D.B. Power Limited vs. Union Of INDIA And Ors.

Held

The Court noted that the relief sought by the Petitioner, which was an extension of the excise duty exemption period for Mega Power Projects from 120 months to 156 months, had been satisfied by an amendment to the Finance (No. 2) Bill, 2024. This amendment, enacted retrospectively, extended the time period for excise benefits to 156 months. Consequently, the Court found that the Petitioner's prayer had been fulfilled. The Court also acknowledged that the question of when the 156 months is to be counted, specifically whether it is from the date of clearance of goods or the submission of the completion certificate, deserved consideration. Pending further clarification on this specific aspect, the Court directed that the subject Bank Guarantees of the Petitioner shall not be invoked, encashed, or appropriated until the next date of hearing, ensuring the Petitioner's financial security while the dispute over the interpretation of the period continues.

Facts

The Petitioner, D.B. Power Limited, filed a writ petition challenging an Office Memorandum dated March 10, 2023, which stipulated that proportional duty would be recoverable if Mega Power Project certificates for goods cleared at an exempted rate of Excise Duty were not submitted after the expiry of the 120-month exemption period. The Petitioner sought an extension of this period to 156 months, similar to a Customs Duty notification. The Court had previously directed recovery proceedings to be kept in abeyance. Subsequently, the Ministry of Power filed an affidavit stating that the Finance Act, 2024, amended the Central Excise Act to extend the excise duty exemption period for Mega Power Projects to 156 months, rendering the petition infructuous. The Department later proposed to appropriate Bank Guarantees furnished by the Petitioner, citing non-submission of the completion certificate within the extended period. The Petitioner argued that the 156-month period should be counted from the date of goods clearance, not from the issuance of the completion certificate.

Key Issues

1. Whether the Office Memorandum dated March 10, 2023, which stipulated recovery of proportional duty for non-submission of Mega Power Project certificates after 120 months, was valid, and if the Petitioner was entitled to an extension of this period to 156 months for excise duty exemption, similar to the extension granted for customs duty. - Petitioner's Argument: The Petitioner argued that the period of exemption for Mega Power Projects should be extended from 120 months to 156 months for excise duty, mirroring the extension provided for customs duty via Notification No. 31/2022-Customs. They sought a writ of certiorari to set aside the impugned Office Memorandum and a writ of mandamus directing the respondents to issue a corresponding circular for excise duty. - Revenue's Argument: The Revenue's stance, as reflected in the subsequent developments, was that the period for excise duty benefits was indeed extended to 156 months through an amendment to the Finance Act, 2024. However, they later sought to appropriate bank guarantees, contending that the Petitioner had not submitted the required completion certificate within the 156-month period, which they interpreted as the period for submission of the certificate itself.