2020 (7) TMI 413 - AT - Central Excise

COD application - Area Based Exemption - Refund of the amount - statutory time limit with statutory condonable period - can the Commissioner or this Tribunal go beyond provisions of statute and condone the delay beyond the condonable limits, where there is a statutory time limit with statutory condonable period? - If the exemption notification provides for exemption subject to some conditions and if one of the conditions required for getting a larger refund has not been fulfilled by the appellant, can the exemption notification be read, ignoring such conditions? - HELD THAT - On the question of condonable limit for delay in the case of Singh Enterprises vs CCE, Jamshedpur 2007 (12) TMI 11 - SUPREME COURT the Hon ble Supreme Court has held that where a statutory time limit is fixed for condonation, the delay cannot be condoned beyond the time limit so fixed. Interpretation of the exemption notification - HELD THAT - There were several views on how exemption notifications must be interpreted i.e., either strictly or liberally. There were judgments taking both views at various levels including by the Hon ble Apex Court, some case laws viewing exemption notifications strictly and others viewing them liberally. It has also been held in some decisions that beneficial notifications must be viewed liberally and the substantive benefits should not be denied on procedural grounds. It is now well settled that the exemption notification must be strictly construed against the person who is claiming it. In this case, if the appellant wants to claim a higher rate of refund under exemption notification, the condition therein that they should have made an application by 30th of September must be fulfilled. If they were prevented by sufficient cause from making such application the Commissioner could have condoned the delay only up to 30th of October and not beyond. The application was clearly made beyond the condonable time limit and therefore, was correctly rejected - there are no infirmity in the impugned order. Appeal dismissed.

Summary

Issues:
1. Condonation of delay in filing application for special rate of value addition.
2. Interpretation of exemption notification conditions for claiming higher rate of refund.

Issue 1 - Condonation of Delay:
The appellant, a cement manufacturer, sought special exemption under Notification No. 33/1999-CE for units in north-eastern India. The notification required applications for special rates of value addition to be submitted by 30th September, extendable to 30th October. The appellant submitted their application on 03.11.2009, beyond the condonable period. The Tribunal considered whether the delay could be condoned beyond the statutory limit. Referring to the case of Singh Enterprises vs CCE, Jamshedpur, the Tribunal held that statutory time limits for condonation cannot be exceeded. As the application was filed after the condonable period, the delay could not be condoned, and the rejection by the Commissioner was justified. The appeal seeking condonation of delay was dismissed.

Issue 2 - Interpretation of Exemption Notification:
The Tribunal addressed whether the exemption notification conditions must be strictly construed. Citing the case of Dilip Kumar & Co., the Tribunal noted that exemption notifications should be interpreted strictly, with the burden on the assessee to prove applicability. In cases of ambiguity, the benefit cannot be claimed by the assessee and must be interpreted in favor of revenue. The Tribunal emphasized that if an application deadline is a condition for claiming a higher refund rate, it must be fulfilled within the specified time frame. In this case, since the appellant missed the deadline for application submission, the rejection of their claim was upheld. The Tribunal concluded that the exemption notification must be strictly followed, and the appeal was rejected.

In conclusion, the Tribunal upheld the rejection of the appellant's claim for a special rate of value addition due to the delay in application submission beyond the condonable period and emphasized the strict interpretation of exemption notification conditions for claiming benefits.