COMMISSIONER OF CENTRAL EXCISE MUMBAI – I versus M/S MORARJEE GOKULDAS SPG. & WVG. CO. LTD.

Citation: [2023] 7 S.C.R. 887 · Decided: 24-03-2023 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

A
B
C
D
E
F
G
H
887
[2023] 7 S.C.R. 887
887
COMMISSIONER OF CENTRAL EXCISE MUMBAI – I
v.
M/S MORARJEE GOKULDAS SPG. & WVG. CO. LTD.
(Civil Appeal No. 3039 of 2011)
MARCH 24, 2023
[M. R. SHAH AND KRISHNA MURARI, JJ.]
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-in-
original sanctioning the refund was the subject matter of review
A
B
C
D
E
F
G
H
888
SUPREME COURT REPORTS
[2023] 7 S.C.R.
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][897-
A-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
A
B
C
D
E
F
G
H
889
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
th

Excerpt shown. Read the full judgment & AI analysis in Lexace.