2025-VIL-1836-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Area-based exemption, Mentioning of wrong notification, Notification No. 56/2003 vs Notification No. 20/2007 – Appellant had set up a unit in Sikkim and opted to avail the benefit of exemption under Notification No. 56/2003. Later, the notification was amended to provide exemption based on value addition, reducing the exemption benefit to 56% from 100%. The appellant filed refund claims claiming 100% duty paid, but the jurisdictional officer sanctioned the claims by reducing the amount to 56%. The revenue issued a SCN demanding the alleged erroneous refund, as the appellant's unit commenced commercial production after the due date specified in the notification - Whether the appellant is eligible for the 100% exemption benefit under Notification No. 20/2007, instead of 56% under Notification No. 56/2003, despite the inadvertent mentioning of the wrong notification in the refund claims – HELD - The conditions imposed and benefits available under both the notifications are same and identical, and the legislative intent was to continue the 100% exemption benefit for the units operating in the Sikkim region. The only difference is that the industries which have commenced their commercial production between 23.12.2002 to 31.03.2007 are entitled for the benefit under Notification No. 56/2003-CE whereas the industries which have commenced their commercial production between 01.04.2007 to 31.03.2017 are entitled for the benefit under Notification No. 20/2007-CE - It is a case of mere inadvertent mentioning of Notification No. 56/2003-CE instead of Notification No. 20/2007-CE. As the appellant had duly complied with all the relevant provisions of the Notification No. 20/2007-CE, the inadvertent error in wrong mentioning of the Notification No. 56/2003 would not disentitle them from availing the benefit of Notification No. 20/2007 which is otherwise entitled to them - The appellant is eligible for the 100% exemption benefit under Notification No. 20/2007 and the demand on account of allegedly erroneous refund is not legally sustainable - The impugned order is set aside and the appeal is allowed - Whether the show cause notice issued by the revenue for recovering the allegedly erroneous refund is legally sustainable – HELD - The SCN issued by the revenue for recovering the allegedly erroneous refund is not legally sustainable. Relying on the decision of the Madras High Court in Eveready Industries India Ltd. Vs CESTAT, the Tribunal observed that once the refund orders were passed by the adjudicating authority under Section 11B of the Act, the revenue could not have taken recourse to recover the refund by issuing a show cause notice under Section 11A, without challenging the refund orders before the appellate authority.
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