2024 (10) TMI 1128 - HC - Central Excise

Court Overturns Rejection of Rebate Claims for Outdated Rule Use; Orders Re-examination for Procedural Fairness.

M/s. Blue Whale Enterprises India Pvt. Ltd. & Anr. Versus Union of India & Anr., Deputy Commissioner of Central Excise.

The HC quashed the Revisional Authority's order rejecting rebate claims under the Central Excise Act due to the application of outdated rules. The Court ... Rejection of rebate claim - rejection on the ground that self-sealing procedure for the export containers was followed by the petitioners though such procedure was not available to the petitioners and the chain of identity of goods dispatched by the petitioners to Merchant Exporter had been broken and consequently, the identity of the export goods was not established. HELD THAT:- The Revisional Authority has referred to the Rules of Central Excise Rules, 1944 which are not applicable in the facts of the case and arrived at a conclusion by referring to the Rules 187, 187A and 187B of the Central Excise Rules, 1944 instead of referring to the Central Excise Rules, 2001 and subsequent Rules as well as the condition Nos. 2 (e) and 2 (h) of the Notification No. 19/2004 dated 06.09.2004 issued under Rule 18 of the Central Excise Rules, 2002. The impugned order dated 13.12.2021 passed by the Revisional Authority set aside, and the Revisional Authority is hereby directed to decide the Revision Applications afresh de-novo after giving adequate opportunity of hearing to the petitioners as well as considering the Central Excise Rules, 2001 and subsequent Rules and the Notification No.19/2004 dated 06.09.2014 issued under Rule 18 of the said Rules. It is clarifed that the merits of the case not considered and the Revisional Authority shall decide the Revision Applications filed by the petitioners in accordance with law. Petition disposed off. Issues:Challenge to order rejecting rebate claims under Central Excise Act, application of outdated rules in decision-making process, request for quashing and setting aside the impugned order.Analysis:The petitioners exported Pan Masala and claimed rebate on excise duties paid, but faced rejection of rebate claims through show-cause notices and subsequent adjudication orders. The closure of business operations at one location and continuation at another was highlighted. Appeals to the Commissioner (Appeals) and Revision Applications to the Government of India were unsuccessful, leading to the current petition under Article 227 of the Constitution of India.The Revisional Authority's rejection of the rebate claims was challenged on the grounds of applying outdated Central Excise Rules, 1944 instead of the relevant Central Excise Rules, 2001 and subsequent Rules. The Revisional Authority's failure to consider the correct legal framework and conditions for rebate claims led to the quashing of the impugned order. The High Court directed the Revisional Authority to re-examine the Revision Applications in accordance with the appropriate laws and notifications.The High Court emphasized that it did not delve into the merits of the case but focused on the procedural error in the Revisional Authority's decision-making process. By setting aside the impugned order and instructing a fresh consideration of the Revision Applications, the Court ensured that the petitioners receive a fair opportunity to present their case under the correct legal framework. The judgment serves to uphold the principles of procedural fairness and adherence to the relevant legal provisions in matters concerning rebate claims under the Central Excise Act.