2023 (7) TMI 825 - HC - Central Excise

Denial of rebate claim - non-compliance with the conditions for exporting the goods within 6 months of its clearance from the factory/warehouse - Rule 18 of the Central Excise Act, 1944 read with the notification No. 19/2004 Central Excise (NT) dated 06.09.2004 - HELD THAT - The Hon'ble Supreme Court in the case of MANGALORE CHEMICALS FERTILIZERS LTD. VERSUS DEPUTY COMMISSIONER 1991 (8) TMI 83 - SUPREME COURT has granted full relief to the Assessee and held that 'A public authority cannot be estopped from doing its public duty, but it can be estopped from relying on a technicality'. Hon'ble Supreme Court quoted with approval a passage from Francis Bennion in 'Statutory Interpretation' which read Modern Courts seek to cut down the technicalities attendant upon a statutory procedure, where these cannot be shown to be necessary to the fulfillment of purpose of the legislation . The Hon'ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS MPV ENGG. INDUSTRIES 2003 (3) TMI 107 - SUPREME COURT has held that 'Assessee who is eligible for exemption should not be deprived of benefit simply because authorities concerned took their own time in disposing of the application'. Taking into consideration the aforesaid judicial pronouncements and on appreciating the records of the writ petitions what is apparently evident is that the respondents took more than 2 years in deciding the application for extension of time which otherwise under the notification was required to be finalized within 7 days. If the respondents have taken an inordinately long period of time in deciding the application for extension of time, the benefit of the same tilts more towards the petitioner as the notification is a beneficial notification and the benefit of which should go in favour of the Assessee. The impugned order dated 08.02.2022 (Annexure P/1) and also that passed by the Commissioner (Appeals) and the original authority therefore deserves to be and is accordingly set-aside - Petition allowed.

Summary

Issues Involved:
1. Denial of rebate claim on goods exported outside India.
2. Application for extension of time for export beyond six months.
3. Rejection of application for extension by the authorities.
4. Judicial precedents and liberal interpretation of beneficial notifications.

Summary:

Denial of Rebate Claim on Goods Exported Outside India:
The petitioner challenged the order dated 08.02.2022, where the Principal Commissioner rejected their revision petition. The original adjudicating authority had denied the rebate claim due to non-compliance with the condition of exporting goods within six months from clearance.

Application for Extension of Time for Export Beyond Six Months:
The petitioner, a registered merchant exporter, applied for an extension on 18.12.2012, citing genuine reasons for the delay in exporting goods. The application was supported by relevant documents.

Rejection of Application for Extension by the Authorities:
The adjudicating authority denied the rebate claim, and the appellate authority affirmed this decision, stating that the petitioner did not export within the stipulated six months and did not obtain necessary permission for an extended period. The application for extension was rejected after more than 2½ years on 10.04.2015. Subsequent appeals to the Commissioner (Appeals) and the Revisional Authority were also rejected.

Judicial Precedents and Liberal Interpretation of Beneficial Notifications:
The petitioner argued that the stringent view taken by the authorities defeated the purpose of the Export Promotion Scheme, which aims to boost exports and earn foreign exchange. The petitioner cited the Calcutta High Court judgment in "Kosmo Healthcare Pvt. Ltd. v. Asstt. Commr. Of C. EX. Kolkata-1" and other judicial precedents emphasizing a liberal interpretation of beneficial notifications. The respondents countered that the extension beyond six months is discretionary and not a right, and the petitioner's reasons for delay were not satisfactory.

Court's Decision:
The court noted that the respondents took over 2½ years to decide the extension application, which should have been finalized within seven days as per the notification. Given the beneficial nature of the notification, the court set aside the impugned order dated 08.02.2022 and the decisions of the Commissioner (Appeals) and the original authority. The petitioner was entitled to the rebate claim under Rule 18 of the Central Excise Rules, 2002, and the notification dated 06.09.2004. All writ petitions were allowed.