2016 (12) TMI 848 - HC - Central Excise

Recovery - challenge to impugned order - the respondent has passed the impugned order without taking note of the Circular issued by the Commissioner dated 11.02.2010 - the respondent also did not take into consideration the Notification No.25/2016 dated 14.06.2016 whereby the earlier Notification No.67/95 dated 16.03.1995 was amended by substituting the words Free Trade Zone into Special Economic Zone - Held that - it is seen that though the respondent has extracted the objections given by the petitioner in the impugned order wherein the petitioner has referred to the notification as well as the Circular of the Commissioner. However there is no reference to the same and the impugned order has been passed totally on a different ground and by observing that the clearances to Special Economic Zone are not mentioned in the ExCus Notification No.25/2016 dated 14.06.2016. However what the respondent should have seen is as to the effect of the notification dated 14.06.2016 apart from the circular dated 11.02.2010 wherein it has been stated that though the SEZ are not listed in the proviso (i) to (vi) of Notification No.67/95 as per CBEC Circular 29/06 dated 27.12.2006 supplies from DTA to SEZ are exempted from excise duty under Rule 19 and such supplies shall also be eligible for rebate under Rule 19. Therefore it is stated that clearances to SEZ are to be treated as exports and whether the unit clears the goods under Rule 18 or 19 no duty accrues to the Government. Thus the respondent having not taken into consideration the submissions made by the petitioner which are very relevant to the facts of the case this Court is justified in interfering with the impugned order. In the light of the above the impugned order calls for interference with a further direction to redo the entire matter after taking into consideration the contentions raised by the petitioner some of which have been noted above Appeal allowed by way of remand.

Summary

Issues:
Challenging Order-in-Original confirming excise duty, interest, and penalty.
Failure to consider relevant Circular and Notification.
Availability of alternative appeal remedy.
Interference with impugned order and remand for fresh consideration.

Analysis:
The petitioner challenged the Order-in-Original confirming Central Excise Duty, interest, and penalty. The impugned order was based on a show-cause notice proposing recovery under the Central Excise Act, 1944. The petitioner contended that the respondent failed to consider a Circular issued by the Commissioner and a subsequent Notification amending the earlier one. The petitioner argued that the impugned order should be set aside due to this oversight.

The respondent, represented by the Senior Panel Counsel, emphasized the availability of an alternative appeal remedy before approaching the Court. The respondent pointed out that the petitioner should exhaust this remedy before seeking relief from the Court. However, the Court noted that the impugned order was passed without due consideration of relevant submissions made by the petitioner, which were crucial to the case. The Court highlighted the significance of Circulars and Notifications in determining the applicability of excise duty exemptions.

The Court found that the impugned order lacked proper consideration of the petitioner's arguments, which were supported by legal provisions and past decisions. The Court noted that the Circular and Notification were pivotal in determining the treatment of clearances to Special Economic Zones. The Court concluded that the impugned order required interference and directed a fresh consideration by the respondent, taking into account the observations made by the Court. The Court ordered a redo of the entire matter, emphasizing the importance of considering all relevant contentions raised by the petitioner.

In light of the above analysis, the Court allowed the Writ Petition, setting aside the impugned order and remanding the matter to the respondent for fresh consideration. The respondent was instructed to carefully review the submissions and provide an opportunity for a personal hearing to the petitioner before passing a new order in accordance with the law. No costs were awarded in this matter, and the connected miscellaneous petition was closed as a consequence of the judgment.