Custom, Excise & Service Tax Tribunal
Gujarat Ambuja Exports Ltd vs C.C.E., Indore on 1 April, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-DB
COURT III
Excise Appeal No.E/3238/2007-EX [DB]
[Arising out of Order-in-Appeal No.IND-I/177/2007 dated 26.09.2007 passed by the Commissioner (Appeals), Customs & Central Excise, Indore]
For approval and signature:
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. R.K. SINGH, 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 should 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 Departmental authorities?
Gujarat Ambuja Exports Ltd. Appellant
Vs.
C.C.E., Indore Respondent
Present for the Appellant : Mr.Manish Saharan, Advocate
Present for the Respondent: Mr. R.K. Mishra, D.R.
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. R.K. SINGH, MEMBER (TECHNICAL)
Date of Hearing/Decision: 01.04.2016
FINAL ORDER NO. 52996/2016
PER: S.K. MOHANTY
Brief facts of the case are that the appellant is a manufacturer - exporter of Soyabean De-oiled cakes and Soya Floor, which are exempted from payment of Central Excise duty. During the disputed period, the appellant had filed the refund applications in terms of Rule 5 of the Cenvat Credit Rules, 2004, claiming refund of service tax paid on the input services for the period of 01.04.2005 to 30.09.2006, which were used for manufacture and export of final products. The refund applications were rejected in the adjudication order dated 31.03.2007 on the ground that the appellant had not exported the goods under LUT or bond; that the final product being exempted from payment of Central Excise duty, Cenvat credit was not available on the inputs and input services used in such exempted goods under Rule 6 of the Cenvat rules; that since taking of cenvat credit of service tax paid on the disputed services was outside the purview of Cenvat statute, there was no question of its utilization, and thus, even if the final product was exported, refund was not permissible under Rule 5 of the rules. Appeal filed against the adjudication order was dismissed by the Ld. Commissioner (Appeals) vide the impugned order dated 26.09.2007. Hence, the present appeal before this Tribunal.
2. Shri Manish Saharan, the ld. Advocate appearing for the appellant submitted that execution of Bond/LUT is only a procedural requirement and since the goods manufactured by the appellant were exempted from payment of duty, there was no occasion for such execution. In this context, the ld. Advocate has relied on the decision of this Tribunal in the case of Jolly Board Ltd. -Vs. - CCE, Aurangabad, reported in 2015 (321) ELT 502 (Tri. - Mumbai). The ld. Advocate further submitted that the embargo created in sub-rule (1) of Rule 6 ibid is not application to export goods in terms of Rule 6(6)(v) ibid , and thus, refund of service tax paid on the input service is available to the appellant as per Rule 5, even if the final product is exempted. To support his such stand, the ld. Advocate has relied on the judgment of Hon'ble Himachal Pradesh High Court, in the case of CCE - Vs. - Drish Shoes Ltd., reported in 2010 (254) ELT 417 (H.P.).
3. Shri R.K. Mishra, the ld. DR for Revenue, on the other hand, reiterated the findings recorded in the impugned order.
4. We have heard the ld. counsel for both sides and examined the case records.
5. We find that the issue involved in this case is squarely covered by the judgment of Hon'ble Himachal Pradesh High Court in the case of Drish Shoes Ltd. (supra). The questions framed by the Revenue in appeal, were answered by the Hon'ble Court affirmatively in favour of the assessee. The relevant paragraphs in the said judgment are extracted herein below:-
20.In view of the above discussion, we hold that an assessee, manufacturing goods chargeable to nil duty, is eligible to avail CENVAT credit paid on the inputs under the exception clause to Rule 6(1), as contained in Rule 6(5) of CENVAT Credit Rules, 2002 and Rule 6(6) of CENVAT Credit Rules, 2004, used in the manufacture of such goods, if the goods are exported. Question No. 1 is answered accordingly.
21.As regards? question No. 2, it is clear from a bare reading of Rule 5 of CENVAT Credit Rules, 2004 that a manufacturer, who exports the final products which are exempt from duty, can claim refund of CENVAT. So, this question is also answered against the appellant.
6. With regard to execution of Bond/LUT under the Central Excise Rules, 2002, We find that the Tribunal in the case of Jolly Board Ltd. (supra) has held that such non-execution is only a procedural lapse, for which refund benefit cannot be denied. It has further been held that if the goods are exempted, there is no requirement of execution of Bond/LUT.
7. In view of the settled position of law, we are of the view that there is no merit in the impugned order. Therefore, we set aside the same and allow the appeal of the appellant with consequential benefit of refund.
[Dictated and pronounced in the open Court)
(R.K. SINGH) (S.K. MOHANTY)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
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