash
discount and mega discount, the discounts
are passed on to dealers through invoices
issued at the time of sale of products, thus,
amount paid by dealers to petitioner is the
discounted prices and incidence of excise
duty on such discount remained with
petitioner alone and is never shifted to
dealer.

22. Per contra, Sri B.K.Singh
Raghuvanshi, learned counsel appearing
for the department submitted that order
impugned dated 30.11.2017 is appealable
before Commissioner (Appeals) in terms
of Section 35 of the Act, as there is an
alternative
remedy
available
to
the
petitioner. He has relied upon a decision of
the Apex Court in case of Union of India
vs. Rubber Products Ltd. 2015 (326) ELT
232 (SC).

23. He further submitted that excise
duty is subsumed in the prices and not
charged separately from customer, when
price charged from customer includes
excise duty and discounts are provided to
the dealers by way of credit notes, then it
is not clear how the duty element included
in the discount granted by way of credit
note is passed on to customers after sale.

24. It was also contended that
Section 11A of the Act provides for
recovery
of
excise
duty
refunded
erroneously. The show-cause notice was
issued in the background of judgment of
Apex Court in the case of Addison and
Company (supra). According to him, there
is no pre-condition under Act to review of
the refund order before initiating recovery
proceedings, as Act nowhere bars such
recovery proceedings without review of
refund order.

25. Sri Raghuvanshi also relied upon
judgment of Apex Court in case of Jain
Shudh Vanaspati (supra) wherein it has
been held that show-cause notice issued
under Section 28 of Customs Act, could be
issued for demand of duty without revising
order passed under Section 47 in terms of
Section 130 of Customs Act. Reliance has
also been placed upon a decision of Apex
Court in case of CCE Bhuvenshwar vs.
Re-Rolling Mills (1997) 94 ELT 8 (SC)
wherein it has been held that Section 11A
was parimateria with Section 28 of
Customs Act.

26. Learned counsel for department
laid stress that show-cause notice as well
as the order dated 30.11.2017 are not in
nature of reassessment as they do not
affect or change the quantum of excise
duty assessed and refunded to petitioner,
but has been issued only for transfer/
credit to the Consumer Welfare Fund after
recovering the same from petitioner to
whom it has been erroneously refunded.

27. We have heard counsel for the
parties and perused the material on record.
Before proceeding to decide the issue in
hand, it would be necessary to have a
cursory glance at relevant provisions of
Central Excise Act, 1944. Relevant portion
of Sections 11A and Sections 11B, 12B,
35E and 35 are extracted hereasunder:-

"Section
11A. Recovery
of
duties not levied or not paid or short-
400 INDIAN LAW REPORTS ALLAHABAD SERIES
levied or short-paid or erroneously
refunded.-

(1) Where any duty of excise
has not been levied or paid or has been
short-levied or short-paid or erroneously
refunded, for any reason, other than the
reason of fraud or collusion or any wilful
mis-statement 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,

(a) the Central Excise Officer
shall, within [two years] from the relevant
date,
serve
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,
requiring him to show cause why he
should not pay the amount specified in the
notice;

(b) the person chargeable with
duty may, before service of notice under
clause (a), pay on the basis of,

(i) his own ascertainment of such
duty; or

(ii) the duty ascertained by the
Central Excise Officer, the amount of duty
along with interest payable thereon under
section 11AA.

........

Explanation 1. -- For the
purposes of this section and section
11AC,--

(a) "refund" includes rebate of
duty of excise on excisable goods exported
out of India or on excisable materials used
in the manufacture of goods which are
exported out of India;

(b) "relevant date" means,-

(i) in the case of excisable goods
on which duty of excise has not been levied
or paid or has been short-levied or shortpaid, and no periodical return as required
by the provisions of this Act has been filed,
the last date on which such return is
required to be filed under this Act and the
rules made thereunder;

(ii) in the case of excisable
goods on which duty of excise has not been
levied or paid or has been short-levied or
short-paid and the return has been filed,
the date on which such return has been
filed;

(iii) in any other case, the date
on which duty of excise is required to be
paid under this Act or the rules made
thereunder;

(iv) 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;

(v)in the case of excisable goods
on which duty of excise has been
erroneously refunded, the date of such
refund;

(vi) in the case where only
interest is to be recovered, the date of
payment of duty to which such interest
relates.

Section 11B. Claim for refund
of [duty and interest, if any, paid on such
duty.-

(1) Any person claiming refund
of any [duty of excise and interest, if any,
paid on such duty] may make an
application for refund of such [duty and
interest, if any, paid on such duty] to the
[Assistant Commissioner of Central Excise
or
DeputyCommissioner
of
Central
Excise] before the expiry of [one year]
[from the relevant date] [[in such form
and manner] as may be prescribed and the
application shall be accompanied by such
documentary or other evidence (including
the documents referred to in section 12A)
as the applicant may furnish to establish
that the amount of [duty of excise and
interest, if any, paid on such duty] in
1 All. M/S Honda Siel Power Products Vs. Union of India & Anr.
401
relation to which such refund is claimed
was collected from, or paid by, him and
the incidence of such [duty and interest, if
any, paid on such duty] had not been
passed on by him to any other person:

Provided
that
where
an
application for refund has been made
before the commencement of the Central
Excises and Customs Laws (Amendment)
Act, 1991, such application shall be
deemed to have been made under this subsection 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 :

Provided
further
that
the
limitation of [one year] shall not apply
where any [duty and interest, if any, paid
on such duty] has been paid under protest.

(2) If, on receipt of any such
application, the [Assistant Commissioner
of Central Excise or Deputy Commissioner
of Central Excise] is satisfied that the
whole or any part of the [duty of excise
and interest, if any, paid on such duty]
paid by the applicant is refundable, he
may make an order accordingly and the
amount so determined shall be credited to
the Fund :

Provided that the amount of
[duty of excise and interest, if any, paid on
such duty] as determined by the [Assistant
Commissioner of Central Excise or Deputy
Commissioner of Central Excise] under
the foregoing provisions of this subsection shall, instead of being credited to
the Fund, be paid to the applicant, if such
amount is relatable to -

(a) rebate of duty of excise on
excisable goods exported out of India or
on excisable materials used in the
manufacture of goods which are exported
out of India;

(b) unspent advance deposits
lying in balance in the applicant's account
current maintained with the [Principal
Commissioner
of
Central Excise
or
Commissioner of Central Excise];

(c) refund of credit of duty paid
on excisable goods used as inputs in
accordance with the rules made, or any
notification issued, under this Act;

(d) the [duty of excise and
interest, if any, paid on such duty] paid
by the manufacturer, if he had not passed
on the incidence of such [duty and
interest, if any, paid on such duty] to any
other person;

(e) the [duty of excise and
interest, if any, paid on such duty] borne
by the buyer, if he had not passed on the
incidence of such [duty and interest, if
any, paid on such duty] to any other
person;

(f) the [duty of excise and
interest, if any, paid on such duty] borne
by any other such class of applicants as
the
Central
Government
may,
by
notification
in
the
Official
Gazette,
specify:

Section
12B. Presumption
that the incidence of duty has been
passed on to the buyer. -

Every person who has paid the
duty of excise on any goods under this Act
shall, unless the contrary is proved by him,
be deemed to have passed on the full
incidence of such duty to the buyer of such
goods.

Section
35. Appeals
to
[Commissioner (Appeals)]. -- (1) Any
person aggrieved by any decision or order
passed under this Act by a Central Excise
Officer, lower in rank than a [Principal
Commissioner
of
Central Excise
or
Commissioner of Central Excise], may
appeal to the [Commissioner of Central
Excise (Appeals)] [hereafter in this
Chapter referred to as the [Commissioner
402 INDIAN LAW REPORTS ALLAHABAD SERIES
(Appeals)]] [within sixty days] from the
date of the communication to him of such
decision or order :

[Provided
that
the
Commissioner (Appeals) may, if he is
satisfied that the appellant was prevented
by sufficient cause from presenting the
appeal within the aforesaid period of sixty
days, allow it to be presented within a
further period of thirty days.]

[(1A)
The
Commissioner
(Appeals) may, if sufficient cause is shown
at any stage of hearing of an appeal, grant
time, from time to time, to the parties or
any of them and adjourn the hearing of the
appeal for reasons to be recorded in
writing :

Provided
that
no
such
adjournment shall be granted more than
three times to a party during hearing of
the appeal.]

(2) Every appeal under this
section shall be in the prescribed form and
shall be verified in the prescribed manner.

Section
35E. Powers
of
[Committee of Chief Commissioners of
Central
Excise]
or
[Principal
Commissioner of Central Excise or
Commissioner of Central Excise] to pass
certain orders-

(1) The Committee of Chief
Commissioners of Central Excise may, of
its own motion, call for and examine the
record of any proceeding in which a
Principal Commissioner of Central Excise
or Commissioner of Central Excise as an
adjudicating authority has passed any
decision or order under this Act for the
purpose of satisfying itself as to the
legality or propriety of any such decision
or order and may, by order, direct such
Commissioner or any other Commissioner
to apply to the Appellate Tribunal for the
determination of such points arising out of
the decision or order as may be specified
by the Committee of Chief Commissioners
of Central Excise in its order."

28. Thus, from the reading of
provisions of Section 11A(1) of the Act,
which provides for recovery of any duty of
excise which has not been levied or paid or
has been short levied or short paid or
erroneously refunded. The recovery of
such amount of excise duty can be made
under Section 11A(1) irrespective of
whether such non-levy or non payment or
short levy or short payment or erroneously
refund was on the basis of any approval,
acceptance or assessment relating to rate
of duty or on valuation of excisable goods
under any other provisions of this Act or
Rules made thereunder.

29. Section 35 of the Act provides
for appeals to Commissioner (Appeals),
wherein any person aggrieved by any
decision or order passed under this Act
may appeal within 60 days from the date
of communication. Further, Section 35E
which confers power on Committee of
Chief Commissioner of Central Excise to
either call for and examine the records of
any proceedings in which a Principal Chief
Commissioner
of
Central
Excise
or
Commissioner of Central Excise as an
Adjudicating authority has passed a
decision or order under the Act and may
direct such Commissioner or any other
Commissioner to apply before Appellate
Tribunal for decision. While Section 11B
of the Act provides for claim for refund of
excise duty.

30. As in the present case,
provisional assessment was finalised on
24.07.2015,
the
assessing
authority
recorded a finding that CA certificate
dated 15.06.2015 certifies that no part of
duty is recovered from the dealers/
1 All. M/S Honda Siel Power Products Vs. Union of India & Anr.
403
distributors involved in the discount
passed on to the dealers/ distributors,
which indicates that assessee had not
passed on the incidence of duty paid in
proportion to the discount given to dealers/
distributors and, therefore, issue of unjust
enrichment is a remote possibility and
further, the order observed that duty to the
tune of Rs.17,89,42,303/- was passed on to
the customers and duty deposited to the
tune of Rs.1,03,75,633/- was in excess.
Further, an application being made by
petitioner was adjudicated by Assistant
Commissioner on 05.11.2015 wherein it
was held that it was not a case of unjust
enrichment and petitioner was entitled for
refund. This order was also not challenged
by revenue and the same attained finality.

31. Thus, question for consideration
before us is, as to whether the revenue can
initiate proceedings under Section 11A for
recovery of excise duty, once adjudication
had been made by department making
final
provisional
assessment
and,
thereafter, adjudicating application for
refund under Section 11B, and no appeal
being
filed
challenging
the
said
adjudication
which
having
attained
finality, is barred on the ground of change
of
opinion
or
would
amount
to
reassessment when once the revenue did
not take recourse to appeal in higher
forum.

32. As it is not in dispute that after
provisional
assessment
order,
the
adjudicating authority passed an order for
refund under Section 11B of the Act. Both
the orders which were appealable and
revisable under Section 35 and 35E were
never taken to the higher forum by
revenue and they attained finality. It was
only after decision of the Apex Court in
case of Addison and Company (supra) that
show-cause
notice
was
issued
on
17.08.2017, and order was passed on
30.11.2017 directing the petitioner for
refund of excise duty to be deposited in
Consumer Welfare Fund.

33. A careful reading of Sections 11A,
11B, 35 and 35E would reveal that an
application for refund as envisaged under
Section 11B is not to be dealt as a ministerial
Act or an administrative Act, rather an
application has to be made by person
claiming refund within a prescribed time and
the application is to be accompanied by
documents referred to in Sub-section (1) of
Section 11B to establish that amount of duty
of excise and interest, if any paid on such
duty in relation to which such refund is
claimed was collected from, or paid by him
and the incidence of such duty and interest, if
any, paid on such duty has not been passed on
by him to any other person. It is on the receipt
of this application, Assistant Commissioner
or Deputy Commissioner of Central Excise, if
satisfied may make an order for refund. Thus,
it is only after the adjudication of the
application that an order of refund of duty and
interest is passed.

34. Sub-section (3) of Section 11B
which is a non-obstante clause makes it
clear that dehors any judgment, decree,
order or direction of appellate tribunal or
court or any other provision of the Act, no
refund shall be made except as provided in
Sub-section (2). Thus, the procedure
prescribed under Section 11B not only
regulates the manner and form in which an
application for refund is to be made but
also prescribes period of limitation as well
as method of adjudication in which refund
has to be made.

35. Thus, Section 11B assumes great
significance, as any order of refund of
404 INDIAN LAW REPORTS ALLAHABAD SERIES
excise duty and interest is made only after
the adjudication as envisaged under
scheme of Section 11B. In the present
case, petitioner-company had made an
application
for
refund
which
was
adjudicated on 05.11.2015 and it was
directed to refund excise duty to tune of
Rs.1,02,75,633/- which was in excess.
This order was never challenged by
revenue in appeal and it attained finality.

36. Thus, once the order of
adjudication has been validly passed under
Section 11B and a refund has been made
on 05.11.2015, the next question which
crops up for consideration is as to whether
Section 11A can be invoked thereafter.

37. As Section 11A(1)(a) uses the
word "Central Excise Officer" who is
empowered for recovery of any refund,
Central Excise Officer is defined in
Section 2(b) of the Act to mean Chief
Commissioner
of
Central
Excise,
Commissioner
of
Central
Excise,
Commissioner
of
Central
Excise
(Appeals), Additional Commissioner of
Central Excise, Joint Commissioner of
Central Excise, Assistant Commissioner of
Central Excise or Deputy Commissioner
of Central Excise or any other officer of
Central Excise Department invested by
Central Board of Excise and Customs
constituted
under
Central
Board
of
Revenue Act, 1963 with any of powers of
a Central Excise Officer under the act.
Thus, an order of recovery can be passed
under Section 11A by an Assistant
Commissioner, as he happens to be a
Central Excise Officer in terms of Clause
(a) of sub-section (1) of Section 11A,
though an application under sub-section
(2) of Section 11B can be made and an
order for refund can either be passed by
Assistant Commissioner or by Deputy
Commissioner. Meaning thereby that a
Deputy Commissioner can pass an order
for refund under Section 11B (2) and an
Assistant
Commissioner
can
invoke
proceedings for recovery under Section
11A (1).

38. This could lead to a situation
where power of recovery under Section
11A is invoked by a subordinate authority
despite the fact that refund application has
been adjudicated upon by a superior
authority under Section 11B.

39. Through plain reading of Section
35E, it is clear that limited revisional
jurisdiction is conferred upon Principal
Commissioner
and
Commissioner
of
Excise in sub-section (2) of Section 35E,
this power is not actually to correct any
error directly, but only available for
directing the competent authority to take
matter to the Commissioner (Appeals).
Meaning thereby that it is always open to
Principal Commissioner or Commissioner
or Central Excise to examine the order
passed by adjudicating authority under
Section 11B and direct the competent
authority to file appeal against order of
refund. In the present case, order of refund
was never taken to higher forum and it
became final.

40. Decisions relied upon by the
counsel for the revenue in case of Jain
Shudh
Vanaspati
(supra)
relates
to
proceedings which were vitiated by fraud.
Further, the Apex Court recorded a clear
finding that goods were cleared for home
consumption under Section 47 of the Act
by playing fraud upon the Department.
Therefore, the Court held that fraud
vitiates all solemn Acts, while in present
case department has not alleged any fraud
upon
the
petitioner-assessee.
1 All. M/S Bundelkhand Health Care Vs. State of U.P. & Ors.
405

41. Further reliance placed by
counsel for revenue on the decision of
Addison and Company (supra), wherein it
was held that recovery under Section 11A
can be made where excise duty was
refunded erroneously, but the Apex Court
had also held that where the incidence of
duty was not passed on and the assessee
had borne burden of duty, thus he was
entitled for the refund. Thus, both the
cases relied upon by the department are
not applicable in the present case, as it is
neither a case of fraud, nor where
incidence of duty was passed on.

42.