IN THE HIGH COURT OF JAMMU & KASHMIR AND
LADAKH AT JAMMU
WP(C) No. 2045/2023 c/w
WP(C) No.1577/2023
WP(C ) No. 2044/2023
Reserved on: 20.08.2024
Pronounced on: 31 .08.2024
WP(C) No.2045/2023
V.K.Garments through its proprietor Mr. Vinod Sachdeva SIDCO
Complex Phase II Bari Brahmana District Samba, J&K R/O 30
Ext.Karan Nagar Jammu.
Petitioner
Through: Mr. A.H.Naik Sr. Advocate with
Mr. Sachin Sharma Advocate.
Vs.
1 Union of India through Secretary Department of Revenue Ministry of
Finance North Block New Delhi 110001
2. Commissioner Central Excise/Central Goods and Service Tax
Commissionerate Jammu OB-32 Rail Head Complex Jammu
Respondents
Through Mr. Rohan Nanda CGSC
WP(C) No. 1577/2023
M/S Hallmark through its parner Mr. Vinod Sachdeva SIDCO
Complex Phase II Bari Brahmana District Samba, J&K
petitioner(s)
Through: - Mr. A.H.Naik Sr. Advocate with
Mr. Sachin Sharma Advocate.
Vs.
1 Union of India through Secretary Department of Revenue Ministry of
Finance North Block New Delhi 110001
2. Commissioner Central Excise/Central Goods and Service Tax
Commissionerate Jammu OB-32 Rail Head Complex Jammu
Respondents
Through Mr. Rohan Nanda CGSC
WP(C ) No. 2044/2023
2
Creative Garments through its parner Mr. Vinod Sachdeva SIDCO
Complex Phase II Bari Brahmana District Samba, J&K R/O 30
Ext.Karan Nagar Jammu.
Petitioner
Through: Mr. A.H.Naik Sr. Advocate with
Mr. Sachin Sharma Advocate.
Vs.
1 Union of India through Secretary Department of Revenue Ministry of
Finance North Block New Delhi 110001
2. Commissioner Central Excise/Central Goods and Service Tax
Commissionerate Jammu OB-32 Rail Head Complex Jammu
Through: Mr. Rohan Nanda CGSC
CORAM:
HON’BLE MR. JUSTICE SANJEEV KUMAR,JUDGE
HON’BLE MR. JUSTICE RAJESH SEKHRI, JUDGE
JUDGMENT
WP(C) No. 2045/2023
Sanjeev Kumar J
1 The petitioner is a proprietorship concern and was
registered with the Central Excise Department vide Registration
No. ADCPS8068DEM002 for manufacturing of readymade garments
falling under Chapter 62 of the
Central Excise Tariff Act, 1985 [‘Act of
1985’ for short. The petitioner is aggrieved and has challenged an order
dated 02.02.2023 passed by respondent No.2 [‘impugned order’]
whereby two applications dated 27.12.2022 filed by the petitioner for
fixation of special rate of actual value addition for the financial years
2011-2012 and 2012-13 have been rejected being barred by limitation.
3 The short grievance projected by the petitioner is that in
terms of Notification No. 56/2002-CE dated 14.11.2002, it was entitled
3
to 100% refund of the excise duty on the goods manufactured by it.
However, vide notification No. 19/2008-CE dated 27.03.2008, the
exemption notification issued in the year 2002 was amended and
refund of excise duty was restricted to the duty payable on value
addition undertaken in the manufacture of the goods. A table was
introduced in the original notification containing a rate of value
addition for different goods. Furthermore, in terms of clause 2.1 of the
Notification dated 27.03.2008, the manufacturer was given an option
not to avail the rates specified in the table and apply to the
Commissioner for fixation of a special rate representing the actual
value addition in respect of goods manufactured and cleared under the
Notification. The notification dated 10.06.2008 clearly provided that
such an application seeking fixation of special rates must be filed by
th
the manufacturer prior to 30 of September in a particular financial
year. The notification No. 19/2008-CE dated 27.03.2008 and
notification No. 34/2008-CE dated 10.06.2008 were subject matter of
challenge in various writ petitions filed by the aggrieved assessee
before this Court.
4 A single Bench of this Court vide its judgment rendered in
Reckitt Benckiser vs Union of India, 2011(269) ELT 194
(J&K)/2010 SCC Online J&K 283 accepted all the petitions and
quashed the aforesaid notifications. The petitioner herein also filed
OWP No. 804 of 2011 before this Court on similar grounds. Feeling
aggrieved by the judgment of Single Bench, Union of India filed
Letters Patent Appeals which were disposed by a Division Bench of
this Court vide order dated 18.09.2018 by providing that the decision of
the Supreme Court in SLP(C) No. 28194-28201 of 2010 and SLP(C )
4
No. 12392-12399 of 2010 shall govern the case of the parties in LPAs.
The issue of limiting the exemption to the value addition was ultimately
decided by the Supreme Court in favour of Revenue in case of Union
of India vs VVF ltd., (2020) 20 SCC 57. The validity of the amending
notifications issued to curtail the benefit of exemption in the North-
Eastern States was upheld. After the decision of the Supreme Court
which was rendered on 22.04.2020 deciding the issue finally, a cause
accrued to the petitioner to make an application for fixation of special
rates in terms of the notification of 2008.
5 It is the case set up by the petitioner that formal
applications for fixation of special rates could not be filed due to
outbreak of Covid-19 pandemic. The applications were, thus, filed
without any waste of time on 27.12.2022. It is, thus, the grievance of
the petitioner that its applications were dismissed despite the fact that it
had amply explained the delay and had brought to the notice of
respondent No.2 that the applications filed on 27.12.2022 were in
continuation to the applications for refund filed way back in the year
2012 and 2013 and, therefore, there was no delay in making such
applications. The respondent No.2, it is contended, brushed aside all
these aspects and in a most mechanical manner passed the impugned
order holding the applications made by the petitioner barred by
limitation.
6 Heard learned counsel for the parties and perused the
record.
7 It is not in dispute that prior to issuance of notification
dated 27.03.2008, the area-based exemptions of excise duty in favour
5
of industrial units established in North-Eastern States including State of
Jammu and Kashmir were governed by Notification No. 56/2002-CE
dated 14.11.2002. As per the said notification, the petitioner-unit was
entitled to 100% refund of the excise duty paid on manufacturing and
clearing of its excisable goods. It is equally true that, in terms of excise
notification No. 19/2008 dated 27.3.2008 read with Notification
No. 34/2008-CE dated 10.06.2008 the exemptions were curtailed and
restricted only to the extent of value addition. This notification was
immediately challenged before this Court and, therefore, remained
eclipsed till the matter was finally decided by the Supreme Court on
22.04.2020 in case (supra). Rightly, as is
Reckitt Benckiser’s
contended by the petitioner, it could not have applied for fixation of
special rates as provided under the Excise Notification of 2008 which
was subject matter of challenge in various writ petitions and had been
stayed by a Single Bench of this Court. It, therefore, made applications
for refund under the excise notification of 2002, the details whereof are
given in para (3) of the impugned order. It is also not disputed before
this Court that at the time when the Supreme Court settled the matter
with regard to exemptions in case (supra), covid-19
VVF Ltd’s
pandemic had engulfed the entire country.
8 Taking note of the situation created by continuous
lockdown in the country in view of covid-19 pandemic, the Supreme
Court directed all the authorities to exclude the period between
15.03.2020 to 28.02.2020 from computation of limitation. Viewed thus,
the petitioner could not have applied for fixation of special rates which
right had accrued to it only after the judgment of the Supreme Court
rendered in VVF Ltd. case (supra) on 22.04.2020. As is clearly
6
provided in paragraph 2.1 of exemption notification of 2008 read with
notification No. 34 of 2008, a manufacturer was given an option not to
avail the rates specified in the table of the notification and apply to the
Commissioner of Central Excise or Commissioner of Customs and
Central Excise as the case may be, for fixation of a special rate
representing the actual value addition in respect of any goods
manufactured and cleared under the notification subject to certain
conditions prescribed in the notification. This option was to be made by
the manufacturer by making an application in writing to the
th
Commissioner concerned by or before 30 of September in the relevant
financial year. The relevant financial years in the instant case are
2011-12 and 2012-13. It would mean that had there been no litigation
and stay of the exemption notification of 2008, the applications for
fixation of a special rate for the financial year 2011-12 could have been
th th
filed by 30 September, 2011 and by 30 September 2012 respectively.
This, however, could not be done for the reasons explained above i.e
pendency of litigation and stay of excise notifications No. 19/2008 and
34/2008 by this Court which ended with the Supreme Court deciding
the issue finally on 22.04.2020 followed by Covid-19 pandemic. Going
by the stipulation contained in the Excise notification No. 19 of 2008
read with notification No. 34 of 2008, the petitioner could have filed
such application by 30.09.2022. The Commissioner concerned had the
discretion to condone the delay for a further period of 30 days. It would
mean that the Commissioners could have, for the reasons explained,
condoned the delay and entertained the application if filed by
30.11.2022. The petitioner, however, filed applications seeking fixation
of special rates on 27.12.2022. Obviously, the application was delayed
7
by 27 days. It is true that the Commissioner could not have condoned
the delay of these 27 days for the reason that the notification would
give him only power to condone the delay up to a period of 30 days. On
this score, the Commissioner could have been justified to dismiss the
application. The Commissioner has not gone into that aspect of the
matter and has even brushed aside the contention of the petitioner that
it was entitled to exclude the period between 15.03.2020 to 28.02.2022
and has held the applications filed by the petitioner barred by inordinate
delay and laches. Respondent No.2 has found the applications delayed
by two years and eight months reckoned from the date of decision of
the Supreme Court in the case of VVF Ltd s case (supra).
.’
9 So far as the conclusion drawn by the Commissioner that
the applications were delayed by two years and eight months is
concerned, the same is factually incorrect. The Commissioner has not
taken note of the fact that the period between 15.03.2020 to 28.02.2022
was required to be excluded in terms of the directions issued by the
Supreme Court in reference to Covid-19 pandemic.
10 Viewed from afore-stated position, it is clearly deducible
that the petitioner was indeed late for filing applications seeking
fixation of special rates and this delay was only to the extent of 27 days
only. Ordinarily, when a statute or a notification creating rights and
liabilities prescribes a particular period, same is required to be adhered
to in letter and spirit. This Court, in the exercise of writ jurisdiction
under Article 226 of the Constitution of India would normally honour
such prescription of time and would not readily condone the delay as
doing so would be acting contrary to what is prescribed in a particular
8
statute or notification. While considering this aspect, we need to make a
distinction between the limitation prescribed by a statute and the period
prescribed in a non-statutory order. While, in case of limitation
prescribed by a statute, the time prescribed in the statute, including for
condonation of delay up to a particular period is required to be
respected unless an extraordinary and an exception case is made out for
exercise of writ jurisdiction to direct an authority to entertain an
application even beyond time. That apart, having regard to the object of
granting the area-based exemptions to the industrial units located in
specified areas and also having regard to the fact that the entitlement of
the petitioner to refund as per the excise notification of 19 of 2008 read
with notification No. 34 of 2008 is not disputed, a liberal approach in
the matter of condonation of delay is called for.
11 There is yet another aspect of the matter which cannot be
lost sight of and it is that the petitioner had filed applications for refund
of the excise duty paid during the financial years 2011-12 and 2012-13
in the year 2012 and 2023 itself. These applications were, of course, in
respect of claim for refund in terms of excise notification of 2002, for,
the amending notifications i.e 19 of 2008 and 34 of 2008 were stayed
by this Court in a number of writ petitions and could not have been
given effect to. It was only after the decision of the Supreme Court in
VVF Ltd’s case (supra) rendered on 22.04.2020, the issue came to be
settled and the validity of subsequent notifications issued in the year
2008 upheld.
12 Ordinarily, the petitioner, with a view to taking benefit of
exemptions under the amending notifications of 2008, should have
9
made applications seeking fixation of special rates as was provided in
the amending notifications immediately after the judgment of Supreme
Court in case (supra). For two years, it could not do so
VVF Ltd’s
because of pandemic and up to September 2022, he was entitled to
apply for as provided under the notifications itself. There is also a
provision for condonation of delay in the notifications for a period of
one month. As held above, and is reiterated here that the applications
filed by the petitioner were delayed by 27 days only. The applications
dated 27.12.2022 filed by the petitioner in the given circumstances can
be said to be the applications filed in continuation with the applications
for refund filed in the year 2012 and 2013. The refund applications
were already with respondent No.2 and the two applications which
were filed on 27.12.2022 were only for seeking a different mode of
computing/determining the excise duty refund payable to the petitioner.
Viewed thus, it cannot be said that the applications filed by the
petitioner were beyond time.
13 We have also taken note of the fact that it is not the case of
the respondents that the petitioner is not entitled to any refund, but it is
being shown the door only on the ground that the applications are
belated. Once the respondents do not dispute the eligibility of the
petitioner to claim refund of excise duty in terms of amending
notifications of 2008, it would be travesty of justice if the claim of the
petitioner is thrown out on the technical ground of delay. We, therefore,
find it a fit case for exercise of extraordinary writ jurisdiction under
Article 226 of the Constitution and direct the respondent No.2 to treat
the applications filed by the petitioner in time and decide the same on
merits. There is another reason for issuance of such direction. A
10
Division Bench of this Court in WP(C)s No. 1844 of 2021 and
2520/2022 has already passed similar orders, though the same were
passed on the concession of learned counsel appearing for the Revenue
that they will consider and decide the applications on merits. On being
specifically asked by the Court, learned counsel appearing for the
respondents submits that the aforesaid orders have not been further
challenged and have been complied with by them. Mr. Rohan Nanda
learned counsel appearing for the respondents placed reliance upon a
later Division Bench judgment of this Court rendered in WP(C)
No. 1739/2023 wherein the Court has, under somewhat similar
circumstances, relegated the petitioner therein to the alternative remedy
of appeal provided under the Act. Mr. Nanda has also relied upon a
judgment of Supreme Court in the case of State of Maharashtra and
others vs. Greatship (India) Limited (Civil Appeal No. 4956 of 2022,
decided on 20.09.2022) to hammer his point that in the face of
availability of equal efficacious alternative statutory remedy, the writ
petition before this Court is not maintainable.
14 We have given thoughtful consideration to the aforesaid
submissions of learned counsel for the respondents and we regret our
inability to agree with him. The Judgment in Greatship (India) Ltd
(supra) does not deal with the issue in the manner we have dealt with in
this case. Had respondent No.2 decided the matter on merits or had
there been a dispute of fact with regard to the computation of
limitation, we would have definitely relegated the petitioner to the
alternative remedy provided under the Statute. In the instant case, the
Commissioner has failed to take note of a clear directive of the
Supreme Court to exclude the period of limitation between 15.03.2020
11
to 28.02.2022 while computing the limitation provided for filing of any
appeal or application before any Court or authority under the statute.
The Commissioner also failed to take note of the fact that the petitioner
had filed refund appellations in the year 2011 and 2012 itself and made
the applications on 27.12.2022 only seeking determination of refund of
excise duty in terms of excise notifications of 2008 which were upheld
by the Supreme Court in case (supra) on 22.04.2020 only.
VVF Ltd.’s
As a result of this total non-application of mind on the part of the
Commissioner, there was a serious miscarriage of justice. That apart,
this Court had already decided two petitions on the similar grounds
and, therefore, we are of the considered view that relegating the
petitioner to alternative remedy would be subjecting the petitioner to
uncalled for discrimination. The petitioner needs to be treated at par
with the petitioners of WP (C)s No. 1844/2021 and 2520/2022 (supra).
15 In the premises, this petition is allowed. The impugned
order dated 02.02.2023 passed by respondent No.2 is quashed.
Respondent No. 2 is directed to treat the applications dated 27.12.2022
filed by the petitioner in time and pass fresh orders on merits. We
make it clear that we have not given our opinion on merits of the claim
of the petitioner.
WP(C) No.1577/2023 & WP(C ) No. 2044/2023
The judgment passed in WP(C) No. 2045/2023 hereinabove shall
also govern the disposal of WP(C) No. 1577/2023 and WP(C)
2044/2023. Accordingly, the impugned orders passed by respondent
No.2 are quashed. Respondent No. 2 is directed to treat the applications
12
dated 27.12.2022 filed by the petitioners in the aforementioned
petitions in time and pass fresh orders on merits.
(RAJESH SEKHRI) (SANJEEV KUMAR)
JUDGE JUDGE
Srinagar
31. .08.2024
Sanjeev
Whether the order is reportable: Yes