Custom, Excise & Service Tax Tribunal
Reva Electric Car Company Pvt Ltd vs Commissioner Of Central Excise ... on 6 May, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order .20711 / 2014 Appeal(s) Involved: E/841/2007-DB [Arising out of 217-2007 dated 28/09/2007 passed by , ] REVA ELECTRIC CAR COMPANY PVT LTD 122-E BOMMASANDRA INDUSTRIAL AREA BANGALORE Appellant(s) Versus Commissioner of Central Excise ,Customs and Service Tax BANGALORE-I NULL POST BOX NO 5400...CR BUILDINGS, BANGALORE, - 560001 KARNATAKA Respondent(s)
Appearance:
None HIRAGANGE & ASSOCIATES #1010, 1st floor(Above Corp.Bank) 26th Main, 4th T Block, Jayanagar, BANGALORE - 560041 KARNATAKA For the Appellant Shri S. Teli, Deputy Commissioner(AR) For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 06/05/2014 Date of Decision: 06/05/2014 Order Per : B.S.V.MURTHY The issue involved is whether the appellant is eligible for claim of refund of CENVAT credit of Rs.14,77,508/- which was claimed on the ground that the credit on the inputs used in the manufacture of electric cars cleared for export under bond were not utilised. The matter was decided vide Final order No.1376/2009 dt. 13/11/2009 thereby the appeal was rejected.
2. The appellants carried the matter before the Honble High Court of Karnataka taking the ground that the order could not have been passed since the amount involved was more than Rs.10 lakhs and a single Member Bench could not have decided the issue when the amount involved was more than Rs.10 lakhs. Honble High Court vide their order dt. 12/04/2011 in CE Appeal No.40 of 2010, set aside the order and directed that the matter may be considered afresh by a Bench consisting of two Members. The Honble High Court also directed that the appeal should be disposed within three months from the date of receipt of copy of the order. The order was received in the office of the Tribunal on 18th July 2011.
3. Thereafter the matter has been coming up before this Tribunal. On 18/08/2011 the matter was adjourned as requested by the counsel for the appellants. Thereafter on 13/09/2011, nobody was present on behalf of the appellant. On 18/01/2012, matter was adjourned. Thereafter on 19/06/2012, the matter did not reach and on 25/07/2012, the learned counsel for the appellants requested for adjournment. Again on 30th July 2012, on the request of the counsel for the appellants the matter was adjourned to 07/08/2012 and again on 17/09/2012, advocate sought adjournment. It was recorded that the matter adjourned finally to 18/09/2012. Again on 18/09/2012, the matter did not reach and got adjourned. Thereafter the matter came up on 30/05/2013 when the matter was adjourned because one of the Members recused himself. On 03/07/2013, matter was adjourned as it did not reach. On 13/02/2014 also, the matter got adjourned since it did not reach. Today when the matter was called nobody is present on behalf of the appellant nor is there any request for adjournment. The number of hearings fixed and posted as detailed above would show that the appellants have been given sufficient opportunity to present their case which they have failed to utilize. Either the matter did not reach or when it reached, the appellants have sought adjournment. Therefore the matter is taken up for final decision today so that the directions of the Honble High Court can be implemented.
4. The brief facts of the case are that appellant filed a refund claim of CENVAT credit taken on the ground that the credit could not be utilised in respect of electric cars cleared for export under bond during the period from 13/01/2005 to 16/09/2005. The refund claim was made under Rule 5 of CENVAT Credit Rules, 2004 (CCR) read with Notification No.11/2002-CE(NT) dt. 01/03/2002 as amended. The claim was rejected on the ground that it was not in accordance with the rules and the notification. The appeal filed against this decision was rejected.
5. In the appeal memorandum, the appellants have submitted that the refund claim has been rejected only on the ground that refund of input CENVAT credit can be claimed only when the final product exported under bond and or letter of undertaking and not otherwise. The appellants also had relied upon the decision in the case of CCE Vs. Indo Dane Textile Industries [2007(213) ELT 117 (Tri.)]. It was submitted that there is an accumulation of credit for the reason that duty payable on the final products is 8% whereas inputs suffered 16%.
6. It was submitted by the learned AR that the provision of Rule 5 specifically states that refund of CENVAT credit shall be allowed only if the manufacturer of the provider of input service does not claim drawback or rebate of duty under Central Excise Rules in respect of such duty. In this case, the refund claim has been rejected on the ground that the appellants had claimed rebate of Central Excise duty.
7. We have considered the submissions of learned AR and perused the records. In this case appellant had cleared the goods for export on payment of duty as per ARE1 and filed rebate claims which were sanctioned. The accumulation of CENVAT credit has not arisen because of exports but because of difference in rates of duty on inputs and the final products. It is also undisputed that there cannot be any bond or letter of undertaking when the export was made on payment of duty. Provisions of Rule 5 are reproduced below:-
Rule 5. Refund of CENVAT credit. -Where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of,
(i) duty of excise on any final product cleared for home consumption or for export on payment of duty; or
(ii) service tax on output service, and where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification:
Provided that no refund of credit shall be allowed if the manufacturer or provider of output service avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Service Rules, 2005 in respect of such tax.
8. It can be seen from the reproduced rule, it is very clear that refund cannot be allowed when the manufacturer or provider of output service avails of drawback or claimed rebate of duty under Central Excise Rules 2002. In this case, the appellants had claimed rebate of duty and there is no contrary submissions. Therefore the rejection of refund claim on this ground has to be sustained.
9. As regards the reliance placed on the decision in the case of Indo Dane Textile Industries (supra), we find that the said decision held that unutilized CENVAT credit of additional excise duty is allowed to be given as a refund of the cash as the final product does not suffer any additional duty of excise when they were being exported. The relevant findings mentioned in paragraph 8 are reproduced below:
8. . .They admittedly exported the goods by payment of excise duty which was done by adjusting the basic excise duty which was payable under the Central Excise Act, 1944, for which the rebate claim was made under Rule 18. Rebate is granted of duty paid on the excisable goods, as contemplated by Rule 18. No additional excise duty was payable on the final products and therefore, rebate could have been claimed only in respect of the duty paid which was the specific excise duty relatable to Rule 18 read with Section 3 of the Central Excise Act, 1944. No application for rebate of additional excise duty which was paid on the inputs, was made under Rule 18 read with Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act. . .
10. It can be seen from the above reproduced portion of the order from paragraph 8, that the Tribunal had held, that since there was no additional excise duty payable on the final products, the refund could not have been claimed on the inputs as the final product does not suffer additional duty of excise.
11. In view of the above, we find that the impugned order is in accordance with law and has to be sustained. Accordingly, the appeal is rejected.
(Operative portion of the order pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER B.S.V.MURTHY TECHNICAL MEMBER Raja 4