Uma Polymers LTD vs. The Union Of INDIA And 6 Ors

Held

The Court held that the issue was squarely covered by a common order dated 02.03.2023 passed in a batch of similar writ petitions, including W.P.[C] no. 5675/2022. In that common order, the Court had considered a communication dated 22.02.2023 from the Government of India, Ministry of Commerce and Industry. This communication clarified that units which had paid their tax dues by utilizing CENVAT credit, even if the stage to pay further taxes by cash had not yet arrived, would be considered as having 'availed the benefits' under the earlier exemption notification dated 25.07.2007. Consequently, such units, including the petitioner, would be entitled to the benefits under the budgetary support scheme dated 05.10.2017. The Court directed the petitioner to submit a certified copy of the present order and the common order dated 02.03.2023 to the respondent no. 6 for necessary action.

Facts

The petitioner, Uma Polymers Ltd., assails a Demand Notice dated 15.03.2022 issued by the Assistant Commissioner, GST and Central Excise, Guwahati (respondent no. 6). The notice demanded repayment of Rs. 26,10,592/-, which had already been refunded to the petitioner, along with interest. The demand was based on the ground that the petitioner's industrial unit did not qualify for an exemption under Notification no. 20/2007-CE dated 25.04.2017, and consequently, was ineligible for budgetary support under a scheme notified on 05.10.2017. The revenue contended that to be eligible, the unit must have availed the exemption under Notification no. 20/2007 immediately before 01.07.2017. The petitioner had discharged its Central Excise duty liability by debiting its CENVAT Credit Account until June 2017.

Key Issues

1. Whether an industrial unit that discharged its Central Excise duty liability by utilizing CENVAT credit, prior to the stage of paying further taxes by cash, can be considered to have 'availed the benefit' under Notification no. 20/2007-CE dated 25.04.2017, for the purpose of eligibility under the budgetary support scheme notified on 05.10.2017? Petitioner's contention: The petitioner argued that by utilizing CENVAT credit to discharge its duty liability, it had effectively availed the benefit of the exemption notification. The subsequent refund demand was therefore unjustified. Revenue's contention: The revenue argued that the petitioner had not 'availed' the exemption in the manner contemplated by the scheme, as it had paid its dues using CENVAT credit and had not yet reached the stage where it would have had to pay duty in cash after exhausting the credit. Therefore, it was not eligible for the budgetary support.