2022 (9) TMI 486 - HC - Central Excise

Court dismisses appeal for failure to meet Notification No. 33/99-CE requirements, upholding strict compliance with exemption conditions.

M/s. Lukwah Tea Estate Versus The Commissioner Of Cgst And Central Excise And Anr. Dibrugarh, Assam The Deputy Commissioner Central Excise Division Jorhat Assam

The court dismissed the appeal, ruling against the appellant for failing to meet the procedural requirements of Notification No. 33/99-CE. The court ... Area Based Exemption - North-East region - rejection of exemption claim under the Notification 33/99-CE, dated 08.07.1999 barred by the Principle of res judicata - Whether the Ld. Respondent Authorities have committed judicial indiscipline, while continuing revenue litigation, without taking recourse of judicial appeal against the Order of this Hon'ble Court, dated 26.04.2013, if were aggrieved? - entitlement to get interest for delayed refund under the exemption scheme in terms of Section11B of the Central Excise Act, 1944 - Time Limitation. HELD THAT:- A perusal of the pleadings including the reply dated 08.01.2009 filed by the appellant before the authority concerned reveals that such a procedure as prescribed in the Notification No. 33/99-CE dated 08.07.1999, had not been followed by the appellant/assessee. What instead has been urged is that since the provisions of Section 11B of the Central Excise Act, 1944 are not applicable, no limitation is applicable and therefore, the claims made by the appellant cannot be debarred on the ground of limitation. While there is no quarrel with the proposition that in view of the several clarificatory notifications issued by the Custom and Central Excise Board, that limitation provided under Section 11B of the Central Excise Act, 1944 are not applicable in case of exemptions allowable under the Notification No. 33/99-CE dated 08.07.1999, however unless suitably amended by the Central Government, the procedure prescribed thereunder including the requirement of filing statement of duty paid by the manufacturer by the 7th of next month as prescribed under Notification cannot be waived at the instance of the manufacturers/assessee unilaterally. The appellant even before this Court has not been able to substantiate its contentions that the increased installed capacity of their factory, in terms of the Notification No. 33/99-C.E. dated 08.07.1999 was brought to the notice of the Range Officer as had been claimed by the assessee before the Adjudicating Authority. Such statements of fact which could not be supported by the appellant before the adjudicating authority as well as the Appellate Authority and the CESTAT cannot give rise to any “question of law” let alone “substantial question of law”. It is well settled that the Tribunal is the final authority of facts. Where there is a finding of fact recorded by the Tribunal on the basis of records available, the High Court should be slow in interfering or upsetting such finding of fact arrived at by the CESTAT unless it can be shown that such findings of fact by the CESTAT are not supported by materials on record or the Tribunal has erroneously interpreted the materials which were available on record. Such is not the case in the present proceedings. There is no averment that the appellant had complied with the twin requirements prescribed under Notification No. 33/99-C.E. dated 08.07.1999 to make them eligible for the refunds claimed. Mere statement that they had undertaken substantial expansion would not make them eligible for the claims of refund. The twin condition prescribed under Notification 33/99-C.E. must be strictly complied with - A mere perusal of the Notification No. 33/99-C.E. dated 08.07.1999 reveals that the conditions prescribed for claiming any exemption are clear and specific and there is no ambiguity. The conditions required to be fulfilled by an assessee who seek to claim the benefit under the said notification will have to satisfy the conditions prescribed. The fact that no limitation prescribed under the said notification No. 33/99-C.E. will not make the answer eligible for the exemption/refund claim, unless they satisfy the procedure prescribed under the said notification. Merely because no limitation is prescribed and/or applicable cannot be a ground to consider their claims for exemption when they satisfy the prescriptions under the said notification. The assessee has failed to furnish adequate evidences in support of their claims that they had complied with the prescriptions under Notification No. 33/99-C.E. - the substantial question of law is answered against the appellant and in favour of the respondents. Appeal disposed off. Issues Involved:1. Whether the CESTAT's rejection of the appellant's exemption claim under Notification 33/99-CE is barred by the principle of res judicata.2. Whether the authorities committed judicial indiscipline by continuing revenue litigation without appealing the High Court's previous order.3. Whether the appellant is entitled to interest for delayed refund under the exemption scheme.4. Whether RT-12 Returns submitted by the appellant should be considered as a statement for refund under the exemption notification.5. Whether the expansion mentioned in RT-12 Returns and documentary evidence were sufficient for claiming exemption.6. Whether the non-existing ground of limitation under the exemption notification was applicable.7. Whether the CESTAT erred in recognizing the High Court's direction allowing exemption benefit but rejecting it in the impugned order.Detailed Analysis:1. Principle of Res Judicata:The appellant argued that the CESTAT's order rejecting their exemption claim was barred by the principle of res judicata, as the same issue had been previously decided by the High Court in favor of the appellant. The court examined whether the previous judgment conclusively determined the issue of exemption under Notification 33/99-CE, dated 08.07.1999. The court found that the principle of res judicata did not apply because the factual matrix and compliance with the notification conditions were still in question.2. Judicial Indiscipline:The appellant claimed that the authorities committed judicial indiscipline by continuing revenue litigation without appealing the High Court's previous order. The court noted that although the authorities did not appeal the earlier decision, the factual findings regarding compliance with the exemption notification's conditions were crucial. The court held that the authorities were within their rights to verify compliance with the conditions of the notification, thus rejecting the claim of judicial indiscipline.3. Interest for Delayed Refund:The appellant sought interest for delayed refund under the exemption scheme. The court referred to Section 11B of the Central Excise Act, 1944, and the relevant date for considering interest on delayed refunds. The court emphasized that the exemption notification did not prescribe a time limit for claiming refunds, but the appellant failed to comply with the procedural requirements of filing the necessary statements and documents. Therefore, the claim for interest on delayed refunds was not justified.4. RT-12 Returns as Statement for Refund:The court examined whether RT-12 Returns could be considered as a statement for refund under Para 2 of Notification No. 33/99-CE. The court found that the appellant did not submit the required statement of duty paid from the account current to the Assistant Commissioner or Deputy Commissioner by the 7th of the next month as mandated by the notification. The RT-12 Returns alone were insufficient to meet the notification's requirements.5. Sufficiency of Expansion Evidence:The appellant contended that the expansion mentioned in RT-12 Returns and the accompanying documentary evidence were sufficient for claiming exemption. The court noted that the appellant failed to produce adequate evidence to support their claim of substantial expansion and its communication to the Range Officer. The court upheld the findings of the adjudicating authority and the CESTAT, which concluded that the appellant did not meet the notification's conditions.6. Applicability of Limitation:The court addressed whether the non-existing ground of limitation under Notification No. 33/99-CE was applicable. The court reiterated that while the notification did not prescribe a limitation period, the procedural requirements for claiming exemptions must be strictly followed. The appellant's failure to adhere to these requirements justified the rejection of their refund claim, notwithstanding the absence of a limitation period.7. CESTAT's Recognition of High Court's Direction:The court examined whether the CESTAT erred in recognizing the High Court's direction allowing exemption benefits but rejecting it in the impugned order. The court found that the CESTAT correctly identified the need for compliance with the notification's procedural requirements. The appellant's failure to produce evidence of compliance led to the rejection of their claim. The court upheld the CESTAT's decision, emphasizing the importance of strict adherence to exemption notification conditions.Conclusion:The court dismissed the appeal, concluding that the appellant failed to comply with the procedural requirements of Notification No. 33/99-CE. The substantial questions of law were answered against the appellant, affirming the necessity of strict compliance with exemption notification conditions to claim benefits. The court upheld the findings of the adjudicating authority and the CESTAT, emphasizing that factual determinations by the Tribunal are final unless shown to be unsupported by evidence or based on erroneous interpretations.