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TMI Blog2025 (5) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... ment for the first time submitted an application dated 25.06.2005 praying for exemption under Notification No. 33/99-C.E. dated 08.07.1999 on the ground that they had substantially expanded their factory after 24.12.1997 as they increased the post-expansion installed capacity by more than 25%. The respondent completed the expansion of their factory on 19.03.1998. Further, on 02.09.2005, the respondent vide letter no GM/01/241/2005 dated 30.08.2005 submitted their refund claim regarding Notification No. 33/99-C.E. dated 08.07.1999 from July 1999 to March 2003 (time period when old management was under control). Thus, after seven years of expansion, the present appellant applied for a refund claim under Notification No. 33/99-C.E. dated 08.09.1999. 2.1. The Ld. Special Counsel representing the Revenue has submitted a list of dates and events leading to the present appeals, which is reproduced below: - Sl. No. Date Particular 1 25.06.2005 The respondent filed an application praying for exemption under para 2(a) read with Para 3(b) of Notification No. 33/99-CE dated 08.07.1999 on the ground that they had substantially expanded their installed capacity in the factory after 24.12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supporting the expansion work. He can't verify the expansion work after seven years. 8 09.08.2007 The Adjudicating Authority rejected their claim in Order-in-Original No. DIV/DIG/CE/REF/01/ACD/2007, dated 09.08.2007 because they did not submit the proper documents that the range Superintendent had sought. 9 18.01.2008 Aggrieved, the respondent filed an appeal before the Commissioner(Appeals), Customs & Central Excise, Guwahati, who, vide Order-in-Appeal No.06/DB/CE(A)/GHY/08 dated 18.01.2008, set aside the impugned order and remanded the case to the adjudicating authority for re-determination per law because the Assistant Commissioner rejected the claim based on the range superintendent's report without recording his findings. Adjudicating Authority also did not record his finding regarding filing the refund application after the stipulated date as per para 2(a) of Notification No 33/99-CE dated 08.07.1999. 10 29.10.2008 The adjudicating authority issued an order (No. 10/EXEM-33/99-CE/ACD/2008) on 29.10.2008, granting the benefit of exemption under Notification No. 33/99-CE dated 08.07.1999, as amended as the party had fulfilled the condition of substantial exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have submitted in the earlier proceedings. (ii) The Commissioner (Appeals) failed to appreciate that the party's declaration filed to the Assistant Commissioner, Central Excise, Digboi vide letter 23.04.2001 is additional evidence produced by the party at the appellate stage without any mention of it in the entire proceeding before the three authorities in the present forum. (iii) The Commissioner (Appeals) had failed to appreciate that it was on record that the party had contended before the original adjudicating authority in the course of proceedings that the delay in claiming the refund was attributable to the fact that they had taken over the factory only in 2005(June/July) and taking over, the Chartered Engineer in the course of drawing machinery layout of the unit had pointed out that the factory might be eligible for exemption under the said notification and subsequently they had claimed the exemption. Against this backdrop, Commissioner (Appeals) admission of the additional evidence that the party had filed a claim on 23.04.2021 is factually and legally incorrect. (iv) After the Commissioner (Appeals) passed the order, the Assistant Commissioner, Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit had pointed out that the factory may be eligible for exemption under Notification No. 33/99-CE dated 08.07.1999 and subsequently they had claimed the exemption. Against this backdrop, Commissioner (Appeals) admission of the additional evidence that the party had filed the claim on 23.04.2001 is factually and legally incorrect. 18 27.11.2012 The Commissioner (Appeals) vide Order-in-Appeal No.40/DIB/CE(A)/GHY/12 dated 27.11.2012 dismissed the Department's Appeal as infructuous. 19 25.02.2013 On scrutinising the above Order-in-Appeal dated 27.11.2012 passed by the Commissioner (Appeals), it appeared that the ground cited by the Commissioner (Appeals) needed to be corrected. Accordingly, the Department filed an appeal no E/70039/2013 before the CESTAT at Kolkata against Order-in-Appeal No. 40/DIB/CE(A)/GHY/12 dated 27.11.2012. 3. From the above, it may be seen that after a series of applications/representations, the adjudicating authority has sanctioned a refund of Rs. 61,93,365/- vide order dated 13.04.2010. Aggrieved against the sanction of the refund, Revenue filed appeal before the Ld. Commissioner (Appeals), who vide the impugned order rejected the department&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 360 (Tribunal)] 3.2. In respect of Excise Appeal No. 70039 of 2013, the Revenue has urged the ground that the refund sanctioning authority did not wait for the decision in the stay application filed before the CESTAT Appeal no. E/175/2010 before sanctioning the refund and also, while deciding the case, he ignored the Department's valid legal grounds of appeal urged before the CESTAT. 3.2. The Revenue reiterates the grounds of appeals in respect of both the appeals. 3.3. The following points were also raised by the Revenue: (i) Letter dated 23.04.2001 is an afterthought; The Ld. Commissioner (Appeals) failed to appreciate that the Party/respondent on record that while explaining the delay in submission of the Application it had claimed before the Adjudicating Authority that they had taken over the factory in 2005 (June/July) and after taking over, their Chartered Engineer pointed out that factory might be eligible for exemption under Notification No. 33/99-C.E. and after that, they had claimed the exemption. Hence, submitting a letter dated 23.04.2001 is an afterthought only. The Ld. Commissioner (Appeals) not only wrongly admitted this additional document at the appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner (Appeals), Customs and Central Excise in Guwahati on 29.12.2008. (iv) During hearing of the appeal, the consultant of the respondent handed over a copy of a letter dated 23.04.2001 addressed to the Assistant Commissioner, Central Excise, Digboi, duly acknowledged by the Department. The said Commissioner (Appeals), Customs and Central Excise, Guwahati, upon perusal of the said letter dated 23.04.2001 and upon hearing the submissions made on behalf of the respondent rejected the Departmental Appeal by an Order dated 27.11.2009 and upheld the impugned order dated 29.10.2008 passed by the Assistant Commissioner, Central Excise, Digboi. In the said order, the said Commissioner (Appeals), Customs and Central Excise, Guwahati inter alia held that from the plain reading of the said notification, it is evident that the manufacturer had to prove their eligibility of the said exemption notification by proving that their unit had undergone substantial expansion and simultaneously filed every months' statement of the duty paid. If these two conditions were fulfilled, the manufacturer was entitled to the benefits of the said notification and it was not necessary to file a formal r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty paid from the account current during the month under consideration to the manufacturer by the 15th of the next month; (c) If there is likely to be any delay in the verification, the Assistant Commissioner or the Deputy Commissioner of Central Excise, as the case maybe shall refund the amount on provisional basis by the 15th of the next month to the month under consideration and thereafter may adjust the amount of refund by such amount as may be necessary in the subsequent refunds admissible to the manufacturer. (iii) Clause 3 of the said notification inter alia provides for the exemption contained therein shall apply only to the following kinds of units namely, (a) new industrial units existing before the 24th December 1997 but which had undertaken substantial expansion by way of increase in installed capacity by not less the 25% on or after the 24.12.1997. (iv) From a joint reading of Clauses 2 and 3 of the said notification it would be apparent that the exemption contained therein is applicable to the units existing before 24.12.1997 but which had undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after 24.12.1997. For gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid various Tribunals and held that statement of duty paid submitted in RT-12 returns by the appellants was substantial compliance of Clause 2(a) of the notification and there was even no need for it to submit a separate statement of duty paid (which was in any event submitted in the present case, putting it at an even better footing that those under consideration by the Hon'ble Guwahati High Court). Since the Department never challenged the correctness of the aforesaid judgement of the Hon'ble Guwahati High Court and instead acted thereupon and granted the benefit of exemption to the other three tea estates of the respondents namely, (1) M/s. Hattiali Tea Estate (2) M/s. Muttuck Tea Estate and (3) M/s. Bokel Tea Estate. The Department must therefore be bound by the principle laid down therein in respect of the present tea estate of the respondent herein. The Hon'ble Supreme Court in the case of Commissioner of Income Tax vs. Narendra Joshi, reported in (2004) 2 SCC 801 has held that the principle laid down in earlier decisions of High Court having remained unchallenged by the Department, they must therefore be bound by the principle laid down therein. Hence, in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent had been filing statement of the duty paid by way of RT-12/ER-1 every month and the declaration filed on 10.09.2002 under Rule 57T(1), Rule 57T(2) of the Central Excise Rules, 1944 thereby giving all details of machinery for increasing production capacity. (xi) In other words, it may be submitted that the said referred letter dated 23.04.2001 is not by itself invocation of the exemption under the said notification. The exemption contemplated in the said notification had already been noted by the adjudicating authority as also the fact that the month-wise statement of duty paid during July 1999 to March 2003 along with copy of relevant PLA and TR-6 Challans had been filed by the respondent and/or had been filing the necessary RT-12/ER-1 every month. These facts were never denied by the appellants because these facts are all matters of record. Based on these facts the Commissioner (Appeals) held that the Department was duty bound to verify the claim of the appellants mentioned in the letter dated 23.04.2001. (xii) The Department merely stated that Assistant Commissioner, Central Excise, Digboi had confirmed that no such letter dated 23.04.2001 was received either in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for granting of exemption under the said notification since it was already placed before the Department by virtue of filing the necessary monthly statements of duty paid. At best, such letter dated 23.04.2001 can only be construed as a reminder to the Department that they ought to have acted in accordance with the said notification. The letter dated 23.04.2001 is therefore not essential for granting of exemption but it served the purpose of reminding the Department to do something which the Department any way ought to have done on its own without there being a need to be reminded to do so. (iii) In any event, the appellate authority being the Commissioner (Appeals) under Rule 5 of the Central Excise (Appeals) Rules, 2001 is in any event empowered to admit additional evidence in the appeal. The Commissioner (Appeals) notes in its order that, in the findings of the impugned order it is seen that there is no reference to the letter dated 23.04.2001 and it only refers to a refund application dated 16.06.2005 of the manufacturer being the respondent herein. In such circumstances the Commissioner (Appeals) had taken note of the said letter dated 23.04.2001. (iv) Hence, the purported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n why the stay should be granted. 5. Heard both sides and perused the appeal records. 6. We find that the respondent has claimed the benefit of Notification No. 33/1999-C.E. dated 08.07.1999 under Para 2(a) read with Para 3(b) of the said Notification. The claim of the respondent was verified by the Ld. Assistant Commissioner of Central Excise, Digboi on 17.06.2008 and it was found that the percentage of increase in installed capacity by way of substantial expansion during the post expansion period was made by way of (i) withering troughs = 25.39% and (ii) fermenting floor - 88.88%. Thus, we find that the respondent had fulfilled the condition prescribed in the Notification No. 33/99-C.E. dated 08.07.1999 and thus the ld. adjudicating authority found the respondent to be eligible for the refund and sanctioned the refund and the said order has been upheld by the Commissioner (Appeals). However, the Revenue has objected to it stating that the refund claims in these cases were filed by the respondent after a lapse of seven years from the date of eligibility to Notification No. 33/99-C.E. dated 08.07.1999 which is not a reasonable period, as contended. 6.1. In this regard, we note t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed before the Commissioner (Appeals) that the three industrial units had undertaken increase by more than 45.80%, 57% and 27.56% after 24.12.1997 The finding of the Commissioner (Appeals) confirming this position was not questioned by the Revenue in appeals filed before the Tribunal. The eligibility of the appellant for the benefit of exemptions and refund of duty paid stands conclusively proved. Clause 2(a) of the Notification only says that the manufacturer shall submit a statement of the duty paid by 7 of next month in which the duty has been paid from the account current. The Notification nowhere mandates the manufacturer to submit a separate claim for refund of duty paid. The appellant has admittedly been submitting statements of the duty paid from account current in RT-12 returns within time with all de-tails before the Assistant Commissioner. The appellant having been once found to be eligible for exemptions and refund of duty paid, denial of benefit of exemptions and refund on the ground of delay, in our considered opinion, will cause grave injustice which cannot be permitted. Even otherwise, it is well settled law that non-following of procedural requirement cannot deny ..... X X X X Extracts X X X X X X X X Extracts X X X X
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