2020 (2) TMI 751 - AT - Central Excise

Tribunal rejects appeals, upholds duty exemption for Solvex-GL under Notification No.33/99.

The Tribunal held that the review order was beyond the statutory time limit and that Solvex-GL was eligible for duty exemption under Notification ... Statutory period for review - benefit of N/N. 33/99 dated 08.07.1999 - whether in respect of Excise Appeal, the Review Order dated 08.09.2009 is beyond the period statutorily allowed for review? - HELD THAT:- Though the Commissioner may claim that the issue was not brought to his notice by way of proposing a review, it is very difficult to comprehend as to how such a huge refund involving amount of ₹ 25.00 Crores was not brought to the notice of the Commissioner formally or informally. Therefore there are no merits in the contentions of the appellants that the review could not be completed within the time limit prescribed as the order was not received and that the same could be taken up only after the receipt of duly attested photocopy of the Order-in-Original. In view of the above we hold that the review is undertaken much after the stipulated time limit prescribed therein. Whether in the facts and circumstances of the case, the appellants are eligible for the exemption under the said Notification No.33/99 dated 08.07.1999? - HELD THAT:- Notification No.33/99 provides for exemption to goods specified in the schedule appended to the Notification and cleared from a unit located in the state of Assam or Tripura or Meghalaya or Mizoram or Nagaland or Arunachal Pradesh as the case may be. From so much of the duty of excise, leviable thereon under any of the said acts as is equivalent to the amount of duty paid by the manufacturer of goods from the account current maintained under Rule 9 read with Rule 173 G of the Central Excise Rules, 1944 - it is apparent that the exemption is available to the gas based intermediate products. Sub-Sl. No. 13(i) of the schedule relates to gas exploration and production. Whereas Sl.No.13 mentions about gas based inter-mediate products. Sub-Sl. No.(i) refers to gas exploration and production. It is evident that the schedule not only refers to certain products but also to certain processes. The only inference one can get is that the products generated in the processes mentioned are covered by the entry and are eligible for exemption. The products mentioned at Sub-Sl. Nos. of Sl.No.13 to the schedule to the Notification are not gases. If one takes the view that the exemption is only applicable to products occurring in gaseous state are alone eligible for exemption to the items like plastics, fertilizers. Ammonium Nitrate etc. would not have formed a place in the list of the products made to be eligible for the Notification. Therefore an appropriate reading of the Notification would give an understanding that the main activity referred to therein is gas exploration and products which emerge as finally or intermediately in the process are eligible for exemption. As the wordings of the Notification are very clear no two interpretations are available and as such the case law cited by the learned Authorized Representative are of no avail. The Notification squarely covers the impugned product and the benefit of the same is available to the respondents - the issue relating to whether or not R/45 was reviewed within the time limit becomes inconsequential - appeal dismissed. Issues Involved:1. Timeliness of the Review Order2. Eligibility for Duty Exemption under Notification No.33/99Detailed Analysis:1. Timeliness of the Review Order:The primary issue was whether the Review Order dated 08.09.2009 for Excise Appeal No.887 of 2011 was beyond the statutory period allowed for review. The Commissioner claimed that the refund Order R-45/2008-09 dated 19.06.2008, communicated on 26.09.2008, was not received due to postal irregularity. The Commissioner’s office received a photocopy of the Order-in-Original only on 19.06.2009, which was then reviewed. The Commissioner (Appeals) questioned whether any enquiry was conducted with postal authorities and whether steps were taken to rectify the mistake. The Tribunal found no such enquiry was undertaken and held that the respondents should not be penalized due to postal irregularities. The Tribunal concluded that the review was undertaken beyond the stipulated time limit.2. Eligibility for Duty Exemption under Notification No.33/99:The second issue was whether the appellants were eligible for the exemption under Notification No.33/99 dated 08.07.1999. The department argued that Solvex-GL, being a liquid and not a gas, was not covered under Sl.No.13(i) of the Notification. The Commissioner (Appeals) and the Tribunal found that Solvex-GL, produced during the manufacture of LPG, qualifies as a gas-based intermediate product. The Tribunal noted that the schedule to the Notification includes various products and processes, indicating that the exemption applies to products generated during gas exploration and production. The Tribunal rejected the department's argument that the exemption applies only to gaseous products, noting that the Notification covers intermediate products produced during gas production, regardless of their physical state.Conclusion:The Tribunal held that the review order was beyond the statutory time limit and that Solvex-GL was eligible for duty exemption under Notification No.33/99. Consequently, all appeals filed by the department were rejected on merits. The Tribunal also noted that the appeals E/980/2011- E/986/2011 were covered by the National Litigation Policy and were liable for dismissal.Order Pronounced in Open Court on 17 January 2020.