2020 (7) TMI 637 - HC - Central Excise

Refund of Excise Duty - Area Based Exemption - It is the case of the petitioner that there was an application of the petitioner dated 27.05.2008 claiming that under the notification in force, the petitioner is entitled to an exemption/refund from excise duty up to 65% and thereafter several other applications were submitted to the department by the petitioner on the same claim but in respect of other assessment years - HELD THAT - The respondents are directed in the Excise Department to give a consideration to on the applications of the petitioner and pass reasoned orders on the same. The requirement of passing the reasoned order be done within a period of three months from the date of receipt of a certified copy of this order. Further, till such consideration are made and the reasoned orders passed, the authorities in the Excise department shall not encash the bank guarantee given by the petitioner in respect of 100% of the excise duty paid by them. Petition disposed off.

Summary

Issues:
1. Interpretation of Supreme Court judgment dated 22.04.2020 regarding excise duty exemption.
2. Consideration of pending refund applications by the Excise Department.
3. Concerns regarding encashment of bank guarantee by respondent authorities.

Analysis:

1. The judgment pertains to a writ petition filed by an industrial unit challenging the decision of authorities to limit excise duty exemption from 100% to 34%. The Single Judge allowed the petition, which was upheld by the Division Bench. The Revenue Department appealed to the Supreme Court, which clarified in its judgment dated 22.04.2020 that pending refund applications should be decided in accordance with subsequent notifications and industrial policies. The Supreme Court's decision impacted various appeals, including the one from the Division Bench.

2. The petitioner claimed entitlement to an exemption/refund of excise duty up to 65% under a notification. The Excise Department rejected an application dated 27.05.2008 but similar subsequent applications were pending. The petitioner argued that these pending applications should be considered based on the Supreme Court's clarification in the judgment. The petitioner expressed concerns about the encashment of a bank guarantee by respondent authorities before a decision on the applications.

3. The learned ASGI acknowledged that the petitioner's applications require consideration as per the Supreme Court's clarification. The respondent authorities assured that they had no immediate intention to encash the bank guarantee without evaluating the pending applications. The High Court directed the Excise Department to review the petitioner's applications and issue reasoned orders within three months. Until then, the authorities were prohibited from encashing the bank guarantee. The petitioner was instructed to provide a list of applications needing consideration, and the Department could request fresh copies if necessary. Failure to provide the list or copies would release the respondents from the obligation to act on the court's directive.

Overall, the High Court disposed of the writ petition with instructions for the Excise Department to review the pending applications in line with the Supreme Court's clarification and refrain from encashing the bank guarantee until a decision is made.