The Gauhati High Court quashed the Show Cause Notice issued by the Central Excise Authority as the amount of Education Cess refunded should not be recovered unless recourse to judicial remedies.
Many writ petitions were filed challenging the Demand-cum-show cause notices issued by the Central Excise Authority directing the petitioner to show cause as to why the amount of Education Cess and Secondary and Higher Education Cess, which were refunded to the petitioners should not be recovered under the Provisions of Section 11A(i) of the Central Excise Act, 1944, and further as to why interest should not be charged and realized in terms of Section 11AA of the Act.
All the petitioners are stated to be duly registered with the Central Excise Authority in accordance with the provisions of Central Excise Act, 1944. The goods manufactured at the petitioners’ Plants/factories are cleared upon payment of Central Excise duties leviable thereon after due compliance of all required procedural formalities under cover of appropriate Central excise invoices. The petitioners had been claiming exemptions under Notification dated April 25, 2007, as amended, by way of refund excise duty through Account Current in respect of the above mentioned final products w.e.f. November 25, 2011.
The petitioners urged that the actions of the department impugned in the present proceeding are contrary to departmental circulars/instructions issued by the department on 09.01.2020 whereby the field officers and department officers have been instructed to contest by filing Statutory Appeals/ Writ Appeals or Review Petitions or forward proposals for filing SLP to the Board.
The single judge bench of Justice Soumitra Saikia ruled that as the department sanctioned the refunds in terms of such orders passed in judicial proceedings between the assessees and the department, the same having attained finality cannot be reopened except by way of the Department taking recourse to available judicial remedies.
Unless, such remedies are availed of, attempting to re-open orders passed by Department officers by collaterally by taking recourse to Section 11A cannot be permitted, the court added.
“the show cause notices issued are required to be held to have been issued without any jurisdiction and by wrong interpretation of the powers under Section 11A read with Section 11AA and therefore, the same are required to be set aside,” the court while quashing the Show Cause Notices said.
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