M/S North East Glass Industries vs. The Union Of INDIA And 3 Ors.

Held

The Court held that the Deputy Commissioner GST & CX Division-I, Guwahati, had erred in calculating the refund amount by applying a 36% rate instead of the 50% rate mandated by the Supreme Court's interim order and the subsequent clarification by the High Court. The Court reasoned that the Supreme Court's order for releasing 50% of the amount due, and the High Court's clarification that this was universally applicable, were binding. Therefore, the Deputy Commissioner was directed to recalculate the refund amount due to the petitioner, taking into consideration the 50% refund requirement. The Deputy Commissioner was also instructed to provide an opportunity of hearing to the petitioner and allow them to submit relevant documents before passing a reasoned order. The Court did not expressly leave any issue undecided.

Facts

The petitioner, M/s. North East Glass Industries, sought excise duty exemption under the North East Industrial Policy of 2007. Respondent authorities issued notifications in 2008 reducing the refundable excise duty to 36%, which was later set aside by a Division Bench of the High Court in 2014. The Union of India appealed to the Supreme Court, which stayed the High Court's order in 2015, subject to releasing 50% of the due amount. In 2016, the High Court clarified that this 50% refund was universally applicable. The petitioner challenged an order dated April 18, 2017, from the Deputy Commissioner GST, which calculated a refund of Rs. 16,13,454/- but used a 36% rate instead of the stipulated 50%.

Key Issues

1. Whether the calculation of the refund amount for excise duty exemption should be based on 50% of the due amount as mandated by the Supreme Court's interim order and the subsequent High Court clarification, or on the 36% rate applied by the respondent authorities? Petitioner's contention: The petitioner argued that the refund should be calculated based on the 50% refund stipulated by the Supreme Court and clarified by the High Court, and that the Deputy Commissioner's order incorrectly applied a 36% rate. Revenue/State's contention: The judgment records no specific argument from the revenue/state regarding the calculation rate. However, their action of applying 36% in the impugned order suggests they relied on the earlier notifications.