2021 (2) TMI 922 - HC - Central Excise

Refund of excess amount of excise duty paid - appeal has been rejected by the learned CESTAT on the sole ground that petitioner had not been able to produce the clearance certificate from the Committee on Disputes (COD) - HELD THAT - The learned CESTAT proceeded on an erroneous understanding that the appeal instituted by the appellant could not be entertained since the COD permission had not been obtained. Learned Tribunal gave a liberty to the appellant to seek restoration of the appeal after obtaining the COD permission. However, that requirement has been done away with by virtue of the judgment rendered by the Apex Court. The reasoning of the learned Tribunal in dismissing the appeal does not exist. The matter is remitted to the learned CESTAT for hearing the appeal on merits - Petition allowed by way of remand.

Issues Involved:
Petitioner's appeal dismissed for non-production of clearance certificate from Committee on Disputes (COD); Rejection of refund application by Excise Department; Dismissal of petitioner's appeal by Commissioner (Appeals); Legal position regarding requirement of COD clearance; Applicability of earlier judgments in similar cases; Error in dismissing appeal by learned CESTAT.

Analysis:

1. Appeal Dismissal due to Non-Production of COD Clearance:
The petitioner's appeal was dismissed by the learned Customs Excise & Service Tax Appellate Tribunal (CESTAT) for not producing a clearance certificate from the Committee on Disputes (COD). The Tribunal stated that as a government undertaking, the petitioner needed this certificate. However, the petitioner argued that the COD clearance requirement was no longer mandatory based on previous judgments. The Apex Court's decision in the Electronics Corporation of India Limited case and subsequent cases clarified that the absence of COD permission was not a fatal defect. The Tribunal's dismissal solely on this ground was erroneous.

2. Rejection of Refund Application and Appeal:
The petitioner, a government company, had its refund application rejected by the Excise Department. The Commissioner (Appeals) also dismissed the appeal on the grounds that the claim for refund should have been made by the buyer. The petitioner contended that it suffered the loss due to excess excise duty and sought a refund. The subsequent dismissal of the appeal was challenged, highlighting the need for a fair hearing on the merits of the case.

3. Legal Position on COD Clearance Requirement:
The High Court analyzed the legal position regarding the requirement of COD clearance. Referring to earlier judgments, including the Northern Coalfields Limited case, it emphasized that the COD's role had been dissolved, and the need for clearance was no longer applicable. The Court reiterated that the absence of COD clearance should not hinder the progress of legal proceedings, as clarified by the Apex Court's decisions.

4. Applicability of Previous Judgments:
The petitioner relied on past judgments, such as the case of M/s National Buildings Construction Corporation Limited, to argue against the strict enforcement of COD clearance. The Court acknowledged the legal precedents set by the Apex Court and previous High Court decisions, emphasizing the importance of allowing due process in appeals and not imposing unnecessary procedural barriers.

5. Error in Dismissing Appeal by CESTAT:
Ultimately, the High Court found that the learned CESTAT had erred in dismissing the appeal based on the outdated requirement of COD clearance. Given the legal developments and precedents, the Court set aside the CESTAT's order and remitted the matter for a proper hearing on the merits. The writ petition was allowed in favor of the petitioner, ensuring a fair opportunity for the appeal to be heard without the unnecessary burden of COD clearance.

This detailed analysis of the judgment highlights the key issues, legal interpretations, and the Court's decision in addressing the concerns raised by the petitioner.

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