2018 (2) TMI 1883 - HC - Central Excise

Benefit of N/N. 33/99-CE dated 8.07.1999 - Refund of excise duty - time limitation - Section 11 B of the Central Excise Act, 1944 - HELD THAT - The appellant having been once found to be eligible for exemptions and refund of duty paid, denial of benefit of exemptions and refund on the ground of delay, in our considered opinion, will cause grave injustice which cannot be permitted. Even otherwise, it is well settled law that non-following of procedural requirement cannot deny the substantive benefit, otherwise available to the assessee. Also exemptions made with a beneficient object like growth of Industry in a Region have to be liberally construed and a narrow construction of the Notification which defeats the object cannot be accepted. The impugned order of the Tribunal is not based on correct appreciation of the provisions of Notification and denial of refund (of duty paid) to the appellant on the ground of delay is wholly unjustified. We also hold that statements of duty paid submitted in RT-12 returns by the appellant was substantial compliance of Clause 2(a) of the Notification and there was no need for it to submit a separate statement of the duty paid and claim refund. Appeal allowed - decided in favor of appellant.

Issues:
1. Correct interpretation of Notification No.33/99-CE dated 8.07.1999
2. Entitlement to refund of Excise duty under the Notification
3. Denial of Excise refund benefit based on procedural requirements
4. Denial of substantial benefit of refund due to lapse in procedural requirements
5. Justification of not following earlier decisions on the same issue

Issue 1: Correct interpretation of Notification No.33/99-CE dated 8.07.1999
The case involved the correct interpretation of Notification No.33/99-CE dated 8.07.1999, which granted exemptions to new industrial units in the North Eastern Region. The appellant claimed substantial expansion and submitted duty paid returns but faced denial of refund due to delay in filing the refund application. The High Court held that the appellant's submission of duty paid statements in RT-12 returns constituted substantial compliance with the Notification. The Court emphasized that the Notification did not mandate a separate claim for refund and that denial of benefits based on delay would cause injustice.

Issue 2: Entitlement to refund of Excise duty under the Notification
The appellant, a Tea Estate, sought a refund of excise duty paid under Notification No.33/99-CE dated 8.07.1999. Despite fulfilling the conditions of substantial expansion and submitting duty paid statements, the refund claim was rejected on grounds of delay. The High Court ruled in favor of the appellant, stating that the denial of the refund on the basis of delay was unjustified. The Court highlighted that the exemptions in the Notification should be liberally construed to promote industrial growth and that procedural lapses should not deny substantive benefits to the assessee.

Issue 3: Denial of Excise refund benefit based on procedural requirements
The Tribunal had denied the appellant's claim for refund of excise duty based on procedural grounds, specifically citing a delay in filing the refund application. However, the High Court held that the appellant's submission of duty paid statements in RT-12 returns within the specified period constituted substantial compliance with the Notification's requirements. The Court emphasized that procedural lapses should not result in the denial of substantive benefits available to the assessee under beneficial provisions like those in the Notification.

Issue 4: Denial of substantial benefit of refund due to lapse in procedural requirements
The appellant's claim for refund of excise duty was rejected by the Tribunal primarily due to a delay in filing the refund application. However, the High Court overturned this decision, stating that the appellant's submission of duty paid statements in RT-12 returns fulfilled the requirements of the Notification. The Court emphasized that denial of substantial benefits like refunds based on procedural lapses would be unjust and against the principles of beneficial provisions aimed at promoting industrial growth in specific regions.

Issue 5: Justification of not following earlier decisions on the same issue
The High Court addressed the Tribunal's failure to follow earlier decisions of coordinate benches on the same issue concerning Notification No.33/99-CE dated 8.07.1999. The Court emphasized the importance of consistency in legal interpretations and cited previous cases where the Tribunal had held that duty paid statements submitted in RT-12 returns constituted full compliance with the Notification's requirements. The Court upheld these precedents and ruled in favor of the appellant, setting aside the orders that denied the refund claim based on procedural grounds.

In conclusion, the High Court ruled in favor of the appellant, holding that the denial of the refund claim based on procedural lapses and delay was unjustified. The Court emphasized the importance of liberally construing beneficial provisions like those in the Notification to promote industrial growth and prevent injustice to the assessee. The judgment set aside the previous orders and allowed the appeal with costs awarded to the appellant.

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