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of <h1>Tribunal Remands Case for Fresh Review of Special Rate Fixation Under Section 36% to Prevent Premature Demands</h1> <h3>Kokuyo Camlin Ltd Versus Commissioner of Central Excise, Goods & Service Tax, Jammu</h3> Kokuyo Camlin Ltd Versus Commissioner of Central Excise, Goods & Service Tax, Jammu - TMI ISSUES: Whether demands issued and confirmed prior to the final fixation of special rate for value addition under Notification No.56/2002-CE and its amendment Notification No.19/2008 are premature and liable to be set aside.Whether the adjudicating and appellate authorities erred in confirming demands despite pending applications for fixation of special rates before the jurisdictional Commissioner and a pending appeal before the Tribunal.Whether the principle established in the Supreme Court decision regarding refund applications and the fixation of special rates applies to the present case.Whether it is appropriate to confirm demands and raise demands when the special rate fixation for value addition is under consideration and the appellants have continued to avail self-refunds on claimed special rates. RULINGS / HOLDINGS: The demands raised and confirmed by the Joint Commissioner and Commissioner (Appeals) were held to be premature as the special rate for value addition was not yet finalized by the competent authority and the appeal before the Tribunal was pending.The adjudicating and appellate authorities acted imprudently and failed to consider the pending applications for fixation of special rates, thereby causing unnecessary multiplicity of litigation.The Tribunal fixed the special rate at 58.60% for the relevant period and directed that the competent authority decide the applications for special rates for subsequent years within a stipulated time, emphasizing that demands should not be confirmed before such decisions.The principle that 'the route of refund is always available' if the appellant succeeds was found insufficient justification for confirming demands prematurely. RATIONALE: The legal framework involves Notification No.56/2002-CE and its amendment Notification No.19/2008, which prescribe exemption conditions based on value addition percentages and special rate fixation procedures under Para 2.1 and Para 2C(g).Section 11A of the Central Excise Act, 1944, empowers issuance of show cause notices and demands, but such powers must be exercised considering pending applications and appeals to avoid premature adjudication.The Tribunal relied on its own prior Final Order fixing the special rate at 58.60% and Supreme Court precedent emphasizing that refund applications must be decided on merits and not summarily rejected or demands confirmed without final determination.The decision reflects a doctrinal emphasis on procedural fairness and avoidance of unnecessary litigation, mandating that authorities await final fixation of special rates before confirming demands.The Tribunal remanded the matter with directions to the appellate authority to decide the appeal only after the jurisdictional Commissioner decides on the pending special rate applications within four weeks, ensuring expeditious resolution.
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