Customs, Excise and Gold Tribunal - Delhi
Narayani Textiles Pvt. Ltd. vs Cce on 9 October, 2003
Equivalent citations: 2004(93)ECC92, 2004(163)ELT73(TRI-DEL)
ORDER P.G. Chacko, Member (J)
1. The appellants are an independent textile processor covered under the compounded Levy Scheme w.e.f. 16.12.1998. Prior to 16.12.98, they were availing the benefit of deemed Modvat credit under Notification No. 29/96-CE (NT) dated 3.9.96 for the purpose of payment of central excise duty on their final products viz. processed fabrics when cleared for home consumption or for export under Bond. From the said date, under the Compounded Levy Scheme introduced under Scheme 3 A of the Central Excise Act, they were not in a position to utilize the deemed Modvat credits accumulated in their account, towards payment of duty of excise on any final product cleared for home consumption or for export under Bond. Under sub-rule (13) of Rule 57F of the erstwhile Central Excise Rules 1944, they were entitled to cash refund of the amount equivalent to such unutilized credit, subject to such safeguards, conditions and limitations as might be specified by the Central Government by Notification in the Official Gazette. Notification No. 85/87-CE dated 1.3.1987, which had been issued under the first proviso to sub-rule (3) of Rule 57F, had laid down the safeguards, conditions and limitations in relation to such refunds. [The provisions contained in the said first proviso later on came to be embodied in sub-rule (13) of Rule 57F]. These safeguards, conditions and limitations read as under:-
"1. The goods are exported in accordance with the procedure specified in Chapter IX of the Central Excise Rules, 1944, as modified, wherever applicable, by rule 173-O of the said rules.
2. The claims for such refund are submitted not more than once in any quarter in a calendar year.
3. No refund shall be allowed in respect of final products exported to Nepal.
4. The manufacturer undertakes to refund to the Assistant Collector of Central Excise, on demand being made, within six months of the date of payment, any refund erroneously paid to him.
5. The manufacturer shall prepare an application in Form A below and present to the Assistant collector of Central Excise in whose jurisdiction the factory from which the goods are exported is situated together with the Bill of landing or Shipping Bill or Export Application duly certified by the Customs Authorities to the effect that goods have in fact been exported.
6. The refund shall be allowed only in those circumstances where a manufacturer is not in a position to utilize the credit of the duty allowed under rule 57A against goods exported during the quarter to which the claim relates.
7. The application for refund together with the proof of due exportation and the relevant extracts of form RG-23A in original are lodged with the Assistant Collector of Central Excise before the expiry of the period specified in Section 11B of the Central Excises and Salt Act, 1944 (1 of 1944).
8. The refund of excise duty shall be allowed by the said Assistant Collector of Central Excise."
2. The appellants had in their account unutilized deemed Modvat credits totalling to Rs. 5, 98, 236/- as on 16.12.98, for which they filed a refund claim on 17.5.99. This claim was rejected by the jurisdictional Dy. Commissioner of Central Excise on numerous grounds including (a) that the claim was presented in wrong Form (Form-R instead of Form-A) and under wrong provision of law [(Rule 173 S read with Section 11B, instead of Rule 57F (13)], (b) that the condition stated in para (4) of Appendix to Notification No. 85/87-CE dated 1.3.87 (as amended) had not been complied with, (c) that the original documents evidencing export of goods under Bond were not submitted and (d) a major part of the claim was time-barred. The appeal preferred by the party to the Commissioner (Appeals) against the decision of the original authority did not succeed. Hence the present appeal.
3. We have carefully examined the records and heard both the sides.
4. Ld. Counsel for the appellants submitted that no dispute had been raised as to the export of the goods under Bond and, therefore, it was not correct on the part of the original and first appellate authorities to insist on production of original export documents as proof of export. The photocopies of the documents produced by the party should have been accepted by the authorities. It was not correct on the part of the authorities to reject the refund claim in terms of Notification No. 85/87-CE as the claim was not as contemplated under the said notification but a claim of unutilized credit in accordance with Section 11B of the Central Excise Act. For this very reason, the claim filed in 'Form R' was in order . On the time-bar issue, Id. Counsel submitted that the period of six months prescribed as limitation under Section 11B should, in this case, have been calculated from 16.12.98 and not from the date of exportation of the goods as alleged in the show-cause notice. If so calculated, no part of the refund claim would be time-barred. Ld. Counsel contended that it was not correct to deny the substantive benefit of refund of the amount of unutilized credit to the appellants on procedural grounds like non-production of original documents, claim having been filed in wrong proforma, etc. In this connection, he relied on the following decisions:-
(i) Hotline Teletube & components Ltd. v. CCE, Indore [1998 (102) ELT 33 (Tribunal)]
(ii) Amrutanjan Ltd. v. CCE, Chennai 2001 (128) ELT 244 (Tribunal-Chennai)
(iii) Wonderseal Packing v. CCE, Nagpur [2002 (147) ELT 626 (Tribunal-Delhi)].
5. Ld. SDR defended the impugned order by submitting that the conditions laid down under Notification No. 85/87-CE were of a mandatory nature and non-fulfilment thereof would necessarily result in rejection of the refund claim. With reference to condition No. 6, he submitted that the appellants had not succeeded in establishing that they were not in a position to utilize the credit of duty allowed under Rule 57A against the goods exported during the relevant period. It was further submitted, with reference to condition No. 7, that non-production of original export documents within the time prescribed under Section 11B of the Act was fatal to the refund claim. It was argued that even a procedural condition was not to be condoned. Ld. DR sought to draw support to this plea from the Supreme Court's decision in Indian Aluminium Company Ltd. v. Thane Municipal Corporation [1991 (55) ELT 454 (SC)]. On the limitation issue, the DR contested the counsel's argument by submitting that, under Section 11B of the Act, the relevant date for calculating the period of limitation was the date on which the exportation commenced. In this connection, he referred to the Supreme Court's decision in CCE, Chandigarh v. Doaba Cooperative Sugar Mills [1988 (37) ELT 478 (SC)]. In his rejoinder, Id. Counsel submitted that the relevant date was the date on which the appellants came to know that they were not able to utilize the deemed credit, which was the date on which they came to be covered under the Compounded Levy Scheme.
6. We have carefully considered the submissions.
Ld. Counsel has endeavoured to take this case out of the purview of Notification No. 85/87-CE and put it in the realm of ordinary refund claiMs. We are unable to accept this. The above notification was issued under the 1st proviso to sub-rule (3) of Rule 57F, which provision later on came to be embodies in sub-rule (13) of the Rule. During the revelant period to which the refund claim relates sub-rule (13) of Rule 57F was in force and the above notification operated under this provision. Going by the text of sub-rule (13) of Rule 57F as also the notification, we find that Condition No. 7 contained in the Appendix to the notification was mandatory and accordingly, it was incumbent on the claimant to furnish proof of exportation and relevant extracts of RG-23A register in original to the jurisdictional officer of central excise within the period of six months from the relevant date under Section 11B of the Central Excise Act. The meaning of "relevant date" under Section 11B is abundantly clear from the following excerpt :
"relevant date" means, --
(a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods, --
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or
(ii) if the goods are exported by land, the date on which such goods pass the frontier, or
(iii) if the goods are exported by post, the date of dispatch of goods by the Post Office concerned to a place outside India, ".
The refund claim should have been filed within six months from the date of exportation. Admittedly, in this instant case, a major part of the claim is beyond this period. Over and above this, the appellants, admittedly, did not file the original documents with the proper officer in terms of Condition No. 7. As the mandatory conditions were not fulfilled by the appellants, the lower authorities appear to have rejected the refund claim in accordance with law. The case law cited by the counsel is not applicable to the facts of this case. The question whether condition No. 7 ibid was substantive and mandatory had not been considered in the cases of M/s . Hotline Teletube & Components Ltd., Amrutanjan Ltd., and M/s . Wonderseal Packing. On the other hand, the apex court's ruling in Indian Aluminium Company's case, cited by the DR, seems to support the Revenue's plea relating to the said condition.
7. In the result, we uphold the impugned order and reject this appeal.