2018 (9) TMI 1268 - HC - Central Excise

Area Based Exemption - substantial expansion - N/N. 33/99-CE dated 8.7.1999 - Held that - It is true that no one appeared on behalf of the appellants on the date when the case was called for hearing but the fact remains having regard to the nature of legal issues raised and the huge amount involved in the matter the Tribunal ought not to have decided the same on merits and that too by a cryptic order - the matter remanded to the Tribunal for its decision afresh on merits after giving an opportunity of hearing to the appellants - appeal allowed by way of remand.

Summary

Issues:
1. Interpretation of Notification No.33/99-CE regarding exemptions for Industrial Units in North Eastern Region.
2. Refund of duty paid under the Notification.
3. Limitation period for claiming refund.
4. Proper opportunity of hearing before the Tribunal.

Analysis:

1. The judgment revolves around the interpretation of Notification No.33/99-CE, which granted exemptions to Industrial Units in the North Eastern Region. The appellant, a company owning Tea Estates, claimed that its Industrial Unit had undertaken substantial expansion as per the Notification's criteria. The Assistant Commissioner initially denied the duty refund, questioning the expansion. However, later, the Assistant Commissioner acknowledged the expansion, leading to a refund claim of &8377;42,56,107. The Commissioner (Appeals) allowed the refund, but the Tribunal dismissed the appeal due to the absence of the appellants.

2. The issue of refund of duty paid under the Notification arises from the appellant's claim of substantial expansion, meeting the criteria for exemptions. The Assistant Commissioner's initial denial was later overturned, granting the appellants the benefit of expansion as per the Notification. The claim for refund amounted to a significant sum, leading to a legal dispute and subsequent appeals before the Commissioner and the Tribunal.

3. The judgment addresses the limitation period for claiming the refund of duty paid. The Commissioner (Appeals) rejected the refund claim, citing it as barred by limitation since it was made after six years. This limitation aspect played a crucial role in the legal proceedings and was a point of contention in the appellant's challenge before the Tribunal.

4. The issue of proper opportunity of hearing before the Tribunal is highlighted in the judgment. The appellants argued that the Tribunal did not provide a fair hearing before passing the impugned order. Despite the absence of the appellants during the hearing, the Court emphasized that given the legal complexities and the substantial amount involved, the Tribunal should have allowed a more detailed hearing. Consequently, the Court set aside the impugned order and remanded the matter to the Tribunal for a fresh decision after ensuring proper representation and a fair opportunity of hearing for the appellants.