H.R. Syiem, Member (T)

1. The facts are as follows : the Assistant Collector of Central Excise, Coimbatore, passed on order on a refund claim for Rs. 62,063.54 filed by M/s. Universal Radiators Ltd. and sanctioned the amount of Rs. 28,861.26 and rejected the rest. The Assistant Collector, under orders of the Collector of Central Excise, Coimbatore by virtue of Section 35E(2) of the Central Excises and Salt Act, 1944, made an application to the Collector of Central Excise (Appeals), Madras and submitted that the assessees had not been able to establish that the goods, radiators, coolers, heat exchanger, had been used as parts of diesel engines and that the officer deputed for verification had not been able to get evidence that the goods in respect of which the refund claim was sanctioned were used as parts of diesel engines, or were parts of diesel engines. There was no proof that the goods were exclusively used as parts of diesel engines and, therefore, the respondents were not entitled to exemption under Notification No. 55/75 the applicant Assistant Coll. pleaded that the sanction of the refund be set aside.

2. The Collector (Appeals) received the authorisation of the Collector of Central Excise under Section 35E(2) on 30th April, 1984 and he forwarded it to the respondents-assessees on 1-5-1984. The respondents-assessees submitted their memorandum of objections on 16-5-1984 and were heard in person on 28-6-1984 in which they argued that they received the notice proposing to recover refund after the expiry of the time-limit under Section 11A of the Act and, therefore, the application had to be rejected under proviso 2 of Sub-section (3) of Section 35A of the Act read with Sub-section (4) of Section 35E.

3. The Collector (Appeals) recorded that the refund cheque was cashed by the respondents assessees on 24-8-1983 and, therefore, the date of the cheque must have been prior to this date. His notice was received by the assessees-respondents on 3-5-1984 and, therefore, the notice regarding erroneous refund of duty was served on the respondents assessees after the expiry of six months from the date of the erroneous refund. as a result of this, the Collector (Appeals) decided that he was not authorised to issue an order requiring the respondents to pay the duty erroneously refunded and so he rejected the application under Section 35E made by the Assistant Collector of Central Excise.

4. The learned counsels for the two sides argued long and hard on the respective merits of their cases; but the problem is quite different from how the concerned people have seen It.

5. The Central Excises and Salt Act, 1944, has one section which authorises recoveries of duty erroneously refunded and this is Section 11A. It provides that

(1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded a Central Excise officer, may within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been 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.

This is the fundamental and only authority in the law that permits the Central Ex-else Department to recover erroneously refunded duty; if any duty Is refunded, and it is discovered that the refund was an error, the only procedure for recovering that duty is under Section 11A. The procedure in the section prescribes a notice to be issued to the person chargeable with the duty calling upon him to show cause why lie should not pay the amount specified in the notice, the Assistant Collector, after considering the representation, will determine the amount of duty due from such person and, thereupon, such person shall pay the amount so determined; It is also prohibited in the law to recover any money in excess of the amount specified in the notice.

6. The Act has another sec