Customs, Excise and Gold Tribunal - Delhi
Om Prakash Jayaprakash And Co. vs Cce on 6 July, 2004
Equivalent citations: 2004(95)ECC361, 2004(178)ELT429(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in these two appeals, filed by M/s. Om Prakash Jayaprakash & Co., relates to rejection of refund claims filed by them.
2. Shri Naveen Mullick, learned Advocate, submitted that the appellants manufacture processed man-made fabrics and availed Modvat Credit of the duty paid on inputs; that under Notification No. 29/96-CE dated 3.6.96, the eligibility of the deemed credit was prescribed for the inputs used in the manufacture of their final products; that they had filed two claims for refund of deemed Modvat Credit remained in balance in their deemed credit register during the course of export under bond for the period from April, 1998 to June, 1998 and remained unutilised towards payment of Central Excise duty on their specified final products cleared for home consumption; that the Assistant Commissioner has rejected both the refund claims and on appeal, the Commissioner (Appeals) also, under the impugned order, has rejected their appeals, holding that the appellants could have utilised the amount of which refund has been sought by them towards payment of duty on goods cleared for home consumption. The learned Advocate, further, submitted that these refund claims have been filed under Rule 57F of the Central Excise Rules; that they had met all the conditions and limitations as set out in Notification No. 85/87-CE dated 1.3.87 for the purpose of availing the refund; that under Section 11B of the Central Excise Act/any person claiming refund of Central Excise duty, is required to make an application before the expiry of six months from the relevant date; that under Explanation (B) to Section 11B, the relevant date in the case of goods exported out of India by sea or Air, is the date on which the ship or the aircraft leaves India; that the first refund claim was filed 5y them on 13.1.99 in respect of the goods exported during the period from April, 1998 to June, 1998 and as such was well within time; that the second refund claim was filed in the month of February; 1999 in respect of the goods exported in the month on July, 1998. He, finally, mentioned that the Commissioner (Appeals), Surat, vide Order-in-Appeal No. SSS/SRT/1857-1897/99 dated 22.10.99, has allowed appeals in the identical facts and circumstances. He, therefore, requested that refund claim, filed by them, may also be sanctioned to them. He also relied upon the decision in the case of CCE, Chennai v. Indian Organic Chemicals Ltd.; 2001 (138) ELT 209 (T) wherein it has been held that the refund of excise paid on inputs used in the manufacture of final product, eventually exported, cannot be denied.
3. Countering the arguments, Shri D.N. Choudhary, learned SDR reiterated the findings as contained in the impugned order.
4. We have considered the submissions of both the sides. Notification No. 29/96-CE (NT) dated 3.9.96 was issued in exercise of the powers confirred by Sub-rule (2) of Rule 57A of the Central Excise, Rules, 1944. This Notification allowed the credit of declared duty in respect of the inputs specified in the notification and the credit so allowed shall be utilised only towards payment of duty of excise leviable under the Central Excise Act on the specified final products. However, Proviso to paragraph 3 of the Notification provides that where, for any reason, that the credit of duty in respect of inputs used in the final products cleared for export under bond cannot be used towards payment of duty of excise on any final product cleared for home consumption or for export on payment of duty, the said credit shall be refunded to the manufacturer subject to such safeguards, conditions and limitations as may be specified by the Central Government in the official gazette. We observe that the Assistant Commissioner, under the adjudication orders, had rejected the refund claim filed by the appellants on various grounds including the ground that they could have utilised the balances in credit account during the quarter towards payment of duty for home clearances. The Adjudicating authority had also given finding that certain procedural requirements were also not complied with by the appellants. The Commissioner (Appeals), however, has held that non-fulfilment of procedural requirement cannot result in denial of the substantive benefit of refund confirmed under Rule 57F of the Rules. No appeal seems to have been preferred against this finding of the Commissioner (Appeals) in the impugned order. Thus, the refund of the Modvat Credit, accummulated in their accounts, is not deniable to the appellants for non-observance of certain procedural aspects. The Commissioner (Appeals) has rejected their appeals only on the sole ground that "there was ample period for the appellants to utilise the credit towards clearances for home consumption as provided under the law" as the two claims pertain to the period from April, 1998 to June, 1998 and the Compounded Levy Scheme was introduced only w.e.f. 16.12.1998 i.e. well after about six months. We do not find ourselves in agreement with this finding of the Commissioner (Appeals). The mere fact that the appellants have the deemed credit accommulated in their accounts, goes to show that they were not in a position to utilise the same towards payment of duty on their specified final products. It is not disputed by the Revenue that the goods have been exported by the appellants and the inputs were utilised in the manufacture of goods so exported. It is also not in dispute that the amount of Modvat Credit, of which refund has been sought, was lying unutilised in their books of accounts: No evidence has also been brought on record to show that the amount of Modvat Credit does not relate to the inputs used in the manufacture of goods exported out of India. In view of these facts and circumstances, the refund cannot be denied to them merely on the ground that the appellants could have utilised the same during the period the credit was in their account. Accordingly, we set aside the impugned order and allow both the appeals.