M/S. Godrej Consumer Products LTD. vs. Union Of INDIA And 2 Ors.

Held

The Court noted that the apprehension of the petitioners regarding demand and recovery without deciding special rate applications was no longer an issue, as the Commissioner, Central Excise, had passed an order dated 15.07.2022 on the special rate applications. Consequently, the Court found no further or effective order was necessary at that stage. The Court did not explicitly rule on the merits of the special rate applications themselves but acknowledged the Commissioner's order. The Court held that it was open to the petitioners to challenge the order dated 15.07.2022 before the appropriate forum if needed. The Court did not decide the substantive legal questions regarding the entitlement to refunds or the validity of recovery actions, as the basis for the writ petitions had been addressed by subsequent administrative action.

Facts

The petitioners, M/s. Godrej Consumer Products Ltd., engaged in manufacturing excisable products in Assam, sought benefits under the Industrial Policy of 1997 and its 2007 extension, which included Central Excise refunds. Initially 100%, these refunds were later curtailed. Notifications dated 27.03.2008 and 10.06.2008, which modified the refund benefits, were challenged and set aside by the High Court and upheld by the Supreme Court in Union of India & Anr. Vs. M/S V.V.F Limited & Anr. (2020). During the pendency of Supreme Court proceedings, 50% of the refund was released provisionally upon furnishing solvency certificates. The petitioners had also applied for special rates under the aforementioned notifications, some of which were pending adjudication. The present writ petitions were filed apprehending recovery of the 50% provisional refund granted by the department, following the Supreme Court's judgment.

Key Issues

1. Whether the respondent authorities should be restrained from initiating recovery proceedings for the 50% refund granted under interim orders until the petitioners' pending special rate applications are adjudicated, as argued by the petitioners. The petitioners contended that the Notifications dated 27.03.2008 and 10.06.2008 provided for special rate applications, and their pendency should prevent recovery. They relied on the principle that recovery should not precede final determination. The Revenue did not record any specific argument on this issue in the judgment. 2. Whether the respondent authorities should adjudicate the special rate applications on merits without being hyper-technical, as prayed by the petitioners. The petitioners argued for a fair and timely adjudication due to hardships faced. The Revenue did not record any specific argument on this issue in the judgment. 3. Whether the respondents should be restrained from taking action on surety bonds without final determination of dues and final adjustments, as argued by the petitioners. The petitioners sought to prevent premature action on security furnished. The Revenue did not record any specific argument on this issue in the judgment.