The court emphasized that delays in filing applications for excise duty refunds should be considered in light of extraordinary circumstances, such as the Covid-19 pandemic, and that entitlement to refunds should not be denied on technical grounds.

JUDGMENT :

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.

2. The short grievance projected by the petitioner is that in terms of Notification No. 56/2002-CE dated 14.11.2002, it was entitled 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 the manufacturer prior to 30th 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.

3. 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) 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.

4. 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.

5. Heard learned counsel for the parties and perused the record.

6. It is not in dispute t