Custom, Excise & Service Tax Tribunal
Cce, Indore vs M/S. Agarwal Indotex Ltd on 29 December, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Appeal No.2569 of 2007-SM Branch
& E/CO/15/08-SM
[Arising out of Order-in-Appeal No.IND-I/130/2007 dated 28.06.2007 of the Commissioner of Central Excise (Appeals-I), Indore (M.P.)]
Date of Hearing/ Decision:29.12.2009
For approval and signature:
Mr. M. Veeraiyan, Member (Technical)
,, ,
1. Whether Press Reporters may be allowed to see
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?
CCE, Indore Appellants
(Rep. by Shri Anil Khanna, SDR)
Vs.
M/s. Agarwal Indotex Ltd. Respondent
(Request on merits) CORAM: Honble Mr. M. Veeraiyan, Member (Technical) Order No/Dated:29.12.2009 Per M. Veeraiyan:
The Appeal is against the order of the Commissioner (Appeals) No.IND-I/130/2007 dated 28.06.2007. Cross objection No.15 of 2008 is connected to this appeal.
2. Heard ld. SDR for the Department. None appears for the respondent. However, there is a communication dated 31.08.2009 seeking decision on merits.
3. The relevant facts, in brief, are that the respondents are manufacturer of Polyester Yarn and Viscose Yarn. They procured the Polyester Staple Fibre and Viscose Staple Fibre without payment of duty in terms of Notification No.43 of 2001 (NT) dated 26.06.2001. The respondents have procured 1,94,703.70 Kgs. + 98,348.90 Kgs. of the above inputs without payment of duty. The respondents have shown consumption of raw materials slightly in excess of raw materials as per SION norms (Standard Input-Output Norms). The respondents were directed to pay an amount of Rs.96,509/- on the ground that the quantum of raw materials procured by them was not corresponding to SION norms. After paying the duty, the party filed refund claim, which has been rejected on the ground that the claimants have neither followed any procedure nor have fulfilled the conditions stipulated under the said Notification. The Commissioner (Appeals) allowed the appeal of the party with the following findings:-
5. On a careful consideration of the submissions made by the Appellant and on examination of the documents submitted by them, I find that as rightly pointed out by them this is not a case of refund of Cenvat Credit or rebate of excise duty (input stage rebate) but a case of refund of duty paid by mistake. In so far as the export of goods is concerned not doubt the Appellant had procured duty free material but (under Notification No.43/2001) and it appears based on the input out norms/ratio, the department came to the conclusion that the Appellant had used certain excess quantity of raw material in the production of goods exported by them (The Appellant had also taken Cenvat Credit of the duty paid by them on such inputs purchased by them). Even after the Appellant took a stand before the authorities that there is no bar to use such duty paid goods along with duty free input for production and export of goods, the departmental officers on a wrong interpretation have forced the Appellant to pay the excise duty involved on the quantity of duty paid Polyester Fibre & Viscose Fibre used in the production of exported goods as if such usage is not permissible and that the Appellant have to pay the excise duty on such excess goods (even though they are in nature of duty paid goods procured by Appellant) used in production of export goods. At least when the Appellant applied for refund the department/Adjudicating Authority should have been courteous enough to examine the matter carefully and should have allowed the claim but the learned Adjudicating Authority had rejected the claim on the ground that the Appellant have neither followed any procedure nor have fulfilled the conditions under the said Notification (Notification under Rule 18 of the Central Excise Rules, 2002). It is crystal clear from the material available on record that what was claimed as refund was not a refund on account of export of goods (input stage rebate) or refund claimed under Cenvat Credit Rules, but a refund of excise duty paid unnecessarily due to insistence of the officers based on a wrong interpretation of the matter. Under the circumstances, I have no hesitation in holding that the rejection of the claim vide the impugned order is absolutely wrong and I hold that they are very much eligible to the refund of duty claimed by them.
4. Ld. SDR reiterated the grounds of appeal.
5. I have carefully considered the submissions and perused the records. At the outset, it is to be noted that SION norms are based on average consumption in the industry. The actual consumption by any manufacturer could be more or less. If the variation is very wide then it definitely calls for investigation. However, no presumption can be made that excess raw materials have been used merely because the quantity is in excess of SION norms. In the present case, certain presumptions have been made that the raw materials procured is in excess of the requirement merely based on SION norms. The respondents have used certain quantities of duty-paid Cenvatable inputs in the manufacture of export products. There is no dispute about export of the final products. The inputs going into export product need not suffer duty. It could be procured duty-free or if it was duty-paid, the same can be taken as Cenvat Credit. The said Cenvat Credit is useable for paying duty on the goods cleared to the domestic market or the same is eligible as refund. Under these circumstances, the order of the Commissioner (Appeals) holding that the refund claim is admissible cannot be faulted.
6. In view of the above, the appeal by the Department is rejected. The cross objection, which is merely in support of the order of the Commissioner (Appeals) is also disposed of.
Order dictated & pronounced in open court on 29.12.2009.
( M. Veeraiyan ) Member (Technical) Ckp.