Custom, Excise & Service Tax Tribunal
M/S Rswm Ltd vs Cce & St, Jaipur I on 2 June, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV DATE OF HEARING : 19/05/2016. DATE OF DECISION : 02/06/2016. Excise Appeal Nos. 52834 of 2015 (SM) [Arising out of the Order-in-Appeal No. 300 (SLM) CE/JPR/ 2015 dated 06/05/2015 passed by The Commissioner (Appeals), Customs, Central Excise & Service Tax, Jaipur.] For Approval and signature : Honble Shri B. Ravichandran, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair : copy of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s RSWM Ltd. Appellant Versus CCE & ST, Jaipur I Respondent
Appearance S/Shri B.L. Narsimhan and Vipul Agarwal, Advocates for the appellant.
Shri M.R. Sharma, Authorized Representative (DR) for the Respondent.
CORAM : Honble Shri B. Ravichandran, Member (Technical) Final Order No. 52012/2016 Dated : 02/06/2016 Per. B. Ravichandran :-
The appeal is against order dated 06/5/2015 of Commissioner (Appeals), Jaipur rejecting their claim for refund of Cenvat credit of Additional Duties of Excise [Textiles and Textile Articles] AED [T&TA] in short. The appellants are engaged in the manufacture MM Yarn and are registered with the Department for payment of Central Excise duty. They are availing credit of duty paid on Polyester/Viscose/Acrylic Fibers used by them as inputs. Both inputs and their final products were chargeable to AED [T&TA] till 08/7/2004, however, both were exempted w.e.f. 09/7/2004 for AED [T&TA]. On the date of exemption they had credit balance of AED [T&TA] of Rs. 27,25,433/- availed on inputs. Out of this amount, they have utilized Rs. 1,22,234/- for payment of AED [T&TA] liable during period 01/7/2004 to 08/7/2004. In March 2005 they are filed three rebate claims on the duty amounts [BED, AED [T&TA] and E. Cess]. These rebate claims were rejected by the Original Authority and on appeal the same was allowed. On further appeal by the Revenue, the Revision Authority set aside the appellate order and restored the original order of rejection of rebates. The appellants moved the Honble High Court of Rajasthan which was later dismissed as withdrawn by the Honble High Court. They have taken re-credit of the amounts which was earlier debited in their account, before filing rebate claims in March, 2005. The said re-credit was approved by the Jurisdictional Assistant Commissioner. The re-credited Cenvat amount included credit of AED [T&TA] amounting to Rs. 22,54,910/-.
2. The appellants on 18/5/2011 filed a refund claim for Rs. 26,03,030/- on the ground that the AED [T&TA] was exempt w.e.f. 09/4/2004 and the balance available on that day could not be utilized, the cash refund of the same is entitled to them in terms of Board Circular dated 12/3/2003 and 23/3/2007. The claim was rejected by the Original Authority on 30/5/2012. On appeal, the order was upheld by the Commissioner (Appeals) vide the impugned order.
3. Challenging the findings of the lower Authority, learned Counsel for the appellants mainly submitted on the following grounds :-
(a) They are entitled to the refund claim in terms of Rule 5 of Cenvat Credit Rules 2004 on credits taken on the said inputs used in the final products, which were cleared on payment of duty. The AED [T&TA] could not be otherwise utilized because of exemption. The Boards clarification dated 12/3/2003 is relied upon ;
(b) The Tribunal in the case of CCE, Rohtak vs. Indo Dane Textile Industries reported in 2007 (213) E.L.T. 117 (Tri. Del.) held that refund for AED [T&TA] was admissible to the Assessee as the rebate claim under Rule 18 will not bar such claim. The decision was upheld by the Honble Punjab & Haryana High Court reported in 2012 (275) E.L.T. 189 (P&H). Reliance was also placed on Tribunal decision in STL Products (P) Ltd. vs. CCE, Bangalore reported in 2006 (198) E.L.T. 521 (Tri. Bang.) ;
(c) The refund claim under Rule 5 of Cenvat Credit Rules is not governed by the time limit prescribed under Section 11B of the Central Excise Act, 1944. There is no relevant date prescribed under the said Section to cover the claim filed under Rule 5. Reliance was placed on Tribunals decisions in CCE, Jalandhar vs. JCT Ltd. reported in 2013 (296) E.L.T. 426 (Tri. Del.) which followed the decision of Honble Madhya Pradesh High Court in the case of STI Ltd. vs. CCE, Indore reported in 2009 (236) E.L.T. 248 (M.P.), in Deepak Spinners Ltd. vs. CCE, Indore reported in 2014 (302) E.L.T. 132 (Tri. Del.), CCE, Pune II vs. Patodia Syntex Ltd. reported in 2016 TIOL 933 CESTAT MUM and Elcomponics Sales Pvt. Ltd. vs. CCE, Noida reported in 2012 (279) E.L.T. 280 (Tri. Del.).
4. The learned AR contended that the appeal is without merit. Regarding the claim of the appellant for refund under Rule 5, he submitted that accumulated credit of duty on inputs is available only on account of export of final products under bond. In the present case the export was under claim for rebate on the final product and, hence, the claim is not covered by Rule 5. Further he also submitted that AED [T&TA] was exempted both on inputs and final products only w.e.f. 09/7/204. Prior to that date there is no bar in utilizing the AED on input for payment of AED on final products. The learned AR strongly contested the appellants claim regarding time bar. He submitted that the claim has to be dealt with in terms of Section 11B and the time limit though not specifically mentioned for the claims under Rule 5, the ratio laid down by the Honble Madras High Court in CCE, Coimbatore vs. GTN Engineering (India) Ltd. reported in 2012 (281) E.L.T. 185 (Mad.) has to be followed. The claim in the present case is squarely hit by the time limit.
5. Heard both the sides and examined the appeal records. The admitted facts of the case are that the appellants were availing Cenvat credit on AED [T&TA] paid on inputs which are used in the manufacture of final products which also had duty liability under the head AED [T&TA]. However, w.e.f. 09/7/2004 both inputs and final products were exempted from payment of AED [T&TA]. It is also an admitted fact that the appellants were exporting the final products. Initially they have exported under claim for rebate. The said rebate claims were subjected to proceedings. Originally rejected by the Assistant Commissioner rebate claims were allowed by the Commissioner (Appeals) later disallowed on revision by the Government. Later the appellants filed writ-petition which was dismissed as withdrawn in Honble Rajasthan High Court. Thereafter, they took re-credit of originally debited amounts which were claimed as rebate amounts. The AED portion of such amount in credit is Rs. 22,54,910/-. On the date of exemption (08/7/2004), the appellants had a credit balance of Rs. 26,85,740/-. After utilizing a part of the amount for discharging the liable AED [T&TA] [for clearances prior to 08/7/2004], they filed the present refund claim for the remaining amount.
6. The first point for decision is the eligibility of the appellant for refund of AED [T&TA] lying in their Cenvat account from the date of exemption notification. The Board vide letter dated 22/3/2007 clarified as below :-
2. The issue has been examined, it is seen that in terms of the Cenvat Credit Rules, 2002, and the subsequent rules notified in 2004, Cenvat credit of specified duty paid on inputs is admissible provided they are used in the manufacture of excisable goods other than exempted goods. Exempted goods are defined as goods which are exempted from the whole of duty of excise leviable thereon and include goods which are chargeable to Nil rate of duty. Consequently, the credit of duty paid on inputs is inadmissible only when the final product is exempted from duty of excise leviable thereon under Section 3 of the Central Excise Act, 1944. If the final product is not chargeable to AED, it cannot be said that the final product is exempted from basic excise duty. Further, the condition relating to the restriction on the utilization of such credit lays down that the credit taken of AED [T&TA] can be utilized only for the payment of AED [T&TA]. It is, therefore, observed that as per Rule 3 of the said rules, Cenvat credit of AED [T&TA] can be taken even though the manner of utilization of such credit is restricted in terms of sub-rule (7). Therefore, such unutilized accumulated credit of AED [T&TA] can be claimed as refund under Rule 5 of the Cenvat Credit Rules, 2004 on export of goods. Accordingly, it is clarified that clarification issued for the refund of AED (GSI) under Rule 5 of the Cenvat Credit Rules, 2002 vide Boards Circular No. 701/17/2003-CX. dated 12/3/2003, will be applicable to AED [T&TA] subject to the conditions and limitations as prescribed under the said rules.
7. That the appellants exported finished goods and accumulated AED [T&TA] in their credit account has not been disputed. The AED [T&TA] was exempt both for inputs and final products with effect from the same day. Keeping in view the scope of Boards clarification, as above and other decided cases relied upon by the appellant, I find that the Assessees eligibility for refund under Rule 5 cannot be disputed. A point was made by the Revenue that for a claim under Rule 5 the export should have happened under bond. In the present case though initially the export was made under rebate after debiting the Cenvat account, the said debit was restored after the sequence of litigation as narrated above. Further, the availability of unutilized credit in the books of the appellant has not been disputed by the Revenue. Considering that the accumulated credit could not be utilized in view of the exports by the appellant, the claim merits considering as explained by the Boards Circular (supra).
8. The second point for decision is the applicability of time limit for the claim under Rule 5. Both appellants and the Revenue relied on decided cases of this Tribunal and High Courts to reiterate the applicability or non-applicability of time limit prescribed under Section 11B for the claim made under Rule 5. The admitted fact is that the relevant date as defined under Section 11B does not cover the scope of the claim under Rule 5. It is by interpretation and reading together the various provisions the decisions were arrived in the case laws relied upon by both Revenue and the appellant.
9. The facts of the present case are to be examined first to apply the ratio of decided cases. The appellant originally claimed rebate which was rejected and after the withdrawal of writ-petition filed in Honble High Court of Rajasthan, the appellant re-credited the debited account in their Cenvat account. This has been approved by the Jurisdictional Assistant Commissioner. Out of such re-credits an amount of Rs. 22,54,910/- relates to AED [T&TA]. The re-credit was taken in November 2010 and intimated to the Department the same was approved, ex-post facto, by the Jurisdictional officer on 12/5/2011. Refund of AED [T&TA] amounting to Rs. 22,54,910/- could be claimed as a refund only because of such re-credit. Without such re-credit the said amount cannot become part of the present claim under Rule 5. Considering the above factual position and sequence of events leading to the present claim, I find that the amount of Rs. 22,54,910/- taken credit in November 2010 the books resulting in their eligibility to claim for which the claim is filed on 18/5/2011 cannot be considered as hit by time bar. The said claim is within one year, which is a general time limit, from the date of credit. The consideration that the claim should have been filed within one year of export is not applicable to the present case as the amount was claimed as rebate initially well within time. Regarding the remaining amount of the claim for which also the present refund claim relates, it is seen that the claim filed on 18/5/2011 cannot be extended to cover a credit available in the books of appellant on 09/7/2004. Even if it is considered that no specific time limit is prescribed for refund claim under Rule 5 in terms of Section 11B, the present claim for this amount after a period of more than six years cannot be covered even applying the provisions of General Clauses Act, 1897.
10. Considering the above discussion and analysis, I find that the appellant is, in principle, eligible for refund of AED [T&TA] under Rule 5 of Cenvat Credit Rules, 2004. However, considering the facts of the case and the applicability of time limit for such claim, as discussed above, the claim shall be restricted to the AED [T&TA] re-entered in the Cenvat credit account by the appellant in November 2010 and falling under the eligibility under Rule 5. As such the matter has to go back to the Original Authority to examine and quantify the eligible amount of refund in terms of above finding. The appellant shall file all the required details and documents in support of the claim including correct quantification of eligible amount. The appeal is disposed of in the above terms.
(Order pronounced in the open court on 02/06/2016.) (B. Ravichandran) Member (Technical) PK ??
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