2022 (3) TMI 320 - HC - Central Excise

Area based exemption - seeking directions to adjudicate the applications filed by it for fixing special rate of valued addition in terms of notification dated 14.11.2002 as amended vide notifications dated 27.03.2008 and 10.06.2008 - units located in specified areas from the duty equivalent to the amounts of duty paid by the manufacturer - HELD THAT - The court in allowing the writ petition held that the ground for rejecting such application for the reason it was not submitted within 30th September of the given financial year would perhaps be not available to the respondent authorities for rejecting the applications. This petition is disposed off with the direction to the respondent No.2, Commissioner Central Excise Goods and Services Tax Commissionerate, Jammu to consider the above applications of the petitioner for fixation of a special rate in terms of the notifications referred to above in accordance with law most expeditiously without insisting for the time of filing of the applications in the light of the judgment of the Guahati High Court if possible within a period of one month from the date a copy of this order is produced before him.

Summary

Issues:
1. Interpretation of Industrial Policy regarding duty exemptions.
2. Delay in adjudicating applications for fixing special rates.
3. Grounds for rejection of applications based on limitation.
4. Applicability of judgment from Gauhati High Court.
5. Direction to consider applications for fixation of special rates.

Analysis:
1. The judgment dealt with the interpretation of the Industrial Policy by the State of Jammu and Kashmir and the Central Government regarding duty exemptions for industrial development. The policy aimed to boost investor confidence by providing exemptions on excise duty for goods cleared from specified areas. The notifications issued by the government specified the conditions and limits for the duty exemptions, allowing for additional fixation of special rates in certain cases.

2. The petitioner had filed applications seeking directions to adjudicate the applications for fixing special rates of valued addition in accordance with the notifications issued. These applications were filed in May 2020 but had not been decided yet. The court noted the delay in adjudicating these applications and directed the respondent authorities to consider and decide them within a reasonable time frame.

3. The counsel for the petitioner argued that the respondents were routinely rejecting such applications on the grounds of limitation. The petitioner referred to a judgment from the Gauhati High Court in a similar case, where the court held that rejecting applications based on the time of submission within a financial year deadline may not be a valid reason. The court considered this argument and directed the respondent authorities to decide the applications without insisting on the time of filing.

4. In light of the judgment from the Gauhati High Court and the arguments presented, the court disposed of the petition with a direction to the Commissioner Central Excise & Goods and Services Tax Commissionerate, Jammu, to consider the petitioner's applications for fixation of special rates expeditiously. The court emphasized the need to follow the law and the judgment from the Gauhati High Court in deciding the applications.

5. The court further directed that no final order shall be passed in response to the show-cause notices for a specified period or until the applications are decided as directed. This was to ensure that the applications for fixing special rates were given due consideration and decided appropriately within the specified time frame. The writ petition was ultimately disposed of with these directions in place.