2023 (10) TMI 1069 - HC - Central Excise

Benefits under the budgetary scheme dated 5-10-2017 - Utilization of Cenvat credit for the purpose of payment of taxes with reference to the exemption notification dated 25-7-2007 - stage to pay the taxes by cash after exhausting the Cenvat credit was yet to come - whether the units have availed the benefit under the notification dated 25-7-2007, with reference to the subsequent scheme dated 5-10-2017? HELD THAT - A reading of the communication dated 22-2-2023 makes it discernible that a decision had been taken that even in respect of those units who had paid their tax dues pursuant to the earlier exemption notification dated 25-7-2007 by utilizing the Cenvat credit, but the stage to pay the further taxes by means of cash was yet to come, would be considered by the authorities to be units who have availed the benefits under the earlier exemption notification dated 25-7-2007 - As the decision contained in the communication dated 22-2-2023 answers the issue that was before the Court that such units should also be considered to be units who have availed the benefits under the exemption notification dated 25-7-2007, having accepted the contents of the communication dated 22-2-2023, no further adjudication is required in these batch of writ petitions. The consequence of such units being considered to be units who have availed the benefits under the exemption notification dated 25-7-2007 would be that such units, including the writ petitioners herein, would be entitled to all such entitlements, legal consequences etc. of being considered to be units who have availed the benefits under the exemption notification dated 25-7-2007 and the respondent authorities may do the needful accordingly. Petition closed.

Issues: Interpretation of benefit under exemption notification dated 25-7-2007 in relation to subsequent scheme dated 5-10-2017.

Analysis:
1. The primary issue in these writ petitions revolves around whether units that utilized their Cenvat credit for tax payment under the exemption notification dated 25-7-2007, but had not yet paid taxes in cash, could be considered as having availed benefits under the subsequent scheme dated 5-10-2017. The crux of the matter lies in determining if such units are entitled to benefits under the new scheme based on their actions under the previous notification.

2. A crucial communication dated 22-2-2023 from the Government of India, Ministry of Commerce and Industry, sheds light on the decision-making process regarding units that utilized Cenvat credit under the earlier exemption notification. The communication indicates that units which paid tax dues using Cenvat credit, even if pending cash payments remained, should be regarded as having availed benefits under the exemption notification dated 25-7-2007.

3. The Court, upon reviewing the communication, concurred with the interpretation that units falling under the aforementioned category should indeed be considered as having availed benefits under the exemption notification dated 25-7-2007. Consequently, further adjudication on this matter through the writ petitions was deemed unnecessary, given the clarity provided by the communication.

4. By recognizing these units as having availed benefits under the earlier exemption notification, including the petitioners, they become entitled to all associated benefits, legal consequences, and entitlements under the said notification. The authorities are directed to act accordingly in light of this determination.

5. As a result of the above analysis and conclusions, all the writ petitions were closed by the Court. However, the petitioners were granted liberty to approach the Court again if needed, and any interim orders in place were vacated. Furthermore, a copy of the pivotal communication dated 22-2-2023 was retained on record for reference and documentation purposes.

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