Excise duty rebate on aviation fuel for Nepal-bound aircraft upheld under consistent administrative instructions

Rebate of excise duty on Aviation Turbine Fuel supplied as stores to aircraft operating to Nepal was treated as admissible despite restrictive notification wording, because longstanding administrative instructions and later supplementary instructions consistently extended the concession to Nepal-bound supplies. The revisional authority also followed the earlier revisional order in the assessee's own case and the Bombay High Court's direction to apply that settled departmental understanding. On that basis, the rebate claims were held admissible where otherwise in order, and the impugned orders were set aside with directions to sanction the claims.

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Issues: Whether rebate of excise duty was admissible on Aviation Turbine Fuel supplied as stores to aircraft operating to Nepal, despite the restrictive language of the notification, and whether the administrative instructions and supplementary manual could be relied upon to extend the benefit.

Analysis: The governing notification restricted rebate for foreign countries having land frontiers with India to specified destinations and Nepal was not included. However, the record also contained longstanding administrative instructions extending the rebate concession to Nepal and similar land-frontier countries, together with later departmental supplementary instructions treating supplies to Nepal-bound aircraft on par with supplies to other foreign destinations. The earlier revisional order in the assessee's own case and the Bombay High Court's direction required the matter to be decided consistently with those administrative instructions. In that setting, the revisional authority applied judicial discipline, followed the earlier departmental understanding, and treated the rebate claims as admissible where otherwise in order.

Conclusion: Rebate on the disputed supplies was held admissible and the impugned orders were set aside, with directions to sanction the rebate claims if otherwise in order.

Ratio Decidendi: Where the statutory notification is supplemented by binding administrative instructions consistently extending a rebate benefit, and the matter has already been determined on that basis in earlier proceedings, the authority must follow that consistent construction and grant the rebate accordingly.

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