M/S Barak Alloy vs The Union Of India And 3 Ors
2025 Latest Caselaw 4086 Gua

Gauhati High Court

M/S Barak Alloy vs The Union Of India And 3 Ors on 13 March, 2025

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                              THE GAUHATI HIGH COURT
   (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                                 Case No. : WP(C)/2843/2021

            M/S BARAK ALLOY
            A PARTNERSHIP FIRM REGISTERED UNDER THE PROVISIONS OF THE
            INDIAN PARTNERSHIP ACT, 1932 AND HAVING ITS OFFICE AND FACTORY
            AT MOHANPUR ROAD, SRIKONA, CACHAR 788026 ASSAM

            VERSUS

            THE UNION OF INDIA AND 3 ORS
            THROUGH THE FINANCE SECRETARY, MINISTRY OF FINANCE, HAVING
            HIS OFFICE AT NORTH BLOCK, NEW DELHI 110001

            2:THE COMMISSIONER
             CENTRAL GOODS AND SERVICE TAX
             GUWAHATI
             OFFICE OF THE CENTRAL GOODS AND SERVICE TAX
             GUWAHATI ASSAM

            3:THE ASSISTANT COMMISSIONER
             CENTRAL GOODS AND SERVICE TAX
             CENTRAL GST AND CENTRAL EXCISE DIVISION
             C R BUILDING CIRCUIT HOUSE ROAD
             SILCHAR
            ASSAM

            4:THE PRINCIPAL COMMISSIONER
             CENTRAL GOODS AND SERVICE TAX
             GST BHAWAN
             KEDAR ROAD
            GUWAHATI ASSA

Advocate for the Petitioner   : MS. M L GOPE, MS. N HAWELIA,MS. N GOGOI,MS S SHARMA

Advocate for the Respondent : SC, GST,
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                                  BEFORE
                      HON'BLE MR. JUSTICE KARDAK ETE


                                    ORDER

Date : 13.03.2025.

Heard Ms. N. Hawelia, learned counsel for the petitioner. Also heard Mr. S.C. Keyal, learned standing counsel for the CGST.

2. By filing this writ petition, the petitioner has assailed the impugned recovery notice dated 30.12.2020, issued by the Assistant Commissioner, Silchar, Central Goods & Services Tax, Central GST and Central Excise Division, Assam, by which the petitioner has been requested to make payment of erroneously refunded amount of Rs.3,10,87,475/- (Rupees three crore ten lakh eighty seven thousand four hundred seventy five) only with applicable interest, under Section 11A and Section 11AA of the Central Excise Act, 1944.

3. The petitioner is a partnership firm registered under the provisions of Indian Partnership Act, 1932, having its office and factory at Mohanpur Road,Srikona, Cachar, Assam.

4. The case of the petitioner is that, an amount of 50% was sanctioned to the petitioner pursuant to the Hon'ble Supreme Court's order dated 07.12.2015, passed in SLP (Civil) No. 11878/2015, under the provisions of Notification No.32/99-CE, dated 08.07.1999, as amended read with Notification No.20/2007- CE, dated 25.04.2007, as amended read with judgment and order dated 01.12.2016, passed by this Court. The amount refunded is Rs.3,10,87,475/-

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(Rupees three crore ten lakh eighty seven thousand four hundred seventy five) only, on the basis of the order of this Court and the order dated 07.01.2015, passed by the Hon'ble Supreme Court. The said refund dated 10.05.2016 and 25.01.2017 were made on execution of surety bonds in which the petitioner and solvent sureties were made severally and jointly for repaying the said amount, in case the matter was finally decided against the petitioner.

5. The respondent No.3, vide impugned notice dated 30.12.2020, issued a demand notice for recovery of excess amount of refund, as per Section 11 A and Section 11AA of the Central Excise Act, 1944, with applicable interest, by which the petitioner has been requested to pay the refund of 50% of balance amount of excise duty.

6. It is contended that the petitioner came to know the order dated 22.04.2020, passed by the Hon'ble Supreme Court at a point of time, the entire Guwahati City was under lock down. Thereafter, immediately the petitioner, on receipt of the aforesaid impugned notice and coming to know about the judgment and order of the Hon'ble Supreme Court and being eligible for value addition, filed an application for special rate/value addition before the Principal Commissioner, Central Goods & Services Tax, Guwahati vide 02.02.2021, within a reasonable time after passing of the judgment of the Hon'ble Supreme Court. However, the same has not been considered by the respondent authorities.

7. Ms. N. Hawelia, learned counsel for the petitioner submits that the Hon'ble Supreme Court in its judgment and order dated 22.04.2020, has upheld the Notifications dated 27.03.2008 and 10.06.2008, providing for value addition. Therefore, in line with the judgment of the Hon'ble Supreme Court, the Page No.# 4/7

petitioner has filed an application for value addition/ special rate. As such the respondent authorities ought to have decided the value addition/special rate application, before insisting on any recovery. If the special rate application of the petitioner is decided on merit, the petitioner instead of payment, shall be entitled to get huge refund on central excise duty. She further submits that the refund granted to the petitioner was not erroneous and therefore, does not attract the provision of Section 11A of the Central Excise Act, 1944 and thereby, the impugned notice dated 30.12.2020 is liable to be set aside. She submits that after the judgment of the Hon'ble Supreme, it is clear that the Notifications dated 27.03.2008 and 10.06.2008 were held to be valid and not violating the principle of promissory estoppels and the value addition in terms of the above Notifications have been upheld. She submits that the said demand for recovery of the refund amount along with interest for certain period is impermissible and total violation of the Principle of Natural Justice.

8. Having submitted above, Ms. N. Hawelia, has placed reliance on the judgment and order dated 24.03.2021, passed by this Court in M/s. Jyothi Labs Ltd. vs. Union of India, in WP(C) No.1644/2021 and submits that the above case

squarely covers the case of the petitioner. Therefore, she prays that similar relief may be granted to the petitioner.

9. Mr. S.C. Keyal, learned standing counsel for the CGST, while referring to the averments made in para 7 of the writ petition, submits that the petitioner has categorically stated that an application for special rate/value addition, before the Principal Commissioner, Central Goods & Services Tax, Guwahati, as per the judgment of the Hon'ble Supreme Court dated 22.04.2020 has been filed. However, no application was filed before the respondent authorities, as Page No.# 5/7

claimed by the petitioner. He submits that taking note of the submission of the counsel for the CGST that no copy of the application has been received, vide order dated 21.08.2023, this Court has allowed the petitioner to file additional affidavit. The petitioner filed the additional as permitted by this Court whereby the petitioner has annexed same copy of the application dated 02.02.2021 which she had annexed in the writ petition. But in contrast to the categorical statement in the writ petition, the petitioner has stated that the special rate application for consideration of the value addition has been submitted before the Regional Office of the Central Goods & Services Tax, Central GST and Central Excise Division, on 02.02.2021. Therefore, it is clear that no application has been filed before the competent authority by the petitioner and as such consideration of the special rate application, as claimed by the petitioner does not arise. He submits that, in view of the above contrary averments, the case of the M/s. Jyothi Labs Ltd. (supra) is not covered the present case as in that case the special rate application was filed before the appropriate authority within time although legal point may be same.

10. I have considered the submissions advanced by the learned counsel for the parties and materials on record as well as the order of this court in M/s. Jyothi Labs Ltd. (supra).

11. This Court, in M/s. Jyothi Labs Ltd. (supra) has observed and held, which is reproduced herein below:

"3. The procedure adopted for grant of exemption is that the assesee first pays the excise duty and thereafter for the purpose of exemption the duty paid stands refunded. Initially the refund was made to the extent of 100% of the payment of the excise duty. The respondents had issued the Notification No.20/2008-Central Excise dated 27.03.2008 by which it was provided that instead of 100% refund of the excise duty paid, the refund would be subjected to the rates provided in the said notification in respect of the different categories of goods as are provided Page No.# 6/7

therein.

4. Clauses 3(1) of the Notification No.20/2008-Central Excise and Notification No.17/2008- Central Excise both dated 27.03.2008 provides that notwithstanding anything contained in the said notification the manufacturer shall have the option not to avail the rates specified in the Table provided in the said Notification and apply to the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, having jurisdiction over the manufacturing unit of the manufacturer for fixation of a special rate representing the actual value addition in respect of any goods manufactured and cleared under the notification, if the manufacturer finds that fourth-fifths of the ratio of actual value addition in the production or manufacture of the said goods to the value of the said goods, is more than the rate specified in the said Table contained in the notification.

5 We take note of that at this stage by invoking the provisions of Clauses 3(1) of the Notification No.20/2008-Central Excise and Notification No.17/2008-Central Excise both dated 27.03.2008 the petitioner company had made an application claiming that they had made certain add-ons to the goods manufactured by them and therefore claim for a special rate as provided in the said provision. In the meantime, the Notification No.20/2008-Central Excise and Notification No.17/2008-Central Excise both dated 27.03.2008 was assailed in a series of writ petitions before this Court as well as in the other High Courts also. This Court by its judgment in the relevant writ petition had set aside the Notification No.20/2008-Central Excise and Notification No.17/2008 Central Excise both dated 27.03.2008 which led to the situation that the refund of 100% of the excise duties to be paid stood restored.

6 On an appeal being carried before the Supreme Court by the Department against such judgment of the High Courts, the judgment in the Union of India and Others., -vs- V.V.P. Limited &Others was passed which is reported in 2020 SCC Online SC 378. By the said judgment of the Supreme Court, the judgments of the High Courts interfering with the Notification No.20/2008-Central Excise and Notification No. 17/2008-Central Excise both dated 27.03.2008 was interfered meaning thereby that the Notification No.20/2008-Central Excise and Notification No.17/2008-Central Excise both dated 27.03.2008 stood restored.".

12. Perusal of the above order in M/s. Jyothi Labs Ltd. (supra) reveals that similar facts and law have been considered and decided by the court. Thus, I am of the view that the above case covers the present case of the petitioner, therefore, the petitioner is entitled to be provided with similar relief.

13. Having perused the order dated 24.03.2021, passed in M/s. Jyothi Labs Ltd. (supra), it is seen that issue involved in that case and in the present case

appears to be similar on facts and law with only a difference that in that case Page No.# 7/7

the special rate application was filed before the appropriate authority and in the present case, the petitioner filed the special rate application before the Regional Officer, although addressed to the Principal Commissioner, Central Goods & Services Tax, Guwahati.

14. In view of above, as agreed to by the learned counsel for the parties, the petitioner is directed to file special rate/value addition application claiming special rate/value addition before the Principal Commissioner, Central Goods & Services Tax, Guwahati, within a period of fifteen (15) days from today. On receipt of such application by the petitioner as directed herein above, the Principal Commissioner, Central Goods & Services Tax, Guwahati to consider the application. After arriving at the special rate, if any as per the order to be passed by the Principal Commissioner, Central Goods & Services Tax, Guwahati, further process against the petitioner as per law, may be initiated. It is provided that till such decision is taken, no coercive action may be taken against the petitioner pursuant to the impugned recovery notice dated 30.12.2020. It is further provided that the Principal Commissioner, Central Goods & Services Tax, Guwahati shall consider and dispose of the application, within a period of two months from the date of receipt of the certified copy of this order.

15. With the above observation and directions, the writ petition stands disposed of.

JUDGE

Comparing Assistant