2020 (3) TMI 700 - AT - Central Excise

Refund of excise duty - duty paid at enhanced rates as per Notification No. 24/2014 dt.02.12.2014 - subsequent amendment in the notification - HELD THAT - Both the conditions mentioned in section 5A(5) have to be fulfilled for any notification to come into force. In this case the second condition was not fulfilled during the relevant period and therefore the exemption notifications had not come into force. Consequently the appellants were not required to pay duty at the enhanced rate during the relevant periods and therefore any excess duty which they paid was refundable. The order of the lower authority sanctioning the refunds was correct and it was incorrectly set aside by the first appellate authority - Appeal allowed - decided in favor of appellant.

Summary

Issues involved: Interpretation of section 5A(5) of the Central Excise Act regarding the conditions for a notification to come into force and the consequent liability to pay duty at enhanced rates.

Analysis:

1. Interpretation of Section 5A(5) of the Central Excise Act:
The issue revolved around the interpretation of section 5A(5) of the Central Excise Act, which states that a notification shall come into force on the date of its issue by the Central Government for publication in the Official Gazette and shall also be offered for sale on the same date. The appellants contended that both conditions must be fulfilled for the notification to come into force. They argued that since the Gazette notifications were offered for sale at a later date than the date of notification, they were not liable to pay duty at the enhanced rates during the intervening period. The appellants relied on RTI information to support their claim regarding the dates of offering for sale of the notifications.

2. Precedents and Legal Position:
The appellants argued that the first appellate authority erred in following the judgment of the Hon'ble Apex Court in the case of Ganesh Das Bhojraj, as it was based on the legal position predating the amendment to section 5A in 1998. They contended that the amendment added the requirement of the notification being offered for sale, which was removed in 2016. Therefore, during the relevant period, both conditions had to be fulfilled for the notification to be enforced. The appellants cited case laws such as Ruchi Soya Industries Ltd, Param Industries Ltd, and MD Overseas Ltd, along with the judgment of the Hon'ble High Court of Gujarat, to support their argument.

3. Decision and Ruling:
After considering the arguments and perusing the records, the Appellate Tribunal held that both conditions specified in section 5A(5) must be fulfilled for a notification to come into force. Since the second condition of offering for sale was not met during the relevant period, the exemption notifications had not come into force. Consequently, the appellants were not required to pay duty at the enhanced rates during that period, making any excess duty paid refundable. The Tribunal allowed the appeals, setting aside the impugned orders and granting consequential reliefs.

In conclusion, the Appellate Tribunal's judgment clarified the interpretation of section 5A(5) of the Central Excise Act and emphasized the importance of fulfilling both conditions for a notification to come into force, ultimately ruling in favor of the appellants and granting them the refund of excess duty paid during the relevant period.