2016 (6) TMI 357 - HC - Central Excise

Eligibility of Rebate claim - adjudicating authority is not deciding the matter since the SCN is still pending adjudication - Held that - having regard to the nature of the directions issued by the revisional authority in its order, no fault can be found in the approach adopted by the second respondent in not deciding the rebate claim till the investigation by DGCEI is concluded and the CCE, Vapi decides the adjudication pending before him. However, the rebate claims of the petitioners which are filed way back in the year 2011 cannot be kept pending till the outcome of other proceedings. Each case has to be decided on the basis of the law and facts as prevailing at the relevant time. The claim cannot be kept pending indefinitely to await the decision in some other matter. While the order of the revisional authority, to the extent the case is remanded for verification is concerned, the same cannot be faulted with. But further verification could not have been contingent upon the outcome of the other proceedings, namely, the investigation by the DGCEI and the final decision in the classification matter by common adjudicator CCE, Vapi, more so, in the light of the submissions advanced by the petitioners that the revenue has taken two contrary stands as regards classification of the product of Unicorn Industries. In the opinion of this court, when a case comes up before a quasi-judicial authority, it is bound to decide the same in accordance with law as per the situation as prevailing at the relevant time. An adjudicating authority cannot keep a matter in abeyance indefinitely to await the outcome of one proceeding after another. Period of limitation - Impugned order barred by limitation, estoppel and acquiescence - Held that - considering the approach of the DGCEI in not concluding the investigation for a considerable period of time and the conduct of the CCE, Vapi in sending the matter to the Call Book to await the decision of the Supreme Court in the SLP filed by the Supreme Court, no fault can be found in the conduct of the petitioner in waiting for a reasonable time for the remanded proceedings to be concluded and then challenging the same in the light of the above facts. For this reason, the above contention does not merit acceptance. - Decided in favour of petitioner

Summary

Issues Involved:
1. Entitlement of the petitioner company to rebate claims under Rule 18 of the Central Excise Rules, 2002.
2. The impact of the DGCEI investigation and classification dispute on the rebate claims.
3. Delay and laches in challenging the revisional authority's order.
4. The conduct of the petitioner and suppression of material facts.
5. The remand directions issued by the revisional authority.

Issue-wise Detailed Analysis:

1. Entitlement of the petitioner company to rebate claims under Rule 18 of the Central Excise Rules, 2002:
The petitioner company, engaged in the manufacture and export of excisable goods like Pan Masala, claimed rebate of excise duties paid on exported goods under Rule 18 of the Central Excise Rules, 2002. The petitioner lodged rebate claims for duties paid on consignments exported in June 2011, totaling Rs. 2,81,33,060/-. A show cause notice was issued, and the rebate claims were initially rejected by the Assistant Commissioner of Central Excise. However, upon appeal, the Commissioner of Central Excise (Appeals) allowed the claims. The Excise Department's revision application led to a remand by the Joint Secretary, Government of India, for fresh decision considering the DGCEI investigation and classification dispute.

2. The impact of the DGCEI investigation and classification dispute on the rebate claims:
The revisional authority directed the second respondent to consider the outcome of the DGCEI investigation and the final decision in the classification matter by the Commissioner of Central Excise, Vapi. The DGCEI investigation was complete, but the adjudication was pending. The classification dispute was transferred to the Call Book due to a pending SLP before the Supreme Court. The court held that the rebate claims could not be indefinitely delayed awaiting these outcomes and must be decided based on the current situation.

3. Delay and laches in challenging the revisional authority's order:
The respondents argued that the challenge to the order dated 01.10.2012 was barred by delay and laches, as the petitions were filed in September 2015. The court noted that the petitioners initially did not challenge the remand order but approached the court after a reasonable period due to the prolonged non-conclusion of the remanded proceedings. The court found no fault in the petitioners' conduct given the circumstances.

4. The conduct of the petitioner and suppression of material facts:
The respondents contended that the petitioners suppressed material facts, including the issuance of a show cause notice by the DGCEI. The court acknowledged the pending investigation and adjudication but emphasized that the rebate claims should not be indefinitely delayed. The court rejected the argument that the rebate claims should be kept in abeyance to protect revenue interests.

5. The remand directions issued by the revisional authority:
The court found that while the revisional authority's remand for verification was justified, making the rebate claims contingent on the outcomes of pending investigations and adjudications was not. The court held that each case must be decided based on the prevailing law and facts, without indefinite delays awaiting other proceedings. The court set aside the directions to consider the DGCEI investigation and classification dispute outcomes, directing the second respondent to decide the rebate claims expeditiously.

Conclusion:
The court allowed the petitions, setting aside the remand directions contingent on the DGCEI investigation and classification dispute outcomes. The second respondent was directed to decide the rebate claims in accordance with the current law and facts within four months. The rule was made absolute to this extent, with no order as to costs.