2014 (3) TMI 1061 - HC - Central Excise

The grievance of the petitioner is that this demand has been raised despite the fact that no Committee has been constituted to decide whether the assessee has, in fact, complied with the terms of the notifications issued by the Central Government under Section 72 of the Finance Act, 2011. - Held that - In view of the fact that the decision of this Court asking the Investment Appraisal Committee to verify the claims of the investors has been upheld by the Apex Court, the impugned demand notices shall be kept in abeyance till the Investment Appraisal Committee give its report. In case, the committee find that any of the investments claimed by the petitioners are entitled to the benefits, then obviously fresh notices will have to be issued.

Summary

Issues:
1. Interpretation of the New Industrial Policy and related concessions in the North-eastern region.
2. Validity of the Investment Appraisal Committee's assessment.
3. Constitution of the Investment Appraisal Committee post the scheme's expiration.
4. Challenge by the Union of India and subsequent dismissal by the Apex Court.
5. Disposal of the petitions based on the Apex Court's judgment and keeping the demand notices in abeyance.

Issue 1: The court addressed the interpretation of the New Industrial Policy and related concessions in the North-eastern region, specifically focusing on the scheme's benefits of refund of excise duty for investments in the region. The Investment Appraisal Committee was tasked with verifying the utilization of refunded excise amounts for specified purposes by the assessee.

Issue 2: The court emphasized the importance of assessing whether investments were made in accordance with the law and entitlement to benefits under the earlier notification. Despite the scheme's expiration, the need for an appraisal by the Investment Appraisal Committee was highlighted to determine the validity of the investments made by the assessee.

Issue 3: The Union of India objected to constituting a Committee post the scheme's end, citing the lack of statutory provision. However, the court rejected this objection, emphasizing the necessity of the Committee's assessment for the benefit of all stakeholders involved, directing the Committee to meet and decide on the investments made by the assessee.

Issue 4: The Union of India challenged the court's order by filing a Special Leave Petition before the Apex Court, which was subsequently dismissed. The Apex Court directed the Investment Appraisal Committee to conclude its work within three months and recover incentives if findings were against the concerned units.

Issue 5: Following the Apex Court's judgment, the petitions were disposed of as infructuous, with liberty reserved for the petitioners to approach the court if aggrieved by the Committee's verification. The impugned demand notices were kept in abeyance pending the Committee's report, with a requirement for fresh notices if investments were found to be eligible for benefits. The petitions were disposed of with no costs awarded.