Custom, Excise & Service Tax Tribunal
Commissioner C Ex- Dibrugarh vs M/S. Daisajan Tea Estate on 25 February, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO. 1
Excise Appeal No. 175 of 2010
(Arising out of Order-in-Appeal No. 33/DB/CE(A)/GHY/09 dated 27.11.2009 passed
by the Commissioner of Customs and Central Excise (Appeals), Custom House,
Nilamoni Phukan Path, Christian Basti, Guwahati - 781 005)
Commissioner of Central Excise and Service Tax : Appellant
Dibrugarh Commissionerate
Milan Nagar "F" Lane, P.O.: C.R. Building, Dibrugarh (Assam),
PIN - 786 003
VERSUS
M/s. Daisajan Tea Estate : Respondent
P.O.:Talap, District: Tinsukia (Assam)
PIN - 786 156
AND
Excise Appeal No. 70039 of 2013
(Arising out of Order-in-Appeal No. 40/DIB/CE(A)/GHY/12 dated 27.11.2012 passed
by the Commissioner of Customs and Central Excise (Appeals), Custom House,
Nilamoni Phukan Path, Christian Basti, Guwahati - 781 005)
Commissioner of Central Excise and Service Tax : Appellant
Dibrugarh Commissionerate
Milan Nagar "F" Lane, P.O.: C.R. Building, Dibrugarh (Assam),
PIN - 786 003
VERSUS
M/s. Daisajan Tea Estate : Respondent
P.O.:Talap, District: Tinsukia (Assam)
PIN - 786 156
APPEARANCE:
Shri Mihir Ranjan, Special Counsel
For the Appellant-Revenue
Shri Pradip Kumar Tarafder, Senior Advocate,
Shri Sambuddha Dutta, Advocate
for the Respondent
CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NOs. 75500-75501 / 2025
DATE OF HEARING: 28.01.2025
DATE OF DECISION: 25.02.2025
Page 2 of 30
Appeal No(s).: E/175/2010 & E/70039/2013-DB
ORDER:[PER SHRI K. ANPAZHAKAN] There are two appeals filed by the Revenue. Both the appeals are on the same issue and hence, they are taken up together for disposal by a common order.
2. Brief facts of the case are that M/s. Daisajan Tea Estate, Tinsukia, Assam (hereinafter referred to as the "respondent"), having Registration No. AABCR4231NXM008 manufactures "Tea" classifiable under Chapter 9 of Schedule I to the Central Excise Tariff Act 1985. The management of the respondent changed in June/July 2005. Before taking over, the old management has not claimed the benefit of exemption Notification No. 33/99-C.E. dated 08.07.1999. The new management for the first time submitted an application dated 25.06.2005 praying for exemption under Notification No. 33/99-C.E. dated 08.07.1999 on the ground that they had substantially expanded their factory after 24.12.1997 as they increased the post-expansion installed capacity by more than 25%. The respondent completed the expansion of their factory on 19.03.1998. Further, on 02.09.2005, the respondent vide letter no GM/01/241/2005 dated 30.08.2005 submitted their refund claim regarding Notification No. 33/99-C.E. dated 08.07.1999 from July 1999 to March 2003 (time period when old management was under control). Thus, after seven years of expansion, the present appellant applied for a refund claim under Notification No. 33/99-C.E. dated 08.09.1999.
2.1. The Ld. Special Counsel representing the Revenue has submitted a list of dates and events leading to the present appeals, which is reproduced below: -
Page 3 of 30Appeal No(s).: E/175/2010 & E/70039/2013-DB Sl. No. Date Particular 1 25.06.2005 The respondent filed an application praying for exemption under para 2(a) read with Para 3(b) of Notification No. 33/99-CE dated 08.07.1999 on the ground that they had substantially expanded their installed capacity in the factory after 24.12.1997.
2 02.09.2005 The respondent vide letter no
GM/01/241/2005 dated
30.08.2005 submitted their refund claim regarding notification no 33/99- CE dated 08.07.1999 from July 1999 to March 2003.
3 28.09.2005 The Department issued a Show Cause Notice to reject their claim for exemption because it had expanded only the withering trough and fermenting section per the Chartered Engineer Certificate. Also, they have filed the refund application beyond the stipulated dates of para 2 (a) of the notification.
4 21.10.2005 The respondent, interalia, contended that the above could not apply since they had taken over the Company in June/July 2005. They were unaware of why earlier management did not claim the notification's benefit even though the factory's installed capacity had increased by 25% (since 24.12.1997 and before July 1999). After taking over the company, they approached the Chartered Engineer to prepare machinery layout plans and issue stability certificates, who, after visiting the factory, informed them that the said factory could be eligible for the exemption benefit.
Page 4 of 30Appeal No(s).: E/175/2010 & E/70039/2013-DB Commissioner (Appeals) and CESTAT have accepted delays in many cases and extended benefits based on monthly RT-12 returns.
Exemption under Notification No. 33/99-C.E. dated 08.09.1999 is an independent notification, and the provision of Section 11B of the Central Excise Act 1944 does not apply to refunds under this notification.
Notification No. 33/99-C.E. dated 08.09.1999, did not provide a time limit for filing a refund claim. The Commissioner (Appeals) and Hon'ble CESTAT have accepted the filing of RT-12 returns within the 7th day of the following month as a valid claim.
If the substantive condition of the notification is fulfilled for procedural infraction, the benefit of the exemption notification cannot be denied.
5 25.11.2006 The respondent-party submitted documents regarding Shillong Commissionerate's Trade Notice No 116/2000 dated 11.08.2000 regarding Notification No. 33/1999.
6 08.01.2007 The assessee submitted two letters viz. (a) a letter dated 12.09.1998 regarding a proposal for the construction of a new withering Trough House and (b) a letter dated 20.03.1999 informing completion of construction.
Page 5 of 30Appeal No(s).: E/175/2010 & E/70039/2013-DB 7 16.07.2007 The Range Superintendent submitted his verification report claiming that the party had not submitted complete documents supporting the expansion work. He can't verify the expansion work after seven years.
8 09.08.2007 The Adjudicating Authority rejected their claim in Order-in-Original No. DIV/DIG/CE/REF/01/ACD/2007, dated 09.08.2007 because they did not submit the proper documents that the range Superintendent had sought.
9 18.01.2008 Aggrieved, the respondent filed an
appeal before the
Commissioner(Appeals), Customs & Central Excise, Guwahati, who, vide Order-in-Appeal No.06/DB/CE(A)/GHY/08 dated 18.01.2008, set aside the impugned order and remanded the case to the adjudicating authority for re-determination per law because the Assistant Commissioner rejected the claim based on the range superintendent's report without recording his findings. Adjudicating Authority also did not record his finding regarding filing the refund application after the stipulated date as per para 2(a) of Notification No 33/99-CE dated 08.07.1999.
10 29.10.2008 The adjudicating authority issued an order (No. 10/EXEM-33/99- CE/ACD/2008) on 29.10.2008, granting the benefit of exemption under Notification No. 33/99-CE dated 08.07.1999, as amended as the party had fulfilled the condition of substantial expansion in terms of the said notification. While deciding, he considered physical verification by the Assistant Page 6 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB Commissioner and Superintendent on 17.06.2008 11 12.12.2008 The Commissioner of Central Excise, Dibrugarh, reviewed the order dated 29.10.2008 and ordered for filing an appeal on the ground that (i) Though the party reportedly completed the expansion of their factory on 19.03.1998, they submitted their application seeking the benefit of exemption under the said Notification on 16.06.2005 after a gap of more than seven years and the adjudicating authority vide his order dated 29.10.2008 allowed their eligibility retrospectively w.e.f. 22.03.1998. Given the decision of the Hon'ble Supreme Court in CCE, Jaipur vs Raghuvar (India) Ltd. [2000(118) E.L.T. 311 (S.C.)] and Commissioner of Trade Tax vs Kanhai Ram Thekedar [2005(185) E.L.T. 3(S.C.)], the adjudicating authority was duty bound to reject the application for exemption on the ground that the respondent had applied beyond a reasonable period of its eligibility. Moreover, in 5 similar cases, the Commissioner (Appeals) had allowed the departmental Appeals.
12 29.12.2008 The Assistant Commissioner, Central Excise Digboi, filed an appeal before the Commissioner (Appeals), Customs & Central Excise in Guwahati.
13 27.11.2009 The Commissioner (Appeals), Customs & Central Excise in Guwahati vide Order-in-Appeal No. 33/DB/CE(A)/GHY/09 dated 27.11.2009, rejected the Departmental appeal and upheld the impugned order. The decision was based on the respondent submitting a letter dated Page 7 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB 23.04.2001 during the personal hearing before the Commissioner (Appeals), indicating their substantial production capacity expansion. The Commissioner (Appeals) found that the Department failed to verify the party's claim submitted in 2001 and could not reject it later.
14 27.11.2009 The Committee of Commissioners reviewed the order dated 27.11.2009 by the Commissioner (Appeals), Customs & Central Excise, Guwahati, and found it improper and illegal. They instructed the Assistant Commissioner of Central Excise, Digboi, to appeal before the Hon'ble CESTAT. The Department filed the Appeal as
(i) The Commissioner (Appeals) committed an error in considering a letter dated 23.04.2001 submitted by the party to the Assistant Commissioner, Central Excise, Digboi, which the party had never claimed to have submitted in the earlier proceedings.
(ii) The Commissioner (Appeals) failed to appreciate that the party's declaration filed to the Assistant Commissioner, Central Excise, Digboi vide letter 23.04.2001 is additional evidence produced by the party at the appellate stage without any mention of it in the entire proceeding before the three authorities in the present forum.
(iii) The Commissioner (Appeals) had failed to appreciate that it was on record that the party had Page 8 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB contended before the original adjudicating authority in the course of proceedings that the delay in claiming the refund was attributable to the fact that they had taken over the factory only in 2005(June/July) and taking over, the Chartered Engineer in the course of drawing machinery layout of the unit had pointed out that the factory might be eligible for exemption under the said notification and subsequently they had claimed the exemption.
Against this backdrop, Commissioner (Appeals) admission of the additional evidence that the party had filed a claim on 23.04.2021 is factually and legally incorrect.
(iv) After the Commissioner (Appeals) passed the order, the Assistant Commissioner, Central Excise, Digboi, confirmed that neither the Divisional Office nor the Range Office had received the letter dated 23.04.2001. Thus, the Commissioner (Appeals) had erred both in law and in the fact that the party had filed a claim for exemption on 23.04.2001.
(v)The Commissioner(Appeals) erred in upholding the order of the Assistant Commissioner, allowing the benefit of exemption under Notification No. 33/99-CE dated 08.07.1999, after a lapse of seven years without complete documents.
15 12.03.2010 Accordingly, the Assistant Commissioner, Central Excise, Digboi, filed an Appeal No. E/175/2010 before the CESTAT at Page 9 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB Kolkata, on 12.03.2010, along with a stay petition.
16 -- The adjudicating authority sanctioned a refund of Rs.
61,93,365/because of the Board's Circular No. 572/9/2001-CX.dated 22.02.2001.
17 -- Being aggrieved with the impugned order dated 13.04.2010, the Commissioner, Central Excise & Service Tax, Dibrugarh, filed an appeal before the Commissioner (Appeals), Customs & Central Excise, Guwahati, on the following grounds:
(i) The Assistant Commissioner had erred in sanctioning the refund of Central Excise duty to the tune of Rs.61,93,365.00 to M/s Daisajan Tea Estate without appreciating the contention and submission made by the Department in appeal before the Hon'ble CESTAT, Kolkata against Order-in-Appeal No.33/DB/CE(A)/GHY/09 dated 27.11.2009. The Department also filed a stay application on 12.03.2010. But without waiting for the grant of stay to be accorded by the Hon'ble CESTAT, he sanctioned the said refund amount to the party, which is not tenable and correct in the eye of the law.
(ii)The letter dated 23.04.2001, purportedly submitted by the party to the Assistant Commissioner, Central Excise, Digboi, is additional evidence that the party never claimed to have filed any such declaration in the entire course of a proceeding before the original adjudicating authority before the present forum.
Page 10 of 30Appeal No(s).: E/175/2010 & E/70039/2013-DB
(iii)In several cases, the Tribunal had held additional evidence at the appellate stage as not admissible.
(iv) The party had contended in the course of proceedings in the "order in original" dated 09.08.2007 that the delay in claiming the refund was attributable to the fact that they had taken over the factory only in 2005(June/July), and after taking over, the Chartered Engineer in the course of drawing machinery layout of the unit had pointed out that the factory may be eligible for exemption under Notification No. 33/99-CE dated 08.07.1999 and subsequently they had claimed the exemption.
Against this backdrop, Commissioner (Appeals) admission of the additional evidence that the party had filed the claim on 23.04.2001 is factually and legally incorrect.
18 27.11.2012 The Commissioner (Appeals) vide Order-in-Appeal No.40/DIB/CE(A)/GHY/12 dated 27.11.2012 dismissed the Department's Appeal as infructuous.
19 25.02.2013 On scrutinising the above Order-in-
Appeal dated 27.11.2012 passed by the Commissioner (Appeals), it appeared that the ground cited by the Commissioner (Appeals) needed to be corrected.
Accordingly, the Department filed an appeal no E/70039/2013 before the CESTAT at Kolkata against Order-in-Appeal No. 40/DIB/CE(A)/GHY/12 dated 27.11.2012.
Page 11 of 30Appeal No(s).: E/175/2010 & E/70039/2013-DB
3. From the above, it may be seen that after a series of applications/representations, the adjudicating authority has sanctioned a refund of Rs. 61,93,365/- vide order dated 13.04.2010. Aggrieved against the sanction of the refund, Revenue filed appeal before the Ld. Commissioner (Appeals), who vide the impugned order rejected the department's appeal and upheld the sanction of the refund. The present appeals have been filed by the Revenue against the upholding of sanction of the refunds. 3.1. In respect of Excise Appeal No. 175 of 2010, the Ld. Special Counsel appearing on behalf of the Revenue has raised the following grounds: -
(A) Both the Adjudicating and the Appellate Authority had committed a mistake in allowing the application of filing eligibility of exemption Notification No. 33/1999-C.E.on the basis that the same was filed after delay of a reasonable period as given the Supreme Court's decision in
(i) CCE, Jaipur vs Raghuvar (India) Ltd.
[2000(118) E.L.T. 311 (S.C.)] and (ii) Commissioner of Trade Tax vs Kanhai Ram Thekedar [2005 (185) E.L.T. 3 (S.C.)], (B) The Department is also aggrieved as the Ld. Commissioner (Appeals) has admitted additional evidence at the Appellate stage, which the respondent never produced before the Original Authority in the earlier proceedings. Also, the Assistant Commissioner of Central Excise, Digboi Division, has confirmed that neither the Division nor its range office received any such letter dated 23.04.2001 (Additional Evidence produced during the hearing). Hence, the Ld. Commissioner (Appeals) has committed an error in accepting non-existent additional evidence at the appellate stage. The Appellant Page 12 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB referred to Rule 5 of the Central Excise Rules, 2001 regarding the production of additional evidence before the Commissioner (Appeals), which prohibits the production of additional evidence other than the evidence he produced during the proceedings before the Adjudicating Authority. The subject evidence in the present case does not fall in the four exceptions mentioned in Rule 5. It is settled law that admission of Additional evidence at the appellate stage is only an exception to be exercised sparingly and judicially. The Appellant submits the following cases in support of their contention:
• Sheth Impex Vs Commissioner of Customs Chennai [2009 (240) E.L.T. 623 (Tri.-
Chennai)]
• Daga Fibres & Synthetics Ltd Vs
Commissioner of Customs, Mumbai
[2002(142) E.L.T. 622 (Tri.-Mumbai)] • United Machinery Works (P) Ltd Vs Collector of Central Excise, Coimbatore [1995(79) E.L.T. 477 (Tribunal)] • Prakash Pipes & Industries Ltd Vs Collector of Customs [1993 (68) E.L.T. 799 (Tribunal)] • Unique Beauty Care Products (P) Ltd Vs CCE [1988 (37) E.L.T. 360 (Tribunal)] 3.2. In respect of Excise Appeal No. 70039 of 2013, the Revenue has urged the ground that the refund sanctioning authority did not wait for the decision in the stay application filed before the CESTAT Appeal no. E/175/2010 before sanctioning the refund and also, while deciding the case, he ignored the Department's valid legal grounds of appeal urged before the CESTAT.Page 13 of 30
Appeal No(s).: E/175/2010 & E/70039/2013-DB 3.2. The Revenue reiterates the grounds of appeals in respect of both the appeals.
3.3. The following points were also raised by the Revenue:
(i) Letter dated 23.04.2001 is an afterthought; The Ld. Commissioner (Appeals) failed to appreciate that the Party/respondent on record that while explaining the delay in submission of the Application it had claimed before the Adjudicating Authority that they had taken over the factory in 2005 (June/July) and after taking over, their Chartered Engineer pointed out that factory might be eligible for exemption under Notification No. 33/99-C.E. and after that, they had claimed the exemption. Hence, submitting a letter dated 23.04.2001 is an afterthought only. The Ld. Commissioner (Appeals) not only wrongly admitted this additional document at the appellate stage but decided the case on this basis.
(ii) Applications filed after seven years is liable to be rejected because of several judgments of the Supreme Court and other courts/ Tribunal. The party applied for the first time after a lapse of seven years of its eligibility of Notification No. 33/99-C.E., which is not a reasonable period. He cited the following case-law in support: -
• San International & anr. v. Commissioner of Customs (Import), Mumbai [Final Order No. A/85539-85540/2024 dated 03.06.2024 in Customs Appeal No. 141 of 2008 (CESTAT, Mumbai)] • Lukwah Tea Estate v. Commissioner of C.Ex, Dibrugarh [2020-TIOL-204-CESTAT-KOL] (affirmed by the Hon'ble High Court in 2022 (9) TMI 486 - Gauhati High Court) Page 14 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB 3.4. In the light of the above submissions, it is prayed by the Revenue that their appeals be allowed.
4. The Ld. Counsel appearing on behalf of the respondent viz. M/s. Daisajan Tea Estate, Assam have made the following submissions: -
(i) On 17.06.2008, the Assistant Commissioner, Central Excise, Digboi, being the Adjudicating Authority along with the other officers, visited the factory of the respondent and conducted on-
site physical verification of section-wise plant and machinery that already existed and newly installed for substantial expansion on or after 24.12.1997 and inter alia found that the percentage of increase in installed capacity by way of substantial expansion during the post- expansion period was made, i.e., (i) withering troughs 25.39% and (ii) fermenting floor = 88.88%.
(ii) The said The Assistant Commissioner, Central Excise, Digboi, being the Adjudicating Authority passed an order on 29.10.2008 inter alia recording the aforesaid facts and circumstances of the case. The said adjudicating authority found that the respondent started expansion work w.e.f. 07.01.1998 and completed the same on 19.03.1998 and commenced commercial production with the increased installed capacity w.e.f. 22.03.1998. In view of the aforesaid findings, the said adjudicating authority held that the respondent is eligible for the benefit of exemption in terms of para 3(b) of the said notification.
Page 15 of 30Appeal No(s).: E/175/2010 & E/70039/2013-DB
(iii) On 12.12.2008, the Commissioner of Central Excise, Dibrugarh, reviewed the aforesaid order dated 29.10.2008 and ordered for filing an appeal. Pursuant to such order, the Assistant Commissioner, Central Excise, Digboi, filed an appeal before the Commissioner (Appeals), Customs and Central Excise in Guwahati on 29.12.2008.
(iv) During hearing of the appeal, the consultant of the respondent handed over a copy of a letter dated 23.04.2001 addressed to the Assistant Commissioner, Central Excise, Digboi, duly acknowledged by the Department. The said Commissioner (Appeals), Customs and Central Excise, Guwahati, upon perusal of the said letter dated 23.04.2001 and upon hearing the submissions made on behalf of the respondent rejected the Departmental Appeal by an Order dated 27.11.2009 and upheld the impugned order dated 29.10.2008 passed by the Assistant Commissioner, Central Excise, Digboi. In the said order, the said Commissioner (Appeals), Customs and Central Excise, Guwahati inter alia held that from the plain reading of the said notification, it is evident that the manufacturer had to prove their eligibility of the said exemption notification by proving that their unit had undergone substantial expansion and simultaneously filed every months' statement of the duty paid. If these two conditions were fulfilled, the manufacturer was entitled to the benefits of the said notification and it was not necessary to file a formal refund claim. In the said order, the Commissioner (Appeals), Customs and Central Excise, Page 16 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB Guwahati observed that by letter dated 23.04.2001, the respondent had stated that they completed expansion of withering troughs and fermenting floor to the increase the manufacturing capacity resulting in increase of the production capacity of the factory. Machinery layout plan and stability certificate issued by Chief-Inspector of Factories had also been forwarded and the respondent had also stated in the said letter that they wanted to avail Excise Exemption benefit and that they had been filing statement of the duty paid by way of RT-12/ER-1 every month and declaration filed on 10.09.2002 under Rule 57T(1) and 57T(2) also gave details of machinery for increasing production capacity. The said Commissioner (Appeals) held that the Department was duty bound to verify the claim of the respondent in terms of letter dated 23.04.2001 and having failed to verify the respondent's claim in 2001, the Department cannot reject the said claim at a later date on the ground that the claim had been filed without taking into account the respondent's claim vide letter dated 23.04.2001 4.1. In respect of the primary contentions raised by the Revenue in Excise Appeal No. 175 of 2010, as reproduced at paragraph 3 of this Order, the respondent have made the following submissions: -
(i) The Notification No. 33/99-CE. dated 08.07.1999 was issued granting all exemption Contained therein to new industrial units which commenced commercial production on or after 24.12.1997 and industrial units existing before Page 17 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB 24.12.1997 but had undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after 24.12.1997.
(ii) The relevant clause 2 of the said notification inter alia provides that the exemption contained in the said notification shall be given effect to in the following manner, namely (a) the manufacturer shall submit a statement of duty paid from the said account current to the Assistant Commissioner or the Deputy Commissioner of Central Excise as the case may be, by the seventh of the next month in which the duty has been paid from the account current; (b) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification, as may be deemed necessary, shall refund the amount of duty paid from the account current during the month under consideration to the manufacturer by the 15th of the next month; (c) If there is likely to be any delay in the verification, the Assistant Commissioner or the Deputy Commissioner of Central Excise, as the case maybe shall refund the amount on provisional basis by the 15th of the next month to the month under consideration and thereafter may adjust the amount of refund by such amount as may be necessary in the subsequent refunds admissible to the manufacturer.
(iii) Clause 3 of the said notification inter alia provides for the exemption contained therein shall apply only to the following kinds of units namely, (a) new industrial units existing before Page 18 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB the 24th December 1997 but which had undertaken substantial expansion by way of increase in installed capacity by not less the 25% on or after the 24.12.1997.
(iv) From a joint reading of Clauses 2 and 3 of the said notification it would be apparent that the exemption contained therein is applicable to the units existing before 24.12.1997 but which had undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after 24.12.1997. For giving effect to the exemption contained therein the manufacturer shall submit a statement of the duty paid from the account current to the Assistant Commissioner or the Deputy Commissioner of Central Excise by the 7th of the next month in which the duty has been paid and the Assistant Commissioner or the Deputy Commissioner of Central Excise after necessary verification shall refund the amount of duty paid by the 15th of the next month.
(v)In the instant case, the concerned Assistant Commissioner of Central Excise, Digboi in the adjudication order dated 29.10.2008 has held that the installed capacity of tea made per annum by way of substantial expansion has been increased during post expansion period as 88.69% in fermenting section and 85.10% in overall increase and the respondent is eligible for the benefit of expansion in terms of para 3
(b) of the said Notification dated 08.07.1999 as amended. It has been further held that the post expansion was started from 07.01.1998 and completed on 19.03.1998 and commenced Page 19 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB commercial production with the increased installed capacity with effect from 22.03.1998.
(vi) The Tribunals in a number of cases, namely, (1) Commissioner of Central Excise vs Vinay Cement Limited, reported in 2002 (147) E.L.T. 724; (2) Commissioner of Central Excise vs Napuk Tea Estate reported in 2007 (219) E.L.T. 178 and (3) Dhanseri Tea Estate vs. Commissioner of Central Excise, reported in 2011 3 (274) E.L.T. 590 have held that statements of duty paid submitted in RT-12 returns amount to full compliance of Clause 2(a) of the said notification and refund of duty paid cannot be denied for want of separate claim for refund of duty paid.
(vii) In an identical case of disposing multiple Central Excise appeals including C.Ex.App. 8/2016 (MK Jokai Agri Plantations Limited & Anr. vs. Commissioner of Central Excise, Dibrugarh) the Division Bench of the Hon'ble Guwahati High Court has held that an incumbent having been once found to be eligible for exemption and refund of duty paid, denial of benefit of exemptions and refund on the ground of delay, would cause grave injustice which cannot be permitted. It has been further held that it is well settled Law that non-following of procedural requirement cannot deny the substantive benefit otherwise available to the Assessee. The said Hon'ble High Court also reiterated the views taken by the aforesaid various Tribunals and held that statement of duty paid submitted in RT-12 returns by the appellants was substantial compliance of Clause 2(a) of the notification and there was even no Page 20 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB need for it to submit a separate statement of duty paid (which was in any event submitted in the present case, putting it at an even better footing that those under consideration by the Hon'ble Guwahati High Court). Since the Department never challenged the correctness of the aforesaid judgement of the Hon'ble Guwahati High Court and instead acted thereupon and granted the benefit of exemption to the other three tea estates of the respondents namely, (1) M/s. Hattiali Tea Estate (2) M/s. Muttuck Tea Estate and (3) M/s. Bokel Tea Estate. The Department must therefore be bound by the principle laid down therein in respect of the present tea estate of the respondent herein. The Hon'ble Supreme Court in the case of Commissioner of Income Tax vs. Narendra Joshi, reported in (2004) 2 SCC 801 has held that the principle laid down in earlier decisions of High Court having remained unchallenged by the Department, they must therefore be bound by the principle laid down therein. Hence, in case of the other tea estate being the present M/s. Daisajan Tea Estate may also be granted the similar benefit as granted in respect of other tea estates.
(viii) The submissions of the appellant that since there was no prescribed timeline mentioned in the said notification for claiming the benefit, the delay in filing the claim should be within the reasonable period of time and cited two judgements of the Apex Court in support of their contentions being 2000 (118) E.L.T. 311 (S.C.) and 2005 (185) E.L.T. 3 (S.C.).
Page 21 of 30Appeal No(s).: E/175/2010 & E/70039/2013-DB
(ix) The appellate authority being the Commissioner (Appeal) correctly held that in terms of the said notification a manufacturer has to prove its eligibility to get exemption contained in the said notification, by proving that their unit has undergone substantial expansion by way of increase in installed capacity by not less than 25% on or after 24th December 1997 and simultaneously file every month statement of the duty paid. If these two conditions are fulfilled, in that event, the manufacturer is entitled to the benefit of the said notification dated 08.07.1999. It is not necessary to file a formal refund claim. The said appellate authority further held that the respondent have been filing statement of the duty paid RT-12/ER-1 every month and declaration filed on 10.09.2002 under Rule 577(1), Rule 57T(2) of the Central Excise Rules, 1944 also giving details of machinery for increase in capacity and also observed in his order that the Assistant Commissioner (Central Excise) in the adjudicating order held that after the necessary verification it was found that the installed capacity of tea made per annum by way of substantial expansion has increased during post expansion period as 88.69% in fermenting section and 85.10% in overall increase, the respondents are eligible for the benefit of expansion in term of Para 3(b) of the said notification No. 33/99CE dated 08.07.1999.
(x)The ld. Appellate Authority took note of the letter dated 23.04.2001 wherein the respondent had stated that they completed expansion of withering trough and fermenting floor to Page 22 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB increase the manufacturing capacity resulting in increase of the production capacity of the factory. Machinery layout plant and stability certificate issued by the Chief Inspector of Factories had also been forwarded. The respondent also had stated that they wanted to avail exemption benefit and the respondent had been filing statement of the duty paid by way of RT-12/ER-1 every month and the declaration filed on 10.09.2002 under Rule 57T(1), Rule 57T(2) of the Central Excise Rules, 1944 thereby giving all details of machinery for increasing production capacity.
(xi) In other words, it may be submitted that the said referred letter dated 23.04.2001 is not by itself invocation of the exemption under the said notification. The exemption contemplated in the said notification had already been noted by the adjudicating authority as also the fact that the month-wise statement of duty paid during July 1999 to March 2003 along with copy of relevant PLA and TR-6 Challans had been filed by the respondent and/or had been filing the necessary RT-12/ER-1 every month. These facts were never denied by the appellants because these facts are all matters of record. Based on these facts the Commissioner (Appeals) held that the Department was duty bound to verify the claim of the appellants mentioned in the letter dated 23.04.2001.
(xii) The Department merely stated that Assistant Commissioner, Central Excise, Digboi had confirmed that no such letter dated 23.04.2001 was received either in the Divisional Office or that Range Office in reply to the letter Page 23 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB of the department (though these letters were not disclosed in the instant appeal), but has not disputed the (a) existence of such letter and (b) the contents of such letter, which already is otherwise on record by virtue of submission of the RT-12/ER-1 every month and the declaration filed on 10.09.2002 under Rule 57T(1), Rule 577(2) of the Central Excise Rules, 1944 by the respondent. Therefore, in any event, the factual positions as contained in the said letter dated 23.04.2001 regarding the factum of expansion of the respondent tea estate and the eligibility of being granted exemption under the said notification is undisputed by the appellant. The appellant also has not disputed the filing of statement of the duty paid by way of RT-12/ER-1 every month by the respondent.
(xiii) From the scheme of the said Notification No. 33/99-C.E. dated 08.07.1999, it is clear that once the manufacturer has fulfilled its obligation under Clause 2(a) thereof, the duty to give effect to exemption, mandatorily, falls squarely upon the Department in terms of Clause 2(b) thereof. It transpires that the duty under Clause 2(b) is entirely cast upon the Department as the manufacturer does not have any function to play under Clause 2(b).Therefore, the Commissioner (Appeals) is justified and is sustainable being based on materials on record.
4.2. As regards ground (B) taken by the Revenue in Excise Appeal No. 175 of 2010, the respondent have stated the following: -
Page 24 of 30Appeal No(s).: E/175/2010 & E/70039/2013-DB
(i) The said letter dated 23.04.2001 is not itself the lodging of any claim but rather and recording and narration of claims already lodged by filing of timely monthly statements of duty paid. In other words, even without the said letter the respondent shall be entitled to the exemptions as admissible under the said exemption notification.
(ii) It is not the stand of the Department that the letter dated 23.04.2001 does not exist. The stand of the Department is that no such letter dated 23.04.2001 was received either in the Divisional Office or that Range Office in reply to the letter of the Department. Such purported non-receipt of the aforesaid letter dated 23.04.2001 does not necessarily indicate absence or non-existence of such document. On the contrary, the said letter dated 23.04.2001 did not introduce any new consideration before the Department for granting of exemption under the said notification since it was already placed before the Department by virtue of filing the necessary monthly statements of duty paid. At best, such letter dated 23.04.2001 can only be construed as a reminder to the Department that they ought to have acted in accordance with the said notification. The letter dated 23.04.2001 is therefore not essential for granting of exemption but it served the purpose of reminding the Department to do something which the Department any way ought to have done on its own without there being a need to be reminded to do so.Page 25 of 30
Appeal No(s).: E/175/2010 & E/70039/2013-DB
(iii) In any event, the appellate authority being the Commissioner (Appeals) under Rule 5 of the Central Excise (Appeals) Rules, 2001 is in any event empowered to admit additional evidence in the appeal. The Commissioner (Appeals) notes in its order that, in the findings of the impugned order it is seen that there is no reference to the letter dated 23.04.2001 and it only refers to a refund application dated 16.06.2005 of the manufacturer being the respondent herein. In such circumstances the Commissioner (Appeals) had taken note of the said letter dated 23.04.2001.
(iv) Hence, the purported stand of the Department to deny the respondent tea estate from the exemption which it is entitled to under the said exemption notification on the ploy and/or pretext of non-receipt of the said letter dated 23.04.2001 that it is admitting and accepting non-existent additional evidence produced during the hearing at the Appellate Stage which the respondent never produced before the original authority in the earlier proceedings is unsustainable. While the Department alleges that the Assistant Commissioner of Central Excise, Digboi Division has confirmed that neither the Division nor its Range Office received any such letter dated 23.04.2021 it did not raise such objection before the Commissioner (Appeals) neither it could prove that the acknowledgement of receipt of the letter dated 23.04.2001 by the Department is not genuine.
Page 26 of 30Appeal No(s).: E/175/2010 & E/70039/2013-DB 4.3. With regard to grounds taken by the Revenue in the Excise Appeal No. 70039 of 2013 that refund sanctioning authority did not wait for the decision in the stay application filed before the CESTAT in Appeal No. E/175/2010 before sanctioning the refund and that while deciding the case and that the sanctioning authority had ignored the Department's valid legal grounds of appeal before the CESTAT, the respondent contends that this argument is wholly untenable in view of the well-settled proposition of law laid down in the case of Atmaram Properties (P) Ltd. vs Federal Motors Pvt. Ltd. reported in (2005) 1 SCC 705 wherein the Hon'ble Supreme Court has held that mere preferring of an appeal does not operate as stay on the decree or order appealed against nor on the proceedings in the Court below. It is their submission that a prayer for the grant of stay of proceedings or on the execution of decree or order appealed against has to be specifically made to the appellate court and the appellate court has discretion to grant an order of stay or to refuse the same; the only guiding factor is the existence of sufficient cause in favour of the appellant on the availability of which the appellate court would be inclined to pass an order of stay; It is the respondent's submission that the question which the court dealing with a prayer for grant of stay asks itself is: why the status quo prevailing on the date of the decree and/or the date of making of the application for stay be not allowed to continue by granting stay, and not the question why the stay should be granted.
5. Heard both sides and perused the appeal records.
Page 27 of 30Appeal No(s).: E/175/2010 & E/70039/2013-DB
6. We find that the respondent has claimed the benefit of Notification No. 33/1999-C.E. dated 08.07.1999 under Para 2(a) read with Para 3(b) of the said Notification. The claim of the respondent was verified by the Ld. Assistant Commissioner of Central Excise, Digboi on 17.06.2008 and it was found that the percentage of increase in installed capacity by way of substantial expansion during the post expansion period was made by way of (i) withering troughs = 25.39% and (ii) fermenting floor - 88.88%. Thus, we find that the respondent had fulfilled the condition prescribed in the Notification No. 33/99-C.E. dated 08.07.1999 and thus the ld. adjudicating authority found the respondent to be eligible for the refund and sanctioned the refund and the said order has been upheld by the Commissioner (Appeals). However, the Revenue has objected to it stating that the refund claims in these cases were filed by the respondent after a lapse of seven years from the date of eligibility to Notification No. 33/99-C.E. dated 08.07.1999 which is not a reasonable period, as contended.
6.1. In this regard, we note that the respondent have fulfilled the condition of 25% substantial expansion in the capacity and have also filed the statement of duty paid by way of RT-12 / ER-1 every month. Accordingly, we observe that they have fulfilled both the conditions stipulated in Notification No. 33/99-C.E. dated 08.07.1999 for availing the benefit.
6.2. Regarding the issue of delay in filing the refund claims, we observe that the Tribunals in a number of cases, namely, (1) Commissioner of Central Excise vs Vinay Cement Limited, reported in 2002 (147) E.L.T. 724; (2) Commissioner of Central Excise vs Napuk Tea Estate reported in 2007 (219) E.L.T. 178 and (3) Page 28 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB Dhanseri Tea Estate vs. Commissioner of Central Excise, reported in 2011 3 (274) E.L.T. 590 have held that statements of duty paid submitted in RT-12 returns amount to full compliance of Clause 2(a) of the said notification and refund of duty paid cannot be denied for want of separate claim for refund of duty paid. In an identical case of disposing multiple Central Excise appeals including C.Ex.App. 8/2016 (MK Jokai Agri Plantations Limited & Anr. vs. Commissioner of Central Excise, Dibrugarh )the Division Bench of the Hon'ble Guwahati High Court has held that an incumbent having been once found to be eligible for exemption and refund of duty paid, denial of benefit of exemptions and refund on the ground of delay, would cause grave injustice which cannot be permitted.
6.3. Thus, we observe that the issue is no longer res integra as the issue has been decided in favour of the appellant in case of M.K. Jokai Agri Plantations Ltd. & ors. v. Commissioner of Central Excise and Service Tax, Dibrugarh [Case No. C.Ex.App 8/2016 dated 20.02.2018 - Gauhati High Court]. The relevant portion of the Order passed by the Hon'ble High Court is reproduced below: -
"11. A bare reading of the above quoted clauses of the Notification makes it clear that the appellant was first required to prove its eligibility for notified exemptions by establishing that the three industrial units had undertaken substantial expansion of not less than 25% on or before 24 day of December, 1997 and then file every month's statement of duty paid from the account current to the Assistant Commissioner. And, if these two conditions were fulfilled, the appellant was entitled to refund of the amount of duty paid. As seen above, the appellant has fully established before the Commissioner (Appeals) that the three industrial units had undertaken increase by more than 45.80%, 57% and 27.56% after 24.12.1997 The finding of the Page 29 of 30 Appeal No(s).: E/175/2010 & E/70039/2013-DB Commissioner (Appeals) confirming this position was not questioned by the Revenue in appeals filed before the Tribunal. The eligibility of the appellant for the benefit of exemptions and refund of duty paid stands conclusively proved. Clause 2(a) of the Notification only says that the manufacturer shall submit a statement of the duty paid by 7 of next month in which the duty has been paid from the account current. The Notification nowhere mandates the manufacturer to submit a separate claim for refund of duty paid. The appellant has admittedly been submitting statements of the duty paid from account current in RT-12 returns within time with all de-tails before the Assistant Commissioner. The appellant having been once found to be eligible for exemptions and refund of duty paid, denial of benefit of exemptions and refund on the ground of delay, in our considered opinion, will cause grave injustice which cannot be permitted. Even otherwise, it is well settled law that non-following of procedural requirement cannot deny the substantive benefit, otherwise available to the assessee. Also exemptions made with a beneficient object like growth of Industry in a Region have to be liber-ally construed and a narrow construction of the Notification which defeats the object cannot be accepted. For these reasons, we conclude that the impugned order of the Tribunal is not based on correct appreciationof the provisions of Notification and denial of refund (of duty paid) to the appellant on the ground of delay is wholly unjustified. We also hold that statements of duty paid submitted in RT- 12 returns by the appellant was substantial compliance of Clause 2(a) of the Notification and there was no need for it to submit a separate statement of the duty paid and claim refund. The Tribunal itself earlier in number of cases viz. Commissioner of Central Excise v. Vinay Cement Ltd., 2002 (147) E.L.T 74, Commissioner of Central Excise v. Napuk Tea Estate, 2007 (219) E.L.T 178 and Dhunseri Tea Estate v. Commissioner of Central Excise, 2011 (274) E.L.T 590 has held that statements of duty paid submitted in RT-12 returns amounts to full compliance of Clause 2(a) of the Notification and refund of duty paid cannot be denied for want of separate statement of such duty paid. A long standing decision adopting a particular construction which may have been acted upon by persons in the general conduct of affairs may not be departed from on the doctrine of stare decisis."Page 30 of 30
Appeal No(s).: E/175/2010 & E/70039/2013-DB 6.4. We also find that the respondent has fulfilled the condition of 25% expansion in capacity as has been verified by the adjudicating authority. Secondly, the respondent has been filing their RT-12 / ER-1 Returns indicating their duty liability. In these circumstances, by relying on the decision of the Hon'ble Gauhati High Court referred to above, we hold that the respondent has fulfilled the conditions prescribed in the Notification No. 33/99-C.E. dated 08.07.1999 and the refund has been rightly sanctioned to the respondent.
7. Therefore, we hold that the lower authorities have rightly allowed the refund claims filed by the respondent.
8. Accordingly, we uphold the impugned orders passed by the Ld. Commissioner (Appeals) and reject the appeals filed by the Revenue.
(Order pronounced in the open court on 25.02.2025) Sd/-
(ASHOK JINDAL) MEMBER (JUDICIAL) Sd/-
(K. ANPAZHAKAN) MEMBER (TECHNICAL) Sdd