2019 (7) TMI 1385 - HC - GST

100% EOU - benefits of the concessional rate of duties - case of the department is that the assessee being a EOU is guilty of availing benefits of concessional rate of duty without any prior permission of the Development Commissioner, KASEZ, Gandhinagar for manufacturing - HELD THAT - The writ applicants have been able to make out a strong prima facie case to have an interim order in their favor. Let Notice be issued to the respondents returnable on 16/10/2019 .

Summary

Issues:
Challenge to legality and validity of the order passed by Additional Commissioner, Central GST and Central Excise regarding demand of duty, interest, and penalty on an Export Oriented Undertaking (EOU) for allegedly availing concessional rate of duties without proper permission from the Development Commissioner.

Analysis:

Issue 1: Challenge to legality and validity of the order
The writ applicant, a 100% EOU, contested the order demanding duty, interest, and penalty issued by the Additional Commissioner, Central GST and Central Excise. The order confirmed a duty amount and directed recovery from the EOU under relevant sections of the Central Excise Act and CGST Act. The EOU challenged the order, arguing that they had necessary permissions from the Development Commissioner for manufacturing excisable goods. The EOU presented documents, including a permission letter from the Development Commissioner and a communication granting permission to manufacture and export goods. The EOU contended that they had been manufacturing goods since 2007 with proper authorization and had been permitted to export, with foreign exchange earnings considered. The EOU asserted that the Additional Commissioner lacked jurisdiction to proceed on the basis that necessary permissions were not obtained.

Issue 2: Prima facie case for interim relief
After hearing arguments from the EOU's counsel and reviewing the evidence, the Court found that the EOU had established a strong prima facie case for interim relief. Consequently, the Court granted interim relief in favor of the EOU, allowing the issuance of notice to the respondents returnable on a specified date. The Court acknowledged the EOU's contentions and granted the requested relief based on the presented materials and arguments.

The judgment by the Gujarat High Court, delivered by Mr. J. B. Pardiwala and Mr. A. C. Rao, JJ., addressed the challenge to the order passed by the Additional Commissioner, Central GST and Central Excise, highlighting the EOU's compliance with permissions for manufacturing and exporting excisable goods. The Court recognized the EOU's prima facie case for interim relief and granted the requested relief, emphasizing the importance of proper jurisdiction and authorization in such matters.