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2021 (10) TMI 134 - HC - Central ExciseAttachment of properties - Area Based exemptions - validity and vires of N/N. 17/2008-CE dated 27.03.2008 and No.31/2008-CE dated 10.06.2008 - request for fixation of a special rate for the value addition on the manufactured goods for the financial year 2016-2017 and 2017-2018 - applications of the petitioner were not entertained and the department invoked the attachment of some properties of the petitioner. Whether under the N/N. 32/99-CE dated 18.07.1999 as amended and the N/N. 31/2008-CE dated 10.06.2008 the manufacturers are entitled to have an option not to avail the rates specified in the tables contained in the notifications and whether they have a legal right to request the authorities for fixation of a special rate as per the actual value additions to the manufactured goods? HELD THAT - The dominant purpose of the two notifications i.e. amended notification No.32/99-CE dated 18.07.1999 and the notification No. 31/2008-CE dated 10.06.2008, is the bestowing of a legal right to the assessee to opt for the fixation of a special rate in respect of the value addition to a manufactured goods. The requirement that such applications are to be made not later than 30th day of September of the given financial year is a provision for streamlining the procedure for making such application and to avoid the situation where the process of making such applications would be a never ending matter. Without going into the aspect whether the requirement to submit such application within 30th September of the given financial year is a mandatory requirement or a directory requirement, what we take note of is that such a provision has been incorporated to streamline the process for submission of the application seeking for the fixation of a special rate to the value addition to manufactured goods. In the peculiar facts and circumstances of the present case, where the necessity for making of a request for fixation of the special rate for the value addition to the manufactured goods may not have occasioned earlier, we deem it appropriate that the Principal Commissioner of GST, Guwahati decides the application of the petitioner dated 28.09.2020 on its own merit as regards the claim for fixation of a special rate to the value addition to the manufactured goods of the given financial year. The Principal Commissioner, GST, Guwahati is directed to consider the application of the petitioner dated 28.09.2020 seeking for fixation of a special rate to the value addition to the manufactured goods of the given financial year and decide the same as per law - petition allowed.
Issues Involved:
1. Validity of the notifications modifying excise duty exemptions. 2. Application of the doctrine of promissory estoppel. 3. Refund of excise duties and interim orders by the Supreme Court. 4. Entitlement to a special rate for value addition under specific notifications. 5. Timeliness and procedural requirements for applications for special rate fixation. Detailed Analysis: 1. Validity of the Notifications Modifying Excise Duty Exemptions: The petitioner, a public limited company, challenged the notifications No.17/2008-CE and No.31/2008-CE which modified the excise duty exemptions under the Northeastern Industrial Policy. The High Court initially quashed these notifications, a decision upheld by the Division Bench. However, the Supreme Court later reversed this decision, reinstating the notifications and dismissing the writ petitions challenging them. 2. Application of the Doctrine of Promissory Estoppel: One of the grounds for challenging the notifications was based on the doctrine of promissory estoppel. The High Court initially accepted this argument, but the Supreme Court's final judgment did not sustain this ground, leading to the dismissal of the writ petitions. 3. Refund of Excise Duties and Interim Orders by the Supreme Court: The Supreme Court's interim order dated 07.12.2015 required the GST Department to release 50% of the amount due to the assessee, provided solvent surety was furnished. This interim relief was applicable to all similarly situated assessees as per a Division Bench judgment. However, after the Supreme Court's final decision, the requirement arose for the assessees to refund the 50% amount paid under the interim order. 4. Entitlement to a Special Rate for Value Addition Under Specific Notifications: The petitioner relied on notifications No.32/99-CE and No.31/2008-CE, which allowed manufacturers to apply for a special rate representing actual value addition. The petitioner submitted an application for such a rate for the financial years 2016-2017 and 2017-2018, which was not entertained by the department. The High Court directed the Principal Commissioner of GST, Guwahati, to consider the petitioner's application for a special rate. 5. Timeliness and Procedural Requirements for Applications for Special Rate Fixation: The Principal Commissioner rejected the petitioner's application as time-barred, arguing that the stay of the Division Bench judgment did not render the notifications operational. However, the High Court noted that the necessity for the special rate application arose only after the Supreme Court's final decision. The High Court found that the petitioner applied within a reasonable time after the judgment and directed the Principal Commissioner to consider the application on its merits. Conclusion: The High Court directed the Principal Commissioner of GST, Guwahati, to decide the petitioner's application for a special rate based on the value addition to the manufactured goods, considering the unique circumstances and the timing of the Supreme Court's final judgment. The writ petition was allowed, emphasizing the legal right of the petitioner to seek a special rate despite procedural delays influenced by ongoing litigation.
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