2021 (7) TMI 784 - HC - Central Excise

Refund of excise duty - benefits under the Northeast Industrial Policy - UPVC Pipes, fittings etc. - N/N. 20/2008-Central Excise dated 27.03.2008 - HELD THAT - As the Notification dated 27.03.2008 provides for a legal right to the assessee to claim for a special rate to be fixed in the event of there-being any add-ons to the goods manufactured, it is considered that without an appropriate decision being taken on such claim for special rate, it would be inappropriate for the department to proceed against the petitioners as per the rates provided in the Notification dated 27.03.2008. This petition stands disposed of by directing the Principal Commissioner of GST Guwahati to consider the aforesaid application of the petitioner dated 03.04.2021 claiming for a special rate to be fixed on the basis of the add-ons made to the goods manufactured - petition allowed.

Summary

Issues:
1. Interpretation of Notification No.20/2008-Central Excise dated 27.03.2008 regarding excise duty refunds.
2. Application of Clause 3(1) of the Notification for claiming a special rate.
3. Impact of High Court's judgment setting aside the Notification and subsequent Supreme Court decision restoring it.
4. Failure to consider the petitioner's application for a special rate post the Supreme Court judgment.

Analysis:
The petitioners, engaged in manufacturing UPVC Pipes, sought exemptions under the Northeast Industrial Policy related to excise duties. Initially, 100% refund of excise duty was granted, but Notification No.20/2008 altered this by providing rates for different goods categories. Clause 3(1) of the Notification allowed manufacturers to seek a special rate based on actual value addition. The High Court's judgment set aside the Notification, restoring the 100% refund. However, a Supreme Court decision reversed these judgments, reinstating the Notification. The petition challenged the lack of consideration for their special rate application post the Supreme Court ruling, arguing against recovery based on the Notification's rates without a decision on the special rate claim.

The Court directed the Principal Commissioner of GST to evaluate the petitioner's application for a special rate based on add-ons to manufactured goods. Pending this decision, no coercive measures for recovery were permitted, and communication from the Assistant Commissioner of GST was to be disregarded. The Principal Commissioner was instructed to act within six weeks, and the writ petition was allowed in the specified context.