2021 (3) TMI 1039 - HC - Central Excise

Refund of Excise Duty - benefits under the Northeast Industrial Policy - N/N. 20/2008-Central Excise dated 27.03.2008 - refund at special rates provided in the said notification in respect of the different categories of goods - HELD THAT - As the Notification dated 27.03.2008 provides for a legal right to the assessee to claim for a special rate to be fixed in the event of there being any add-ons to the goods manufactured, we are of the view that without an appropriate decision being taken on such claim for special rate, it would be inappropriate for the department to proceed against the petitioners as per the rates provided in the Notification dated 27.03.2008. This petition stands disposed of by directing the Principal Commissioner of GST Guwahati to consider the aforesaid application of the petitioner dated 20.05.2020 claiming for a special rate to be fixed on the basis of the add-ons made to the goods manufactured - Petition allowed.

Summary

Issues:
1. Claim for special rate under Notification No.20/2008-Central Excise and Notification No.17/2008-Central Excise.
2. Restored Notification dated 27.03.2008 following Supreme Court judgment.
3. Alleged intention to attach petitioner's bank accounts by GST department.
4. Consideration of special rate claim by Principal Commissioner of GST.
5. Imposition of interest by GST department.

Analysis:
Issue 1: The petitioner, engaged in the manufacture of instant Mosquito Coils, claimed benefits under the Northeast Industrial Policy, leading to exemptions in excise duties. Initially, 100% refund of excise duty was granted, but later, Notification No.20/2008-Central Excise introduced revised refund rates. The petitioner applied for a special rate under Clauses 3(1) of the Notification, citing value addition in manufactured goods.

Issue 2: The High Court had set aside Notification No.20/2008-Central Excise and Notification No.17/2008-Central Excise, but the Supreme Court, in a separate judgment, overturned such decisions, restoring the notifications. This restoration affected the petitioner's refund claims and special rate application.

Issue 3: The petitioner raised concerns over the GST department's intent to attach their bank accounts without considering the special rate claim. The petitioner argued that without deciding on the special rate, enforcing the rates from the restored notification would be unjust.

Issue 4: The court directed the Principal Commissioner of GST to evaluate the petitioner's special rate application dated 20.05.2020 based on add-ons to manufactured goods. Once a special rate is determined, further legal actions against the petitioner could proceed accordingly, with a prohibition on coercive measures until the decision is made.

Issue 5: The petitioner contested the imposition of interest by the GST department on the amount to be returned. The court did not address this issue in the current judgment, granting the petitioner liberty to revisit the court for a decision on the interest imposition if desired.

In conclusion, the writ petition was allowed to the extent that the Principal Commissioner of GST was directed to assess the petitioner's special rate application promptly, ensuring fair consideration and subsequent legal actions based on the determined rate. The petitioner was granted liberty to challenge the imposition of interest separately if needed.