2021 (5) TMI 669 - HC - Central Excise

Refund of Excise Duty - Area based exemption - Northeast Industrial Policy - N/N. 20/2008-Central Excise dated 27.03.2008 - 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, 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 Dibrugarh to consider the aforesaid application of the petitioner dated 04.09.2012 claiming for a special rate to be fixed on the basis of the add-ons made to the goods manufactured. After arriving at the special rate, if any as per the order to be passed by the Principal Commissioner, GST further process against the petitioner as per law may be initiated.

Summary

Issues:
1. Interpretation of Notification No.20/2008-Central Excise dated 27.03.2008 regarding excise duty refund.
2. Claim for a special rate under Clause 3(1) of the Notification.
3. Legality of department's intention to attach bank accounts without considering the special rate claim.
4. Direction to Principal Commissioner of GST for consideration of special rate application.
5. Restoration of original position if coercive measures already taken.
6. Permission to operate bank account until a decision on the special rate claim.
7. Assailing imposition of interest by the GST department.

Analysis:

1. The judgment involves the interpretation of Notification No.20/2008-Central Excise dated 27.03.2008, which modified the refund rates for excise duties. The petitioner company, engaged in manufacturing Kraft Paper, sought exemptions under the Northeast Industrial Policy, subject to excise duty payments.

2. The petitioner invoked Clause 3(1) of the Notification to claim a special rate based on value addition to manufactured goods. The petitioner's application for a special rate was pending, as the Notification was challenged in various High Courts, leading to conflicting judgments.

3. The petitioner challenged the department's intent to attach bank accounts without considering the special rate claim post the Supreme Court's judgment upholding the Notification. The petitioner argued that the right to claim a special rate should be acknowledged before applying the rates specified in the Notification.

4. The Court directed the Principal Commissioner of GST to review the petitioner's application for a special rate within six weeks. The decision on the special rate would determine further actions against the petitioner as per the law, emphasizing no coercive measures until a decision is made.

5. If any coercive actions were already taken, the Court ordered restoration to the original position. Additionally, the petitioner was permitted to operate the specified bank account until a decision on the special rate claim was reached.

6. The judgment granted the petitioner liberty to challenge the imposition of interest by the GST department in a separate petition, highlighting that the current judgment allowed the writ petition to the extent indicated, focusing on the special rate claim and associated actions.