Gauhati High Court
M/S Cent Ply vs Commissioner Cgst And Cx on 18 September, 2025
Author: M. Zothankhuma
Bench: Michael Zothankhuma
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GAHC010221732024
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THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : C.Ex.App./4/2024
M/S CENT PLY
A DIVISION OF CENTURY PLYBOARDS I LTD C/O CEMENT
MANUFACTURING CO. LTD. MAYUR GARDEN 2ND FLOOR, OPP. RAJIV
BHAWAN, GS ROAD, GUWAHATI 781005, ASSAM.
A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE
COMPANIES ACT, 1956 AND HAVING ITS REGISTERED OFFICE AT P15/1
TARATALA ROAD, 700088 AND IN THE PRESENT PROCEEDING
REPRESENTED BY SHRI RAJESH KUMAR AGARWAL ,THE EXECUTIVE
DIRECTOR OF THE APPELLANT COMPANY
VERSUS
COMMISSIONER CGST AND CX
GUWAHATI, GST BHAWAN, KEDAR ROAD, MACHKHOWA, KAMRUP
METRO ASSAM 781001
For the appellant : Mr. Ankit Kanodia, Advocate.
For respondent No. : Mr. S.C. Keyal, Adv.
Date of hearing : 16/09/2025.
Date of Judgment : 18/09/2025.
BEFORE
HONOURABLE MR. JUSTICE MICHAEL ZOTHANKHUMA
HONOURABLE MR. JUSTICE ANJAN MONI KALITA
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JUDGMENT AND ORDER (CAV)
(M. Zothankhuma, J)
1. Heard Mr. Ankit Kanodia, learned counsel for the appellant. Also heard Mr.
S.C. Keyal, learned counsel for the respondent.
2. The appellant is a new industrial unit engaged in the manufacture of
Plywood, Block Board and Flush Door, falling under Chapter Sub-Head 44 of the
Central Excise Tariff Act, 1985. The case of the appellant is that to be eligible for
exemption and grant of special rebate of 65% under notification No. 20/2007-CE
dated 25/04/2007, the appellant was to be provided with an Eligibility Certificate by
the respondent for claiming the said special exemption and grant of special rebate of
65%.
3. The appellant's counsel submits that the notification No. 20/2007-CE dated
25/04/2007 allows for a refund of duty paid through the Current Account, at the
specific rate of value addition as shown in the schedule to the said notification. The
appellant's counsel submits that the appellant had started its commercial production
on 04/02/2009 and in terms of the notification dated 25/04/2007, the manufacturer
has to make an application seeking the special rebate/rate for value addition in writing
to the Commissioner, not later than 30 th September of the financial year, for which the
special rebate/rate is sought. It further provides that a manufacturer, who commences
commercial production on or after 1 st day of April, 2008, may file an application in
writing to the Commissioner for the fixation of special rebate/rate not later than 30th
day of September of the financial year, subsequent to the year in which it commences
production. However, for fixation of the special rebate/rate for other financial years,
the application for getting the fixation of special rebate/rate, application would have to
be made by the 30th day of September of the said financial year, which is condonable
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by a period of one month.
4. The appellant's counsel submits that the appellant did not submit an
application for fixation of a special rebate/rate of value addition in terms of the
notification No. 20/2007-CE dated 25/04/2007 for the financial year 2009-10, during
the financial year 2009-10. Instead, it had submitted an application dated 17/07/2009
asking for an Eligibility Certificate from the respondents, to entitle it to apply for
fixation of the special rebate/rate in terms of the notification No. 20/2007-CE dated
25/04/2007. The respondents however issued the eligibility certificate to the appellant,
after the expiry of the financial year 2009-10, vide letter dated 14/05/2010, stating
that it had found the appellant to be eligible for exemption for grant of special
rebate/rate in terms of the notification No. 20/2007-CE dated 25/04/2007. The
appellant thereafter submitted an application dated 24/05/2010 to the respondent,
requesting for fixation of a special rebate/rate representing the actual value addition
for the financial year 2008-09, in terms of the notification No. 20/2007-CE dated
25/04/2007. The same was however corrected by the appellant by asking for fixation
of a special rebate/rate for the financial year 2009-10, as reflected in para 6 of the
order No. 17/SR/COMMR/GHY/2010-11 dated 18/01/2011 issued by the Office of the
Commissioner of Central Excise and Service Tax Department.
5. The respondent, however, vide the above letter dated 18/01/2011 rejected
the appellant's application for grant of a special rebate/rate by holding that the
application of the applicant was hit by limitation.
6. Dissatisfied with the rejection of the appellant's application for grant of a
special rebate/rate in terms of the notification No. 20/2007-CE dated 25/04/2007, the
appellant filed an appeal before the CESTAT, Kolkata on 04/04/2011 vide Excise Appeal
No. 207/2011. However, the CESTAT dismissed the Excise Appeal No. 207/2011 vide
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its decision dated 12/08/2024, by upholding the adjudication order issued by the
Commissioner of Central Excise and Service Tax, Guwahati.
7. The appellant's challenge to the decision of the respondent and the decision
made by the CESTAT, Kolkata is that in terms of the notification No. 20/2007-CE dated
25/04/2007, the appellant, which was a new Industrial Unit, was to be first given a
Eligibility Certificate issued by the respondent, to show that it was eligible to claim the
special rebate/rate for refund of duty paid in terms of the notification No. 20/2007-CE
dated 25/04/2007. Without the Eligibility Certificate being issued by the respondent,
the new Industrial Unit could not have made a claim for special rebate/rate/refund of
duty in terms of the said notification No. 20/2007-CE dated 25/04/2007.
8. The appellant's counsel submits that due to the respondent having issued
the Eligibility Certificate to the appellant only on 14/05/2010, informing the appellant
that it was eligible for grant of special rebate/rate/exemption in terms of the
notification No. 20/2007-CE dated 25/04/2007, there was no occasion for the
appellant to have made a claim for the said special rebate/rate prior to 30/09/2009 or
30/10/2009 i.e. for the financial year 2009-2010. He submits that as the appellant had
immediately submitted an application for grant of the special rebate/rate on
24/05/2010 i.e. 10(ten) days after it was informed that it was eligible to the grant of
special rebate/rate, the rejection of the appellant's claim on the ground that the same
had been submitted beyond the time limit was illegal.
9. The appellant's counsel submits that there being substantial compliance by
the appellant, for grant of special rebate/ rate in terms of the notification No.
20/2007-CE dated 25/04/2007, by submitting an application dated 17/07/2009, asking
if it was eligible to be granted the special rebate/rate, there was substantial
compliance on the part of the appellant to be granted the special rebate/rate. It was
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only due to the negligence of the respondents in giving a late Eligibility Certificate that
the appellant could not make a claim for the special rebate/rate in time. He submits
that the doctrine of Substantial Compliance required the respondent to give the
benefit of the notification No. 20/2007-CE dated 25/04/2007 to the appellant.
10. Mr. S.C. Keyal, learned counsel for the respondent, on the other hand,
submits that there is no provision in the notification No. 20/2007-CE dated
25/04/2007, requiring the appellant to have an Eligibility Certificate issued by the
respondent, to avail of the fixation of special rebate/rate in terms of the said
notification. He submits that the appellant had been submitting general refund claims
regularly by the 7th of next month, as stipulated in the said notification, without
waiting for any eligibility certificate from the respondent for grant of the general
refund claim. Similarly, the appellant could have applied for the special rebate/rate
without any eligibility certificate from the respondent. If the appellant was eligible, he
would have been given the special rebate/rate. If not, the appellant would not have
been given the same. As the appellant had submitted his application for fixation of
special rebate/rate in terms of the notification No. 20/2007-CE dated 25/04/2007
beyond the stipulated date for submission of the application, there was no infirmity
with the rejection of the appellant's application by the respondent and the CESTAT. He
submits that as the appellant has missed the bus, the stand of the appellant that an
eligibility certificate is required is an afterthought and the same is not a requirement
to avail the benefit. He submits that the letter dated 14/05/2010 informing the
appellant that it was eligible to be granted the special rebate/rate in terms of the
notification, was not an eligibility certificate but it was only an information that it was
eligible for grant of the said benefit. He accordingly submits that the appeal should be
dismissed.
11. We have heard the learned counsels for the parties.
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12. The notification No. 20/2007-CE dated 25/04/2007 requires an application
for grant of special rebate/rates to be made by 30 th September of the concerned
financial year, i.e. 2009-2010. There is also a condonation period of 30 days for filing a
late application for grant of special rebate. In the present case, the appellant has not
submitted any application for grant of any special rebate in terms of the notification
No. 20/2007-CE dated 25/04/2007 for the financial year 2009-10 and had allegedly
submitted an application dated 17/07/2009 to the respondent, asking for an Eligibility
Certificate, to ascertain whether it was eligible to claim special rebate/rate under the
notification No. 20/2007-CE dated 25/04/2007. The respondents had made a
communication to the appellant that it was eligible to be granted exemption and grant
of special rebate/rate in terms of the notification No. 20/2007-CE dated 25/04/2007 as
a new unit, vide letter dated 14/05/2010. However, the said letter dated 14/05/2010
does not refer to any letter, to enable us to know whether the said letter was in reply
to the appellant's letter dated 17/07/2009, which was alleged to have been submitted
by the appellant. Even if the appellant had submitted a letter dated 17/07/2009 to the
respondent, asking for an eligibility certificate to avail the special rebate/rate, there is
nothing to show that an eligibility certificate was a pre-requisite for applying for a
special rebate/rate. The only requirement was that a manufacturing unit, which was
desirous of being granted special rebate/rate in terms of the notification, require that
it submitted its application prior to 30th September of the said financial year.
13. The above being said, the findings of the CESTAT in Excise Appeal No.
207/2011, in its decision dated 12/08/2024, is reflected herein below as follows :-
"9. In the impugned OIO, the adjudicating authority has given the following detailed findings
reproduced paras :-
"2. Para 3(1) of the notification provides that the manufacturer have to make application
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seeking special rebate/rate for value addition in writing to the Commissioner not later than
the 30th September. It also further provides that, Commissioner may, if he is satisfied that
the manufacturer was prevented by sufficient cause from making the application within the
aforesaid time, allow such manufacturer to make the application within a further period of
thirty days. The applicant submitted the application to this office on 24.05.2010 for fixation of
special rebate/rate for the financial year 2009-10. The due date for submission of the
application was 30.09.2009 and in any case not later than 30.10.2009.
4. I find that there was indeed delay in determining the eligibility of the unit for exemption
and grant of refund for the month of August 2009 to May 2010 under the Notification 20/07-
CE dated 25.4.07 (as amended) by the Assistant/ Deputy Commissioner, Central Excise,
Guwahati, but I find that the applicant was regularly submitting the refund claims by 7th of
next month, as stipulated in the notification ibid, without waiting for the order of eligibility for
refund.
5. I find that there is no provision in the notification that the applicant should have waited for
confirmation of the unit's eligibility of refund or sanction of refund by the concerned Assistant
or Deputy Commissioner to file the application for special rebate/rate to the Commissioner
under para 3(1) of the notification. There was no bar to the applicant in submitting the
application for fixation of special rebate/rate for 2009-10 by 30th September 2009 based on
the audited balance sheet of 2008-09, when he was submitting the refund claims every
month on the reasonable belief that his unit was eligible for refund under the notification
20/07-CE dated 25.4.07 (as amended).
6. I am, therefore, not inclined to accept the applicant's contention that there was no delay in
submission of the application for special rebate/rate on 24th May 2010 after getting the
confirmation of eligibility for exemption on 14th May 2010 and hold that the submission of
the application is hit by limitation of time and liable to be rejected."
10. After going through the above findings of the adjudicating authority, we find that he has
given a very detailed finding as to why he is rejecting the application filed by the appellant.
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We do not see any reason to interfere with this order.
14. On considering the fact that the appellant has not been able to show that to
avail the benefit of grant of fixation of special rebate/rate in terms of the notification
No. 20/2007-CE dated 25/04/2007, an Eligibility Certificate was required to be issued
by the respondent to enable the appellant to avail the said benefit, we are unable to
accept the said contention of the appellant's counsel that the grant of fixation of
special rebate/rate could not be done without getting an Eligibility Certificate from the
respondent.
15. No provision of the notification No. 20/2007-CE dated 25/04/2007 has been
show to us, where it has been provided that an Eligibility Certificate was a pre-
requirement for grant of fixation of special rebate/ rate under the said notification.
There was no bar for the appellant to have made a claim for grant of fixation of
special rebate/rate in terms of the notification No. 20/2007-CE dated 25/04/2007 for
the financial year 2009-10 by submitting an application before 30 th September, 2009.
However, the same was not done by the appellant.
16. The learned CESTAT in its decision dated 12/08/2024 passed in Excise
Appeal No. 207/2011 has stated that the appellant was regularly submitting regular
refund claims by the 7th of the next month, as stipulated in the notification No.
20/2007-CE dated 25/04/2007, without waiting for the order of eligibility for general
refund. As the appellant has been claiming a general refund in terms of the
notification No. 20/2007-CE dated 25/04/2007 on a regular basis, without waiting of
an Eligibility Certificate for grant of a general refund, there was no reason for the
appellant to have waited for an eligibility certificate, before asking for grant of fixation
of special rebate/rate, in terms of the said notification, especially when nothing is
shown to us regarding the requirement of having an eligibility certificate. Further, we
are of the view that the letter dated 14/05/2010 issued by the respondent is not an
eligibility certificate, but is only an intimation to the appellant stating that it was
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eligible to claim special rebate/rate in terms of the notification No. 20/2007-CE dated
25/04/2007.
17. As there is nothing to show that there was any bar for the appellant to have
made a claim for grant of fixation of special rebate/rate in terms of the notification No.
20/2007-CE dated 25/04/2007 or that there was a prior requirement of having an
Eligibility Certificate from the respondents in that regard, we do not find any ground to
interfere with the decision of the respondent and CESTAT.
18. The appeal is accordingly dismissed.
JUDGE JUDGE
Comparing Assistant
