2023 (6) TMI 144 - HC - Central Excise

Budgetary Support Scheme - scheme introduced in lieu of grant of General Exemption and refund of goods and services tax where eligible - benefit of notification no. 01/2010-CE dated 06.02.2010 - HELD THAT - The approach of the committee appears to deny the benefit of the budgetary support to the petitioner which has attained finality as per the affidavit of the Union Government itself and the benefit ought to have been released to the Petitioner. In the last paragraph of the report, it discloses the committee therefore owes an explanation with regard to the part of industries department that conditions do not seem to be fulfilled. However, if the department of Customs and Central Excise, deems it fit that the necessary procedure has been followed by the unit holder for seeking incentive as per their terms and conditions, the present committee doesn t reserve any right of decline. Thus, the report itself reflects that their observations and opinions notwithstanding if the Customs and Central Excise Department is satisfied that the petitioner is eligible for the Budgetary Support, the Committee does not have any right to decline the same. There are no reason to not grant the benefit as prayed for by the petitioner. At the same time, we are upset by the response of the authorities of the Union Territory which has deliberately denied the petitioner the benefit which ought to be rightly theirs, as the Union Government has also held that the Petitioner s claim had attained finality - while holding that the petitioner is entitled to receive the budgetary support as already arrived at forthwith and the same should be released without any further delay. At the same time on account of the delay caused by the Union territory of almost five years we impose a penalty of 9% interest on the total amount due to the petitioner from 18.05.2017, till the date of payment which shall be paid by the Union Territory. The costs so imposed be recovered by the Union Territory from the Officers so identified on account of whose indolence, delay in disbursing the reimbursement of GST has occurred. The petition stands finally disposed of.

Summary

Issues:
The judgment involves the interpretation of a scheme known as "Budgetary Support" introduced by the Union Government for industrial activities in Jammu & Kashmir. The main issue revolves around the eligibility of a company producing cement to claim benefits under General Exemption No. 61-A, based on certain conditions related to new investments and employment generation.

Summary:
The petitioner, a cement manufacturing company in Jammu & Kashmir, sought benefits under the Budgetary Support scheme. The Union of India supported the petitioner's case, confirming eligibility for the benefit. However, due to delays in reimbursement, the petitioner approached the court in 2018. A critical inspection report raised concerns about the authenticity of certain documents related to the petitioner's eligibility.

A committee report highlighted discrepancies in the earlier documents submitted by the petitioner, questioning the extent of expansion and productivity increase claimed. Despite the committee's findings, the petitioner had shown consistent growth in production over the years, contradicting the committee's assessment of the company not reaching its optimum capacity.

The court, considering the finality of the petitioner's eligibility as per the Union Government's affidavit, ruled in favor of the petitioner. It directed the immediate release of the Budgetary Support to the petitioner, emphasizing the undue delay caused by the Union Territory. As a penalty for the delay, the court imposed a 9% interest on the total amount due from 18.05.2017 until the payment date, to be borne by the Union Territory. Additionally, costs were to be recovered from identified officers responsible for the delay in reimbursing the GST amount.

In conclusion, the court granted the petitioner the entitled budgetary support, ordered immediate release of the benefit, imposed interest for the delay, and directed the recovery of costs from responsible officers.