Custom, Excise & Service Tax Tribunal
Arkay Glenrock (P) Ltd. Unit Ii vs Commissioner Of Central Excise on 30 August, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
CHENNAI
Appeal No.ST/S/40422/13 & ST/40581/13
[Arising out of Order-in-Appeal No.MAD-CEX-000-APP-272-12 DT. 30.11.2012 passed by the Commissioner of Central Excise (Appeals), Madurai]
For approval and signature :
Honble Shri Mathew John, Technical Member
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 the Member wishes to see the fair copy of
the order? :
4. Whether Order is to be circulated to the Departmental authorities ? :
Arkay Glenrock (P) Ltd. Unit II Appellant
Versus
Commissioner of Central Excise
Madurai Respondent
Appearance:
Shri S. Sridhar, Consultant For the Appellant
Shri K.P.Muralidharan, Supdt. (AR) For the Respondent
CORAM :
Honble Shri Mathew John, Technical Member
Date of Hearing :30.8.2013
Date of Decision : 30.8.2013
FINAL ORDER No.40353/2013
1. After hearing both sides for some time, I find that the matter involved is a dispute about refund of an amount of Rs.81,498/- only. Further, this is a matter where in the first round of litigation, the Commissioner (Appeals) has decided the issue on merits against which Revenue has not come in appeal. But when the matter was remanded back for re-quantification, the Revenue has again raised the issue which was decided by Commissioner (Appeals) in the first round. In these circumstances, I find that it is proper to take up both stay application and appeal together and dispose of the same instead of causing further inconvenience to the Appellant. Therefore, after waiving the requirement of predeposit of dues, the appeal itself is taken up for disposal.
2. The facts of the case can in brief are as follows. Appellant is a 100% EOU manufacturing granite slabs. They export their products. They also supply part of their products to other 100% EOU and have hardly any clearances to domestic tariff area.
3. During the period April 2009 to September 2009, they were not able to utilize cenvat credit that they got in their account. So they applied for refund under rule 5 of Cenvat Credit Rules 2004 read with notification 5/06 (NT). In the initial round, the adjudicating authority took a view that clearances by the Appellant to other 100% EOU could not be considered as export and therefore refund has to be restricted by excluding the value of goods supplied to 100% EOU and he sanctioned balance of the refund in the first round. Against this adjudication order No.14/10 dt. 2.8.2010, the Appellant filed appeal with Commissioner (Appeals). Commissioner (Appeals) relied on the decision of the Gujarat High Court in the case of CCE Vs Shilpha Copper Wire Industries and ordered that refund was to be sanctioned considering the supplies made to 100% EOU as exports and the matter was remanded back as per para 7 & 8 of the order which are reproduced below :-
7. The issue has been answered by the Honble High Court of Gujarat at Ahmedabad in the case of Commisioner of Central Excise Vs Shilpa Copper Wire Industries 100% EOU in Tax Appeal No.968/2008 [AIT-2010-145-HC]. The Honble High Court of Gujarat, in the above case had placed reliance upon the decision of the Honble supreme Court in the case of Ginni International Ltd. reported in 2007 (215) ELT A102 (SC) wherein the Apex Court had held that for fixing the percentage of goods that the 100% EOU could sell to DTA, the deemed exports also have to be taken into account and not physical exports alone. Thus the Honble High Court of Gujarat has concluded that clearances made by one 100% EOU to another 100% EOU which are deemed exports are to be treated as physical exports for the purpose of entitling refund of unutilized Cenvat Credit contemplated under the provisions of Rule 5 of the Cenvat Credit Rules, 2004. Since the issue involved in this appal is on the same analogy, the above decision is squarely applicable to this case.
8. Accordingly the following order is passed.
ORDER
The appeal is allowed and the impugned order stands modified to the extend that the differential amount of refund involved in the appeal shall be granted if otherwise found to be eligible.
4. In pursuance of the order, the adjudicating authority processed the refund claim and granted entire amount of refund claimed which was denied in the first adjudication order. Against this order of the adjudicating authority, Revenue filed appeal before Commissioner (Appeals) on the ground that the order of the Commissioner (Appeals) was that the differential amount of refund involved in the appeal shall be granted if otherwise found to be eligible. Revenue relies on the following decisions to argue that Appellants were not eligible for refund :-
a) BAPL Industries Ltd. Vs UOI 0 2007 (211) ELT 23 (Mad.)
b) Tiger Steel Engineering (I) Pvt. Ltd.
2010 (259) ELT 375 (Tri.-Mumbai)
5. The Commissioner (Appeals), in the second round, further relied on the decision of Tricholite Electrical Industries Ltd. Vs CCE Gurgaon - 2012 (282) ELT 468 (Tri.-Del) and allowed the appeal of Revenue holding that refund granted by the adjudicating authority in second round is not legal and proper and is to be recalled.
6. Arguing for the Appellant, Ld. Counsel submits that it was precisely the issue which is now decided against the Appellant which was decided by the Commissioner (Appeals) in the first round of litigation and that order had attained finality inasmuch as no appeal was filed by either side against that decision. The matter was remanded only for quantification of the amount as per the terms and conditions of the rule 5 of Cenvat Credit Rules 2004 and notification 5/06-CE (NT). The issue now being agitated had reached finality and it could not be re-agitated in the second round of litigation. Further, he argues that on the merits of the issue, Hon. Gujarat High Court has already given a decision holding that the goods supplied to 100% EOU is to be treated as export. Further, in the light of observation of Gujarat High Court in the case of Essar Steels Ltd. Vs UOI 2010 (249) ELT 3 (Guj.) that aspects of rebate, refund etc. of goods and services intended to be given should not be denied. The relevant para-41.2.9 of the order is reproduced below :-
41.2.9?Rule 27 permits a Unit or Developer to import or procure from the Domestic Tariff Area all types of goods, without payment of duty or procure from the Domestic Tariff Area such goods after availing export entitlements. This means that the export entitlements available on account of the export of goods from the Domestic Tariff Area to the Special Economic Zone are available either to the Domestic Tariff Area supplier or the Special Economic Zone Unit/Developer at their option. Therefore, duty drawback or DEPB and/or other export benefits would be available to either party at their option. The sweeping exemption granted under this provision renders the contention of the Department regarding liability of the goods to levy of Export Duty, academic since this provision exempts the goods brought in by the Special Economic Zone Unit from all levies and duties. Since the duty is leviable on the goods, it would be irrational to contend that the export from the Domestic Tariff Area to the Special Economic Zone should be taxed while the inward movement of the goods from the Domestic Tariff Area to the Special Economic Zone, would be exempt.
7. Arguing for Revenue the Ld A. R. argues that the order of the Commissioner (Appeal) was to examine whether the appellant was eligible for the refund. In argues that in view of the decisions cited the appellants were not eligible for the disputed portion of the refund.
8. I have considered the submissions on both sides. I find that the impugned order is not maintainable because the issue which has attained finality is being re-agitated without filing an appeal against order-in-appeal No.87/2011 dt. 18.12.2011 of the Commissioner (Appeals). On merits of the issue also, I am of the view that decision of Hon. Gujarat High Court prevails over the decision of Tribunal in the case of Tiger Steels Engineering (I) Pvt. Ltd., which order is stayed by the Hon.Bombay High Court. I also note that the decision of the Hon.Madras High Court in the case of BAPL Industries Ltd. was with reference to benefits granted under the EXIM Policy specifically for physical export of goods. In the case of rebate and refunds on exports the policy of the government has been to grant such benefits when goods are supplied to SEZ. The same logic should apply for supply to EOUs also.
9. For reasons stated above, therefore, the appeal is allowed with consequential relief. Both the stay petition and appeal are allowed.
(Dictated and pronounced in open court) (MATHEW JOHN) TECHNICAL MEMBER gs 2