The Gujarat High Court has remanded the matter back to Assistant Commissioner for determination of Excise duty refund claim with formula of input / output ratio of raw materials used in exported goods manufacturing.
The writ applicant, Messers Filatex India Ltd. is a company registered and incorporated under the Companies Act, 1956. The company is engaged in the business of manufacturing textile yarns.
It is the case of the writ applicant – company that under the old regime, the manufacturing activities of the writ applicant attracted levy of the Central Excise duty in the form of a tax on the manufacture of goods. The company was discharging its liability towards the payment of the Central Excise duty on the yarns manufactured in and cleared from the factory.
The company has been utilising various inputs and input services in the manufacture of the final products namely the textile yarns and since such inputs and input services were delivered to the company by the suppliers on the payment of the appropriate amount of Excise duty, the company was availing credit of the duties so paid on the inputs and input services under the CENVAT Credit Scheme.
The division bench of Justice J.B.Pardiwala and Justice Nisha M.Thakore has held that the impugned order passed by the Joint Commissioner, CGST and Central Excise, Vadodarais hereby quashed and set aside. The Assistant Commissioner shall now proceed further in accordance with the directions issued by the Joint Commissioner (Appeals) vide the order and adjudicate the claim of the writ applicants in accordance with Sub Rule (4B) of Rule 89 of the CGST Rules, but keeping in mind the formula of input / output ratio of the inputs / raw materials used in the manufacturing of the exported goods. In other words, keeping in mind what has been stated by the Principal Commissioner in his affidavit-in-reply filed in the present litigation, more particularly, in accordance with the averments. Let this entire exercise be undertaken at the earliest and the claim shall be determined and paid accordingly to the writ applicants within a period of eight weeks from the date of receipt of the writ of this order.
“The connected writ application being the Special Civil Application No.17703 of 2021 succeeds on the same line of reasoning. We need to clarify one thing so far as this connected writ application is concerned. In the connected writ application, the writ applicant has already furnished the necessary refund claim, but in view of the fact that the refund adjudication is to be undertaken a fresh, it should not be said that the earlier claims are now time barred. It is needless to clarify that the fresh adjudication shall be subject to the clearance of the deficiency memo,” the court said.
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