The Gauhati High Court recently observed that industrial units not to be discriminated for budgetary support-based turnover.
These bunch of writ petitions have been filed by the petitioners who had setup their factories in various industrial growth centres in State of Assam in pursuance to the incentives offered under the Industrial Policy by the Government of India by Notification dated 24.12.1997.
A clarification was issued by the Government of India, Ministry of Commerce and Industry, Department for Promotion of Industry and Internal Trade ( GSTSS Section ) dated 22.02.2023 bearing F.No. 10/3/2021-GSTSS to the effect that for non-filing of refund application, on account of sufficient Cenvat Credit balance in initial period/years and non-payment of Central Excise duty in cash for claiming refund cannot be, in any manner, be interpreted to mean that the unit was either not eligible or not availing the benefit under the area based notification and thereby it was clarified that such units should be considered as eligible unit under the Budgetary Support Scheme for taking the benefit of the said scheme for the residual period.
The petitioners were eligible to receive benefits under the North East Industrial Investment Promotion Policy, 2007 ( NEIIPP ), challenged the scheme of budgetary support because of the condition that the industrial unit was not registered under the Central Excise Act, 1944 prior to introduction of the GST regime as the turnover of the industrial unit was below the threshold limit and/or the goods manufactured by the industrial unit were exempted from payment of excise duty at all.
In the present set of cases, the industrial units, though eligible for benefits under the Industrial Policy of 2007 in so far as excise benefits was concerned, the said benefit could not be claimed inasmuch as either the goods manufactured were exempted from payment of excise duty or the total turnover of these units were below the threshold limit.
The petitioners were of the view that denial of the benefit of the Budgetary Support Scheme to the Petitioners only on the ground that they were not having the Central Excise registration prior to 01.07.2017 is assailed in the present proceedings as being absolutely illegal and thereby requiring the industrial units to comply with the provisions which are not envisaged under law as per the Central Excise Act.
A Single Bench of Justice Soumitra Saikia observed that “Under such circumstances when the avowed object of the budgetary support scheme is to provide financial support to those industries who were eligible to avail benefits under the NEIIPP, the exclusion of the petitioner units on the classification that they did not pay Central Excise Duty either because their annual turnovers were below the threshold limit of 1.5 crores or that they had produced items which were already exempted is based on fiction and cannot be permitted to be a ground to deny the benefits of budgetary support scheme. Such classification cannot be held to be a reasonable classification as it fails to achieve the object for which the classification is made, namely providing financial support to those industries availing benefits under the NEIIPP.”
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