Green Vision Industries vs. The Union Of INDIA And 2 Ors

Held

The Court held that the respondent authorities were indeed obligated to decide the petitioner's application for a special rate under Clause 3(1) of Notification No. 20/2008-CE dated 27.03.2008 before proceeding with the recovery of Central Excise duty. The Court noted that similar writ petitions had been disposed of by co-ordinate benches with directions to the department to first consider the special rate applications pending before the authorities and then re-decide the matter afresh, keeping the demand notices in abeyance. The Court found no reason to deviate from this established position, especially since the department had not filed any appeal or review against those prior orders. Consequently, the Court made the ad-interim order absolute, directing the respondent No. 2 (Commissioner, GST, Dibrugarh) to expeditiously consider and dispose of the petitioner's special rate application on its merits, affording the petitioner an opportunity of hearing. The impugned demand-cum-show cause notices were ordered to be kept in abeyance until a decision on the special rate application was made. The question of the legality of the impugned demand notices was expressly left undecided.

Facts

The petitioner, Green Vision Industries, a partnership firm engaged in manufacturing cement bricks, paver blocks, and tiles, challenged a recovery notice dated 28.05.2020 and a demand-cum-show cause notice dated 08.01.2021 issued by the Assistant Commissioner, Central GST, Tinsukia. These notices sought recovery of Central Excise duty purportedly based on a Supreme Court judgment. The petitioner had availed area-based exemption under Notification No. 32/99-CE dated 08.07.1999, which was later amended. Subsequently, under Notification No. 20/2008-CE dated 27.03.2008, the petitioner applied for a special rate of refund based on value addition. The impugned notices were issued without deciding this special rate application, and the petitioner contended this was contrary to the notification and bad in law.

Key Issues

1. Whether the respondent authorities were legally obligated to decide the petitioner's application for a special rate under Clause 3(1) of Notification No. 20/2008-CE dated 27.03.2008 before issuing the impugned demand-cum-show cause notices for recovery of Central Excise duty? Petitioner's arguments: The petitioner argued that Clause 3(1) of Notification No. 20/2008-CE provided a legal right to manufacturers to apply for a special rate, and the authorities were duty-bound to consider such applications before initiating recovery proceedings. Failure to do so rendered the demand notices bad in law. They relied on the principle that a pending application for a special rate, if accepted, could lead to a higher refund or no recovery being necessitated, thus requiring prior adjudication. They also referred to co-ordinate bench orders in similar matters (WP(C) No. 1644/2021, WP(C) No. 2089/2021, WP(C) No. 740/2022) where matters were remanded for deciding the special rate application. Revenue's arguments: The judgment records no specific arguments from the revenue or State regarding this issue.