2021 (5) TMI 675 - HC - Central Excise

Seeking for special rate fixation on the ground of delay - HELD THAT - The issue raised in this writ petition requires further hearing and accordingly let notice be issued. Mr. Keyal accepts notices on behalf of respondent Nos. 1 to 4. Mr. SS Roy accepts notice on behalf of respondent No. 1. Necessary extra copies be served on the learned counsel. The petitioner shall take steps on the rest of the respondents within a period of one week from today by way of registered post with A/D. Notices are made returnable after four weeks.

Summary

Issues:
Challenge to rejection of special rate fixation application on the ground of delay; Demand for refund; Delay in seeking special rate as per notification dated 27.03.2008; Stay of operation of judgment by Hon'ble Apex Court; Issuance of demand cum recovery notice and attachment notice; Petitioner's challenge to rejection order dated 09.04.2021.

Analysis:
The petitioner challenged the rejection of their application for special rate fixation due to delay, as per the order dated 09.04.2021 by the Principal Commissioner, GST, Guwahati. The petitioner had set up an industrial unit under NEIIP 2007, seeking exemption of 100% Central Excise Duty. Various legal proceedings ensued regarding the exemption policy, with the Apex Court directing the release of 50% of the due amount to the petitioner. Subsequently, the respondent demanded a refund, leading to the petitioner's representation for special rate fixation under the notification dated 27.03.2008. The rejection of this representation by the respondent No. 2 formed the basis of the challenge in the writ petition.

The petitioner argued that the delay in seeking the special rate should be condoned, citing the interim order by the Apex Court and the extension of limitation periods for filing petitions. They contended that the operation of the judgment was stayed, not quashed, and hence, the delay should not be a ground for rejection. On the other hand, the respondent supported the rejection, emphasizing that the notification dated 27.03.2008 remained in force post the Apex Court's decision, justifying the delay in seeking the special rate for the years 2016-17 and 2017-18 in 2021.

The High Court found merit in the issues raised and decided to issue notices for further hearing. The operation of the order dated 09.04.2021 and the demand cum recovery notice/attachment notice issued to the respondent were stayed until further orders. The case involves a complex interplay of legal interpretations regarding delay, interim orders, and the applicability of notifications, necessitating a detailed examination during the subsequent hearings.