2011 (3) TMI 12 - HC - Central Excise

Exemption - ex parte order - exemption benefits under Notification No. 8/98 - the order of the Joint Commissioner (Tech.) has attained finality and the Review order was ex-parte passed by the Commissioner without any legal competence and further considering the fact that the impugned orders have been passed without hearing the petitioner, this petition deserves to be allowed. - petitioner furnished Bank Guarantee as per the Court s interim order covering the entire assessed amount, the Bank Guarantee to be returned to the petitioner Appeal allowed

Summary

Issues:
Challenge to excise duty assessment based on exemption notification.

Analysis:
The petitioner, a company owning three tea estates, challenged an excise duty assessment order claiming exemption under Notification No. 8/98. The dispute arose from the differential duty imposed on package tea cleared during a specific period. The petitioner argued that they were entitled to the exemption under the said notification, citing a favorable order by the Joint Commissioner. The petitioner contended that subsequent orders challenging their exemption were unsustainable.

The petitioner's counsel highlighted the finality of the Joint Commissioner's order, which deemed the petitioner eligible for exemption benefits. They argued that the subsequent review and consequential orders were unjust as they did not disturb the original favorable decision. The petitioner also raised procedural issues, asserting that the impugned orders were ex parte and lacked proper notice, rendering them legally unsustainable.

On the other hand, the Central Government Counsel argued that the aggregate value of clearances from all units under the petitioner should be considered for exemption eligibility. They supported the review process undertaken by the Commissioner, emphasizing the protection of government revenue as a valid reason for not issuing notices during the review.

The High Court analyzed the case, noting that the Commissioner's review decision contradicted the final order of the Joint Commissioner without proper legal basis. The court emphasized the importance of affording the affected party an opportunity during review processes, which was lacking in this case. The court also highlighted the hierarchical structure of authorities in excise matters, finding inconsistencies in the actions taken by the Commissioner and the Commissioner (Appeals).

Ultimately, the High Court ruled in favor of the petitioner, quashing the impugned orders and holding them as vitiated due to procedural irregularities. The court directed the return of the Bank Guarantee furnished by the petitioner. The judgment was delivered without imposing any costs on the parties involved.