Corrigendum amending conditions for claiming exemption would apply from date of original Exemption Notification

Polyplex Corporation Ltd.(the Petitioner) was engaged in manufacturing and export of polyester film. The polyester films were exported to various countries in terms of Rule 18 of Central Excise Rules, 2002 (the Excise Rules) for the period December 2004 to March 2005. The Petitioner did not claim any rebate on Inputs under Rule 18 of Excise Rules.

The Petitioner availed benefit of exemption in respect of ‘imported raw materials’ under Advance License in terms of Notification No. 93/2004-Customs (Tariff) dated September 10, 2004 (“the Exemption Notification”).

The Department denied said exemption on the ground that as per condition in Para (v) of the Exemption Notification, exemption is not available if rebate under Rule 18 of the Excise Rules is taken.

The Petitioner argued that as per M.F. (D.R.) Corrigendum F. No. 605/50/2005-DBK, dated May 17, 2005, (“the Corrigendum”) the condition (v) was modified and exemption was available if rebate under Rule 18 of the Excise Rules ‘in respect of raw materials/ inputs’ was not claimed, which was satisfied by the Petitioner.

On the contrary, the Department argued that the Corrigendum have prospective effect. The same was upheld by the Commissioner (Appeals). Being aggrieved, the Petitioner preferred Revision application to the Central Government which was also rejected vide order dated August 24, 2009.

Being aggrieved, the Petitioner filed a petition before the Hon’ble High Court of Allahabad. The Hon’ble High Court of Allahabad relied upon the following case laws:

• Commissioner, Sales Tax Dunlop India Ltd. [(1994) 92 STC 571 (AR)]
• State of Rajasthan J.K. Udaipur Udyog Ltd. [(2004) 7 SCC 673]
• Jugilant Organosys Ltd.Vs.  CCE [2012(276) ELT 335 (Kar.)] 
• Tata Iron & Steel Co. State of Jharkhand [(2005) 4 SCC 272]
• CCE Mahaan Dairies [(2004) 11 SCC 798]

and held that the Corrigendum is issued for the correction of error or omissions in the original document, which relates back to the date of initial authoring for the reason that correction means whatever written was not correct or there was some mistake which need be corrected. The Authorities have committed a manifest error of law. Accordingly, the Rebate claims were allowed to the Petitioner.