Order date – 14 September 2022

Facts – 

• The Appellant, M/s Bridgestone India Private Limited, is engaged in the manufacture of passenger cars, trucks, buses radial tyres and tubes. 
• The appellant offers various discounts and incentives to dealers like early bird discount, cash discount and dealers‟ loyalty discounts.
• The appellant was facing difficulty in calculating the correct excise duty payable on tyres sold in the replacement market as these discounts were given after sales and at the end of the scheme by way of credit notes. 
• The appellant made an application for granting approval for making provisional assessment but rejected on the ground that excise duty can be paid on the normal transaction value and there was no need for provisional assessment. The Assistant Commissioner also observed that the appellant could file a refund claim under section 11B of the Excise Act after the expiry of the scheme.
• Pursuant to the aforesaid order passed by the Assistant Commissioner, the appellant filed refund claims on quarterly basis as every scheme was valid for a quarter only.
• 13 refund claims for the period from April 2001 to June 2004 for an amount of Rs. 1,90,53,661/- were rejected by the Deputy Commissioner by order dated 27.05.2005.
• The amount was sanctioned to be refunded to the appellant pursuant to an order dated 04.06.2015 passed by the Tribunal and admittedly this order of the Tribunal has attained finality as an appeal was not filed by the Department before the High Court against the order of the Tribunal.
• Later an order dated 16.11.2018 passed by the Commissioner, CGST and Central Excise Ujjain , by which an amount of Rs. 19,09,56,371/- earlier sanctioned and refunded has been directed to be recovered from the appellant under section 11A of the Central Excise Act 1944 and thereafter credited to the Consumer Welfare Fund under section11A (2) of the Excise Act. 
• The appellant has also been directed to pay interest on the said amount in terms of section 11AA/AB of the Excise Act.
• Aggrieved, the appellant filed an appeal.

Issue – 

• Whether the show cause notice could have been issued by the Department under section 11A of the Excise Act for recovery of the duty refunded to the appellant once the orders granting refund of duty had attained finality?

Order – 

• The Tribunal observed that the amount was refunded to the appellant pursuant to an order dated 04.06.2015 passed by the Tribunal and admittedly this order of the Tribunal has attained finality as an appeal was not filed by the Department before the High Court against the order of the Tribunal.
• Relying on High Court of Andhra Pradesh case CC and CE, Tirupati vs. Panyam Cements & Minerals Industries Ltd. In which it was held that where an order under section 11B of the Act attains finality, the refund allowed would be outside the scope of an “erroneous refund” contemplated under section 11A of the Act.
• Also, it was held that section 11A of the Excise Act cannot be resorted to by the Department for recovery of duty which it believes was erroneously refunded if the order passed for refund of duty under section 11B of the Excise Act on an application filed for refund of duty attained finality for the simple reason that it cannot fall in the category of “duty erroneously refunded”.
• Also, the proceedings cannot be re-opened relying on the judgment of the Supreme Court in Deputy Commissioner of Income Tax and others vs. Simplex Concrete Piles (India) Limited. Therefore, show cause notice dated 30.08.2017 seeking recovery of the duty refunded to the appellant is without jurisdiction. The order passed on such a show cause notice, therefore, deserves to be set aside.
• Appeal allowed.