2014 (6) TMI 26 - HC - Central Excise

Area based exemption - Refund of duty paid through PLA - unit located in Kutch - Benefit of exemption notification no.39/2001 dated 31.7.2001 - Retrospective amendment in law - Held that - petitioner s rebate claims though were rejected by the Assistant Commissioner on 8.3.2006 and 8.3.2007, according to the petitioner, such orders were never communicated to the petitioner company. The respondents have not accepted this aspect. However, in the affidavit in reply, it is stated that the office of the concerned Assistant Commissioner having been shifted in the year 2008, some of the documents were not traceable. It was therefore, not possible for the department to produce the proof of the service of the orders. Petitioner was never served with such orders. It was therefore, that when the law was changed to its retrospective effect by virtue of introduction of proviso to section 18 of the Central Excise Rules and enactment of section 88 of the Finance Act, 2008, that the petitioner labouring under the impression that rebate claims were still pending adjudication before the Assistant Commissioner, wrote on 14.5.2008 and requested that in view of such amendment, the rebate claims be sanctioned. It was on this application that the Assistant Commissioner passed various orders including one produced at Annexure-C dated 23.5.2008. All rebate claims which pertained to the period of 1.3.2002 to 7.12.2006 covered under the retrospective operation of the statutory provision, were granted. Law retrospectively amended must be applied to the rebate claims of the petitioner. It is undisputed that such retrospective amendment in the statute covered all rebate claims. Therefore, if the petitioner s rebate claims were pending either before the adjudicating authority or the appellate authority or the revisional authority, when such amendments were introduced, such amendments had to be applied to such pending proceedings. Resultant effect would be that rebate claims were granted. Merely because the petitioner was prevented from preferring such further proceeding on account of the orders passed by the adjudicating authority were not communicated to the petitioner, situation cannot change. - Decided in favour of assessee.

Issues Involved:
1. Validity of the Assistant Commissioner's rejection of rebate claims.
2. Applicability of retrospective amendments to Rule 18 of the Central Excise Rules, 2002.
3. Authority of the Assistant Commissioner to reopen and revise his own orders.
4. Communication and service of the Assistant Commissioner's orders to the petitioner.
5. Finality of the initial orders rejecting rebate claims.

Detailed Analysis:

1. Validity of the Assistant Commissioner's rejection of rebate claims:
The petitioner, a company engaged in manufacturing bedsheets/towels, filed rebate claims for excise duty paid on exported goods. The Assistant Commissioner initially rejected these claims via orders dated 8.3.2006 and 8.3.2007. The petitioner contended that these orders were never communicated to them, a claim the department did not accept but could not refute due to missing documents. The court concluded that the orders were not served to the petitioner, impacting their ability to challenge the rejections.

2. Applicability of retrospective amendments to Rule 18 of the Central Excise Rules, 2002:
Rule 18 was amended retrospectively by notification no.37/07 dated 17.09.2008, followed by section 88 of the Finance Act, 2008, which allowed rebate claims for the period from 1.3.2002 to 7.12.2006. The petitioner, under the impression that their claims were still pending, requested the Assistant Commissioner to sanction the claims based on the retrospective amendment. The Assistant Commissioner subsequently granted these claims. The court held that the retrospective amendment must be applied to the petitioner's claims, as they were pending and not abandoned due to non-communication of the initial rejection orders.

3. Authority of the Assistant Commissioner to reopen and revise his own orders:
The Commissioner (Appeals) and the Government of India held that the Assistant Commissioner, having initially rejected the rebate claims, could not reopen and revise his orders suo motu. The court noted that if the petitioner had been served with the initial orders and had not appealed, the Assistant Commissioner would indeed lack the authority to revise the orders. However, since the petitioner was not served, they were denied the opportunity to challenge the rejections, making the Assistant Commissioner's subsequent actions valid under the retrospective amendment.

4. Communication and service of the Assistant Commissioner's orders to the petitioner:
The court emphasized that the orders rejecting the rebate claims were never communicated to the petitioner. This non-communication was crucial as it prevented the petitioner from appealing the rejections. The court found that the petitioner's lack of awareness of the initial orders justified their subsequent actions based on the retrospective amendment.

5. Finality of the initial orders rejecting rebate claims:
The court held that the initial orders rejecting the rebate claims had not attained finality due to non-communication. Consequently, the retrospective amendment applied to the petitioner's claims. The Assistant Commissioner's orders granting the rebate claims were reinstated, and the revisional authority's order confirming the Commissioner (Appeals) was quashed.

Conclusion:
The High Court quashed the revisional authority's order dated 29.8.2013 and reinstated the adjudicating authority's orders granting the rebate claims to the petitioner. The court emphasized that the retrospective amendment to Rule 18 and the non-communication of the initial rejection orders justified the petitioner's claims. The petition was disposed of accordingly.

← Previous Next →