2021 (6) TMI 147 - HC - Central Excise

Area Based exemption - refund of Excise duty - benefit of N/N. 20/2008-Central Excise dated 27.03.2008 - HELD THAT - This petition is instituted on the grievance that the Notification dated 27.03.2008 having been restored as per the judgment of the Supreme Court in the UNION OF INDIA AND ANR. ETC. VERSUS M/S V.V.F. LTD. AND ANOTHER ETC. ETC. 2020 (4) TMI 669 - SUPREME COURT , two application dated 28.09.2020 under Clause3(1) of the Notification No.20/2008-Central Excise dated 27.03.2008 was submitted by the petitioner claiming for a special rate, but the same has not been given its consideration and without giving a due consideration to the claim for special rate made by the petitioners, the respondents now intend to attach the bank accounts of the petitioner on the premises that the refund of excise duty would be as per the rates provided in the Notification dated 27.03.2008. 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 application of the petitioner dated 28.09.2020 claiming for a special rate to be fixed on the basis of the add-ons made to the goods manufactured - Petition allowed.

Summary

Issues:
Claim for special rate under Notification No.20/2008-Central Excise dated 27.03.2008 not considered leading to potential coercive action against the petitioner.

Analysis:
The petitioner company, engaged in the manufacture of instant tea, sought exemptions under the Northeast Industrial Policy for excise duties payable under the Central Excise Act, 1944. Initially, 100% refund of excise duty paid was granted, but Notification No.20/2008 amended this to provide different rates for refunds based on goods categories. The petitioner invoked Clause 3(1) of the Notification to claim a special rate due to add-ons in their manufactured goods. However, the Notification was challenged in various High Courts, including this Court, resulting in its set aside and the restoration of 100% refund. Subsequently, the Supreme Court's judgment reinstated the Notification, leading to the petitioner's grievance that their application for a special rate was not considered before potential coercive actions were threatened by the respondents.

The Court acknowledged the legal right of the assessee to claim a special rate under the Notification in case of add-ons to manufactured goods. It was deemed inappropriate for the department to proceed with coercive actions without duly considering the petitioner's claim for a special rate. Therefore, the Court directed the Principal Commissioner of GST to evaluate the petitioner's application for a special rate submitted on 28.09.2020 within six weeks. Once the special rate is determined, further legal actions against the petitioner could be initiated as per the law, but no coercive measures were to be taken until a decision on the special rate application was made.

In conclusion, the writ petition was allowed to the extent that the Principal Commissioner of GST was instructed to assess the petitioner's claim for a special rate under the Notification No.20/2008-Central Excise dated 27.03.2008 before any coercive actions could be pursued against the petitioner.