2022 (11) TMI 1513 - HC - Central Excise

Seeking quashment of impugned order - fixation of special rate of value addition in terms of Para 2.1 of N/N. 56/2002-C.E dated 14.11.2002 as amended by N/N. 19/2008-C.E dated 10.06.2008 - rejection on the ground of time limitation - HELD THAT - The Respondent No. 2 has passed the order impugned merely on the ground of limitation, which the petitioner is substantiating, therefore, the order impugned deserves to be quashed with direction to the Respondent No. 2 to consider the application of the petitioner for fixation of special rate of value addition in terms of notification referred to above. The argument of learned counsel for the petitioner is that the respondents are routinely rejecting such applications on the ground of limitation and that in such facts and circumstances, a writ petition came to be filed before the Gauhati High Court in the case of M/s Jyothy Labs Ltd. V. UOI and 2 others 2021 (8) TMI 726 - GAUHATI HIGH COURT . The court in allowing the writ petition held that the ground for rejecting such application for the reason it was not submitted within 30th September of the given financial year would perhaps be not available to the respondent authorities for rejecting the applications. It is deemed proper to keep the order impugned in abeyance for a period of one month or till the application of the petitioner for fixation of special rate of value addition is decided afresh in accordance with the notification - petition disposed off.

Summary

Issues:
Petition seeking quashment of impugned order for special rate of value addition; Rejection of application on grounds of limitation; Challenge of rejection order before Gauhati High Court; Previous judgment by Coordinate Bench; Government's Industrial Policy and notifications; Order passed without allowing any benefit; Order quashed with direction for reconsideration; Routine rejection of applications on limitation grounds; Judgment by Gauhati High Court on similar issue; Order kept in abeyance for reconsideration.

Analysis:
The petitioner filed a petition seeking to quash an order dated 20.10.2022, which rejected their application for fixing a special rate of value addition under specific notifications. The Respondent No. 2 rejected the application citing limitation as the reason. The petitioner contended that a similar rejection order was challenged before the Gauhati High Court in a previous case. A Coordinate Bench of the Court had previously directed the respondents to decide applications without insisting on the filing time, following the Gauhati High Court judgment. The Respondent No. 2 passed the impugned order without allowing any benefit to the petitioner, solely on the ground of limitation, prompting the Court to quash the order and direct reconsideration of the application. The petitioner argued that such rejections based on limitation were routine, citing a judgment by the Gauhati High Court that questioned the validity of such rejections.

The Government of Jammu and Kashmir and the Central Government had introduced an Industrial Policy to boost industrial development. Notifications were issued exempting goods from duty, with provisions for additional fixation of special rates of exemption in certain cases. The petitioner had applied for the special rate of value addition, which was rejected on the basis of limitation. The Court found the rejection unjustified and ordered the Respondent No. 2 to reconsider the application in line with the relevant notification. The Court decided to keep the impugned order in abeyance for a month or until the application was reconsidered, disposing of the writ petition with this direction. The order was to be provided to the petitioner's counsel promptly.

In conclusion, the judgment addressed the issue of routine rejections of applications based on limitation grounds, emphasizing the need for a reconsideration process in line with relevant notifications and legal principles. The Court's decision aimed to ensure fairness and adherence to natural justice principles in the application review process, highlighting the importance of proper reasoning and procedural fairness in administrative decisions related to tax exemptions and benefits.