Relief to Godrej Consumer Products Ltd, Application for fixation of special rate filed after decision of SC in VVF Ltd cannot be rejected as Time-Barred: CESTAT [Read Order]

The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) in the case of  Godrej Consumer Products Ltd, has held that the application for fixation of special rate filed after the decision of the Supreme Court in VVF Ltd cannot be rejected as time-barred.

M/s. Godrej Consumer Products Limited, the Appellant is engaged in the manufacture and supply of mosquito repellents falling under Chapter 38 of the First Schedule to the Central Excise Tariff Act, 1985. The Appellant availed the benefit of Notification No. 32/1999-CE dated 08.07.1999 which granted 100% exemption on products manufactured and cleared from a unit located in the North Eastern region.

Accordingly, the Appellant was claiming a refund of 100% excise duty paid in cash with respect of final products. The exemption Notification No. 32/1999-CE was amended vide subsequent notifications, viz. Notification No. 17/2008-CE dated 27.03.2008 (Notification 20/2007-CE dated 25.04.2007 and Notification No.20/2008-CE dated 28.03.2008 (effective from 01.04.2008), wherein the quantum of refund was restricted to the limit of value additions. 

The rate of central excise duty refund in respect of goods manufactured by the Appellant was reduced to 34% of the total duty paid. The amended Notifications were however struck down by the Single Judge of the Gauhati High Court vide its order dated 24.06.2009. Thereafter, the department went for an appeal before the divisional bench of the Gauhati High Court in W.A. No. 243/2009 whereby the High Court stayed the Single Bench order of the same court vide interim order dated 11.08.2009.

The Appellant was under the impression that during the pendency of the issue before the Supreme Court, they did not have to apply for fixation of the special rate of value addition since the amending notifications had already been struck down by the High Court. However, as a measure of abundant caution, they submitted applications for such rate fixation for the FY 2009-10 on 29.09.2010 (for each of the units), since the actual value addition of the goods manufactured by the Appellant was much higher than the percentage specified in the table of the notification i.e. 34%.

The Supreme Court in the case of Union of India v. VVF Ltd. & Another upheld the validity of the amended notifications issued to curtail the benefit of the refund given under the area-based exemption notifications in North-Eastern states.

A two-member bench comprising  Shri R Muralidhar, Member(Judicial) and Shri K Anpazhakan, Member(Technical)  observed that the application for special rate fixing for the period 2009-10 to 2016-17 was initially held that they have filed the applications for fixing special rate after 30th September of the same year and is barred by limitation.  

Further held that the applications filed by the Appellant for fixation of special rates of valuation on 29.09.2010, for the FY 2009-10 for each of the units, is not time-barred.  The CESTAT set aside the impugned orders and allowed the appeals filed by the Appellant.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

M/s. Godrej Consumer Products Limited vs commissioner of Central Excise & Service Tax , 2023 TAXSCAN (CESTAT) 1619 , Shri B.L. Narasimhan , Shri J.Chattopadhyay