The Gujarat High Court has issued notice for initiating contempt proceedings against an Additional Secretary to the Government of India after finding that a fresh order rejecting excise rebate claims attempted to “overreach and dilute” its earlier directions.

The Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati observed that the revisional authority had acted as though he was sitting in appeal over the High Court’s judgment, despite an express finding that the Central Excise Rules, 1944, were not applicable to the dispute.

Buy Now: 80+ Judgements Indirect Tax – September 2026 E-Magazine

The appellant/assessee challenging the fresh revisional order dated September 1, 2026. The Court directed that Dr. Prem Varma, Additional Secretary to the Government of India, be added as a respondent and issued notice to him for initiating contempt proceedings. 

The dispute concerns the rejection of excise rebate claims and the legal framework governing their admissibility.

The petitioners had previously challenged a revisional order dated December 13, 2021, through Special Civil Application No. 7014 of 2022. They argued that the revisional authority had relied on the Central Excise Rules, 1944, although those rules had been superseded.

Their case was that the rebate claims required examination under the Central Excise Rules, 2001, the subsequent rules, and Conditions 2(e) and 2(h) of Notification No. 19/2004 dated September 6, 2004, issued under Rule 18 of the Central Excise Rules, 2002.

In its September 26, 2024 judgment, the High Court noted that the revisional authority had relied on Rules 187, 187A and 187B of the 1944 Rules, which were inapplicable to the facts of the case.

The Court consequently quashed the December 2021 order and directed the authority to decide the revision applications afresh under the applicable rules and notification, after providing an adequate opportunity of hearing.

Following the remand, the revisional authority passed a fresh order on September 1, 2026, again denying the rebate benefit.

According to the portions reproduced in the High Court’s latest order, the authority held that the exporter had failed to follow the procedure prescribed in Circular No. 426/59/98-CX dated October 12, 1998, as amended on August 11, 2003.

The authority stated that an exporter using the self-sealing or self-certification facility was required to give the jurisdictional Central Excise Range Officer at least 24 hours’ advance intimation containing details of the goods and their proposed clearance. It found that the applicant had not furnished such intimation.

Although the circular originated under the 1944 Rules, the authority reasoned that it continued to operate through Rule 32 of the Central Excise Rules, 2001, read with Rule 33 of the Central Excise Rules, 2002. These transitional provisions preserve earlier instruments to the extent that they remain relevant and consistent with the successor rules.

The authority also relied on the Supreme Court’s decision in Eagle Flask Industries Ltd. v. Commissioner of Central Excise, Pune to support its position that conditions governing a statutory benefit must be strictly complied with. It concluded that the applicant had failed to satisfy Condition 2(h) of Notification No. 19/2004 and the requirements of prior intimation and supervision.

The Division Bench took exception to the approach adopted in the fresh order.

It observed that the revisional authority had applied the 1944 Rules despite the earlier judgment expressly holding them inapplicable to the case.

The Bench stated that the authority had passed the order “as if he was sitting in Appeal against the judgment and order passed by the Division Bench of this Court.”

It further expressed the opinion that the officer had attempted to overreach and dilute the Court’s directions.

The immediate issue before the Bench therefore concerned compliance with its binding remand directions, alongside the petitioners’ challenge to the fresh rejection of their rebate claims.

The Court issued notice for initiating contempt proceedings against Dr. Prem Varma and separate notices to the existing respondents, all returnable on November 3, 2026. It directed that the matter be placed at the top of the board.

The Senior Standing Counsel waived service for the existing respondents and was directed to obtain instructions before the next hearing. The Bench warned that failure to do so could lead it to draw an adverse inference. The Registry was directed to communicate the order to the newly added respondent immediately.

The order initiates the contempt process; it does not record a final finding of contempt or finally determine the petitioners’ entitlement to rebate.

Membership Required to Access Case Details & Order Copy

To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.

Read More: No Mini-Trial at Cognizance Stage: Directors’ Claim of Cooperation Must Be Examined During Trial