Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Weston Electronics Ltd. on 10 February, 1997
Equivalent citations: 1997ECR199(TRI.-DELHI), 1997(93)ELT189(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. The captioned two appeals have been filed by the Revenue against the order of the ld. Collector (Appeals) who had allowed the refund claim amounting to Rs. 3,69,780/- in one case and Rs. 16,43,091.01 in the other case. As the same issue is involved in the two appeals, they are being disposed of by this common order.
2. The respondents herein are engaged in the manufacture of Fly-Back Transformers. They were clearing these transformers partly for home consumption and partly for export. Their claims for refund were preferred by the respondents on the basis of the duty paid on the inputs used in the manufacture of the export product. The department alleged that the appellants were entitled to sanction of the refund only to the extent of the difference of duty on the amount available in RG 23A Part II minus the amount of duty on the inputs available in stock with the respondents herein and therefore, the lower authorities held that the entire claim preferred by the respondents herein was not admissible but was admissible to the extent as stated above.
3. Shri V. Sridharan, the ld. Advocate appearing for the respondents submits that the respondents used the credit available in RG 23A Part II for the purpose of paying duty on goods cleared for home consumption and thus the total credit available in RG 23A Part II does not correctly represent the total duty involved on the inputs at any point of time available in stock or in the pipeline. He submits that the respondents had calculated the total duty paid on inputs used in a unit of the export product and on that basis they had calculated the total amount of refund admissible to them under provisions of Rule 57F(3). He submits that the Assistant Collector had not appreciated the problem correctly inasmuch as he allowed the refund only of the amount of difference of duty available in RG 23A Part II - the amount of duty involved on the stock of inputs available at the end of the period. He submits that the Assistant Collector incorrectly interpreted the provisions of Rule 57F(3) and that interpreted the Collector (Appeals) had correctly interpreted the Rule and has allowed their claims. He submits that the appellant in the instant case has not explained as to how the amount of refund calculated by the Assistant Collector was correct. He therefore, prays that the order of the ld. Collector (Appeals) may be upheld.
4. Shri Jangir Singh, ld. DR appearing for the appellant submits that the refund of credit in cash is to be allowed only under the circumstance wherefor any reason such adjustment is not possible that is where the credit cannot be utilised towards payment of duty on similar products cleared for home con-sumption. Ld. DR also submits that the benefit in the last resort cannot exceed the benefit permissible in the normal course. He therefore, submits that the refund in cash of credit taken on inputs used in the manufacture of final products that are exported and in respect of which drawback has not been availed of cannot exceed the amount of duty leviable on the final product that would have been paid. Had the final product been cleared from the factory on payment of duty for home consumption or for export under claim for rebate, he therefore, submits that the order of the ld. Collector (Appeals) was erroneous and prays that the same may be set aside.
5. We have heard the submissions of both sides. We find that the respondents herein have claimed refund on the basis of duty paid on inputs used in the manufacture of unit quantity of the final product. We also observe that for purpose of refund of credit taken on inputs the duty payable on final product is not a relevant factor. There may be cases where the duty on the inputs may be higher than the duty payable on the final product. The Govt. of India has specifically provided that in case of export products if there is a credit of inputs duty available, the same can be refunded in cash to the exporter. Now the refund is relatable only to the duty paid on inputs and not equal to the duty that would have been paid on the final product. Thus the contention of the department is not correct in assuming that only that amount of credit of duty of inputs shall be refunded which is equivalent to the duty payable on the final product. In the instant case, we find that the department had conducted investigations after receipt of the refund claim of the respondents herein. There is no dispute that the duty calculated by the respondents herein on unit quantity of the export product is wrong nor there is any finding in the order of the Assistant Collector that the calculation submitted by the respondents in respect of the duty involved on the inputs used in the unit quantity of the export product is wrong. We hold that the duty has been correctly calculated. Since the refund according to Rule 57F(3) is relatable only to the credit of duty taken on inputs, we do not see any legal infirmity in the order passed by the ld. Collector (Appeals). In this view of the matter, we uphold the order and reject the appeals.