2018 (9) TMI 566 - HC - Central Excise

Eligibility for refund of duty paid - time limitation - refund was rejected on the ground of delay - area based exemption / North Eastern Region - substantial expansion - procedural lapse Held that - The appellant was first required to prove its eligibility for notified exemptions by establishing that the three industrial units had undertaken substantial expansion of not less than 25% on or before 24th day of December, 1997 and then file every month s statement of duty paid from the account current to the Assistant Commissioner. And, if these two conditions were fulfilled, the appellant was entitled to refund of the amount of duty paid. As seen above, the appellant has fully established before the Commissioner (Appeals) that the three industrial units had undertaken increase by more than 45.80%, 57% and 27.56% before 24-12-1997. The finding of the Commissioner (Appeals) confirming this position was not questioned by the Revenue in appeals filed before the Tribunal. The eligibility of the appellant for the benefit of exemptions and refund of duty paid stands conclusively proved. 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. Decided in favor of appellant - appeal allowed with cost of ₹ 3000/-.

Summary

Issues involved:
Interpretation of Notification No. 33/99-C.E., dated 8-7-1999 for excise duty refund on specified goods based on substantial questions of law.

Analysis:
The judgment addressed several substantial questions of law related to the interpretation and application of Notification No. 33/99-C.E., dated 8-7-1999 for excise duty refund on specified goods. The first issue revolved around the correctness of the order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) concerning the notification's provisions. The second issue questioned the legality of denying the appellant's refund claim based on a perceived delay and the absence of a formal refund application. The third issue focused on whether a delay in filing a statement under the notification could lead to the denial of the excise refund benefit. The fourth issue examined whether procedural lapses could justify denying the appellant the substantial benefit of the refund. Lastly, the fifth issue dealt with the CESTAT's deviation from earlier decisions on the same notification regarding the requirement of a formal refund application under Section 11B of the Central Excise Act, 1944.

The facts of the case involved M/s. Hattiali Tea Estate, M/s. Muttuck Tea Estate, and M/s. Bokel Tea Estate, which were acquired by the appellant's company post a demerger. The appellant, a tea manufacturer, sought excise duty exemptions under Notification No. 33/99-C.E., dated 8-7-1999, for substantial expansion undertaken by the industrial units. The appellant submitted duty payment details and refund claims, which were initially rejected by the Assistant Commissioner of Central Excise, leading to a series of appeals and counter-arguments.

The court analyzed the provisions of the notification, emphasizing the requirement to establish eligibility for exemptions based on substantial expansion and the submission of monthly duty payment statements. It noted that the appellant had fulfilled the conditions for exemption and refund, as confirmed by the Commissioner (Appeals), which the Revenue did not challenge. The court critiqued the Tribunal's decision to deny the refund based on procedural grounds, highlighting that the appellant's submission of duty paid statements in RT-12 returns constituted substantial compliance with the notification's requirements.

In conclusion, the court ruled in favor of the appellant, setting aside the Tribunal's order and allowing the appeals with costs. The judgment underscored the importance of interpreting such notifications liberally to promote industrial growth and emphasized the principle that procedural lapses should not obstruct substantive benefits available to the assessee. The court's decision was grounded in established legal principles and previous precedents supporting the appellant's position.