2012 (1) TMI 180 - HC - Central Excise

Summary

Issues Involved:
1. Implementation of the Court's order dated 05.05.2010.
2. Validity of the Revenue's action against the assessee under Section 11A of the Central Excise Act.
3. Legality of the freezing and forfeiture of the Escrow Accounts.
4. Effect of the retrospective amendment by the Finance Act, 2011 on the existing judgments.

Summary:

1. Implementation of the Court's Order:
The assessee filed Misc. Case No.1926 of 2011 seeking implementation of the Court's order dated 05.05.2010 in C. Ex. App. No.1 of 2008. The application was rejected by the Commissioner, Central Excise, citing Section 72 of the Finance Act, 2011, which provided for a retrospective amendment of the exemption notifications. The Court held that the retrospective amendment did not conflict with the existing judgments and only relaxed the conditions for exemption.

2. Validity of Revenue's Action:
The Revenue issued a notice u/s 11A of the Central Excise Act demanding recovery of duty with interest and penalty for the period from 9.7.2004 to 30.9.2004, alleging non-compliance with exemption conditions. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the Revenue's order, and the High Court upheld this decision, stating that the conditions for exemption had been duly complied with.

3. Legality of Freezing and Forfeiture of Escrow Accounts:
In WP(C) No.591 of 2008, the learned Single Judge quashed the actions of the Commissioner of Central Excise in freezing and forfeiting the Escrow Accounts. The Court found that the Commissioner acted without proper application of mind and at the behest of superior authority, violating the principles of natural justice. The Court directed the defreezing of the accounts and allowed the assessee to make withdrawal applications for investments.

4. Effect of Retrospective Amendment by Finance Act, 2011:
The Revenue argued that the Finance Act, 2011 nullified the basis of the Court's judgments. However, the Court held that the retrospective amendment did not conflict with the judgments but rather made the conditions more liberal by extending the time for compliance. The Court clarified that the judgments remained executable and directed the Revenue to finalize the matter within three months, applying the amended terms and conditions for exemption.

Conclusion:
The Court dismissed the Revenue's appeals and upheld the judgments favoring the assessee. The Finance Act, 2011 was to be applied in accordance with the existing judgments, and the Revenue was directed to finalize the matter within three months.