1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION jmi WRIT PETITION NO. 21 OF 2008. M/s. S.S. Natu Plastics & Metals Pvt. Ltd. ..Petitioner. v/s. The Union of India & Ors. ..Respondents. .... Mr. M.H. Patil, a/w. Ms. Aparna Hirandgir, for Petitioner. Mr. R. B. Pardeshi, for Respondents. .... CORAM : V.C. DAGA & S.J. KATHAWALLA, JJ. DATE : 28TH JUNE 2010. P.C. Heard Learned Counsel for the petitioner and the Learned Counsel appearing for the respondents. 2. This petition is directed against the order dated 27th December, 2006 passed by the Government of India, Ministry of Finance, on the application filed under section 35EE of the Central Excise Act, 1944. The short question involved in this petition is as to whether the authorities below were justified in imposing and confirming the penalty and interest under section 11AC of the Central Excise Act, 1944. 3. Submissions :- Mr. Patil, Learned Counsel appearing for the petitioner submits that in the order in original, no findings or pleadings of suppression of facts or deception by the assessee by adopting 2 means under section 11AC, are to be found. He submits that penalty under section 11AC could not have been imposed. He, however, submits that the First Appellate Authority as well as Revisional Authority has ignored this vital aspect of the matter. He, thus, submits that the order to the extent it imposes penalty is liable to be quashed and set aside. He placed heavy reliance on the judgment of the Apex Court in the case of Union of India v/s. Rajasthan Spinning & Weaving Mills, 2009 (238) ELT 3 (SC), wherein Apex Court ruled that penalty provision of section 11AC would come into play only after an order is passed under section 11A(2) with the finding that the escaped duty was the result of deception by the assessee by adopting a means as indicated in section 11AC. He also tried to canvass that the rebate claimed is not within the sweep of the provisions of section 11AC of the Central Excise Act, 1944. He thus, submits that the impugned order to the extent of imposing penalty is liable to be set aside. 4. Per Contra :- Mr. Pardeshi, Learned Counsel appearing for the Revenue brought to our notice the show cause notice the allegations in the show cause notice leading to suppression of facts while setting up rebate claim. He also brought to our notice the findings recorded in the order-in-original; wherein it is categorically mentioned that the petitioner was well aware of the fact that his overseas customer had rejected the goods exported by them on 9th November, 2000 itself; whereas the petitioner filed the application for rebate on 22nd November, 2000. He, thus, submits that admitted facts are sufficient to indicate the 3 suppression of facts on the part of the petitioner. 5. So far as the question leading to the interpretation of section 11AC is concerned, Mr. Pardeshi submits that the said question was neither raised nor addressed by the petitioner before any of the Lower Authorities as such it could not be considered because it does not arise from the order of the Tribunal. He further submits that looking to the conduct of the petitioner, this is not a fit case wherein this Court should exercise writ jurisdiction. 6. Consideration :- Having heard the rival submissions of the parties, we are convinced of the fact that show cause notice did contain allegations leading to the suppression of facts and in the order-in- original, it is, specifically, observed by the Deputy Commissioner of Central Excise as under :- “The assessee were sanctioned rebate of duty in case through cheque payment of goods purported to be exorted vide AR-4 No. 56/00-01 and AR-4 No. 57/00-01 as per order in originals both dated 12/01/2001 whereas goods dispatched by their overseas client on 9/11/2000 and knowing very well that the goods exported vide the above said AR-4’s have been rejected by their overseas client, they have filed rebate claim for aforesaid AR-4’s on 22/11/2000 and also availed the rebate of excise duty which was sanctioned to them in the month of January 2001. Further, even through more than 3 weeks have lapsed they have not submitted any proof of export of the said goods and as such this refund claim is premature because only when excisable goods are exported, rebate of duty paid can be granted under Rule 18 of the Central Excise Rules, 2002.” (Emphasis supplied) 4 7. The aforesaid findings are confirmed by the First Appellate Authority as well as the Revisional Authority. The said findings of fact can be supported on the basis of materials on record. It is, thus, clear that on 9th November, 2000, the petitioner was well aware of the fact that their overseas customer had rejected their goods. Rebate claim on duty was made on 22nd November, 2000 i.e. after 13 days from the date of the receipt of the intimation from the overseas customer about rejection of the goods. It was thus expected on the part of the petitioner to disclose this fact while making rebate claim. 8. Rebate claim was received by the petitioner in the month of January, 2001; whereas the same was returned by the petitioner some time in May, 2003. It is, thus, clear that the petitioner has used this amount for a period of almost 2½ years, knowing fully well that the petitioner was not entitled to the said rebate claim. 9. In the above view of the matter, the suppression of the fact on the part of the petitioner is writ large. The revisional order also makes a reference to these facts in para 6.4 which reads as under :- “6.4 In the instant case, it is fact on record that the impugned goods was rejected by the overseas buyer and the rejected goods were dispatched to India by the overseas buyer on 9.11.2000 and these facts were in full knowledge of the applicants. The applicants, however, suppressing the facts of rejection and dispatch of the goods, filed rebate claim on 22.11.2000 which resulted in erroneous refund of duty amount. The applicants, a 5 manufacturer exporter are duty bound to bring true facts on record and they must have informed the revenue about rejection of the export goods and its dispatch to India at the time of filing rebate claims. Govt., therefore, is of the considered opinion that the erroneously paid rebate has been rightly/legally demanded in terms of section 11A of the C.E. Act, 1944 and the applicants are liable for penalty under section 11AC as imposed by the lower authorities.” (Emphasis supplied) 10. In the aforesaid view of the matter, no fault can be found with the view taken by the Revisional Authority. The question relating to the applicability of Section 11AC does not arise from the order impugned herein. It was neither raised nor canvassed as such, it needs no consideration. 11. In the result, Writ Petition is dismissed with no order as to costs. [ S.J. KATHAWALLA, J. ] [V.C. DAGA, J.]