Full Judgment
2. Both respondents manufactured excisable goods and had accumulated Modvat credit of duty paid on the inputs. Since their production was exported they were eligible for grant of cash refund to the extent of unusable credit. On the applications being made the Jurisdictional Assistant Collector granted refund. In both cases the sanction order was dt. 13-8-98. Subsequently the amounts were paid. On 3-1-1989 show cause notices were issued alleging that in both cases the refund was erroneously paid. It was claimed that the credit had been taken by the respondents before filing due declarations under Rule 57G of the Central Excise Rules, 1944. It was alleged that refund had been paid on the basis of credit which was not due and was therefore recoverable.
The Assistant Collector in identical orders confirmed the recovery.
Both assessees then filed appeals. In the common impugned order, the Collector held that the orders of the Assistant Collector amounted to review of the orders of his predecessor. He held that the law did not permit this. On his setting aside the lower orders, the Revenue has filed the present appeals.
3 In the present appeals it is urged that the Assistant Commissioner did have authority to issue a show cause notice seeking recovery of the refund erroneously paid and that the show cause notices were issued within six months of the orders granting refund. Reliance is placed on ITC Ltd. v. Union of India [1988 (34) E.L.T. 473 (Cal.)]. It is therefore urged that the Commissioner's reliance on Tribunal Judgment reproduced in 1985 (21) E.L.T. 182 (T) was not correct.
4. The arguments were advanced by Shri K.M. Patwari. The respondents have filed written submissions.
5. I have carefully examined the various claims made. There is no doubt that the Assistant Collector is competent to issue a show cause notice seeking recovery of a refund wrongly made. This would not by itself amount to review of the previous order. In this respect the ratio of the Judgment relied upon by the Commissioner as also that of the Shalimar Chemical Industries Pvt. Ltd. v. Collr. of Cen. Ex. Bombay [1996 (81) E.L.T. 248 (Tribunal)] would not apply to the facts of the case, find no applicability of the ratio of the ITC Judgment.
6. I, however, find that the declaration having been filed on 8-9-1987, the credit must have been taken prior to that date. The taking of this credit is challenged in the show cause notice dated 3-1-1989. However, the show cause notice does not allege suppression etc., although, the demand is made in terms of Section 11A of the Act. The demand made under the show cause notice is therefore clearly barred by limitation.
Although, this point has not been taken by either side, being a point of law it cannot be ignored 7. On the ground of limitation the Assistant Commissioner's orders do not survive. Although, the Commissioner has set aside the order on some other consideration, the relief to the assessee would have to continue.