Custom, Excise & Service Tax Tribunal
M/S. Indira Gandhi Mahila Sahakari Soot ... vs Commissioner Of C. Ex. Pune-Ii on 18 October, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/723/2004-Mum. (Arising out of Order-in-appeal No.PII/BKS/299/2003 dated 14/10/2003 passed by the Commissioner (Appeals) Central Excise & Customs, Pune-II) For approval and signature: Honble Mr. S.S. Kang, Member (Judicial) Honble Mr. Sahab Singh, Member (Technical) ============================================================
1. Whether Press Reporters may be allowed to see : No
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 : Yes
CESTAT (Procedure) Rules, 1982 for publication
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3. Whether Their Lordships wish to see the fair copy : Seen
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authorities?
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M/s. Indira Gandhi Mahila Sahakari Soot Girni Ltd.
:
Appellant
Vs.
Commissioner of C. Ex. Pune-II
Respondent
Appearance:
Shri V.B. Gaikwad, Advocate for appellant
Shri Navneet, Addl. Commr.(A.R.) for respondent
CORAM:
Mr. S.S. Kang, Member (Judicial)
Mr. Sahab Singh , Member (Technical)
Date of hearing : 18/10/2011
Date of pronouncement : 2011
ORDER NO.
Per : Sahab Singh
This is an appeal filed by M/s. Indira Gandhi Mahila Sahakari Soot Girni Ltd. against the order-in-appeal No. P-II/BKS/299/2003 dated 14.10.2003 (hereinafter referred to as the appellant). Prior to 27.6.2000, the appellants were working as DTA unit and were manufacturing the cotton yarn falling under Chapter 52 of the Central Excise Tariff Act, and they were also availing the MODVAT credit on inputs/capital goods provided under Rule 57A of the Central Excise Rules 1944. While working as DTA unit they were disallowed the MODVAT credit amounting to Rs.10,79,568/- by Additional Commissioner/Assistant Commissioners vide three different order-in-originals. The appellant filed the appeal against the said order-in-originals before the Commissioner of Central Excise (Appeals), who vide three order-in-appeals dt. 17.10.2000, 16.11.2000 and 27.7.2001 allowed the appeal of the appellants. In between on 27.6.2000 appellants converted their unit into a 100% EOU after taking due approvals from the competent authority. After their appeals were admitted by the Commissioner (Appeals) they filed three refund claims for Rs.6,60,137/, Rs.4,01,098/- and Rs.18,333/- for the MODVAT credit availed by them. The total amount of refund claims was Rs.10,79,568/- ( that is the amount disallowed by the original authorities). These refund claims have been rejected by the adjudicating authority on the ground that during the period between the decision of the Additional Commissioner and the Commissioner (Appeals) the appellants had converted their factory into a 100% EOU and provisions of Rule 57AB of the Central Excise Rules, were not applicable to 100% EOU and were not eligible for taking re-credit as per Boards Circular No. 77/99-Cus dated 18.11.1999. Against these orders of rejection the appellant filed in appeal before the Commissioner (Appeals) who vide the impugned order has rejected their appeal. Hence, this appeal.
2. The learned Advocate appearing for the appellant submitted that if at the time when their appeal is allowed by the Commissioner (Appeals), the assessee is not in a position to take the credit on account of conversion into 100% EOU, they should be allowed the cash refund of the amount involved in these claims. He submitted that in view of the Tribunal decision in case of GMI Super Sales Agencies Vs. CCE 2003 (50) RLT 715 they should be given the refund. He also contended that at the time of first appeal before the Commissioner (Appeals) they have debited the amount as a pre-deposit in the MODVAT account pending decision in the appeals. Hence relying on the Boards Circular No. 77/99 rejecting their claim by Commissioner (Appeals) is totally unjust and unwarranted. He also relied in the decision of Tribunal in the case of Sun Pharmaceuticals Indus. Ltd. Vs. Commr. of C. Ex., Pondicherry reported in 2010 (251) E.L.T. 312 (Tri.-Chennai) in support of his claim. He therefore requested the order passed by Commissioner (Appeals) be set aside.
3. The Additional Commissioner (A.R.) appearing for the Revenue submitted copy of the Circular No. 77/99-Cus. dt. 18.11.1999 and also the Circular No. 799/32/2004 dt. 23.9.2004 and submitted that the Commissioner (Appeals) has rightly rejected their appeal. Since after the conversion of their unit as 100% EOU they are not entitled for any credit and credit if any lying in their account is liable to lapse. He submitted that partys appeal is liable to be dismissed.
4. Heard both sides. This is a fact that the appellants have converted themselves into a 100% EOU on 27.6.2000. Prior to this date they were working as DTA and availing the MODVAT credit on inputs and capital goods. They were disallowed MODVAT credit by lower authorities against which they went to the Commissioner (Appeals) who decide the appeal in their favour. The appellant are seeking the refund of that credit, which was allowed by the Commissioner (Appeals) in their appeal. The appellant have also contended that they have debited the MODVAT account as a pre-deposit to fulfill the provisions of Section 35F of the Central Excise Act. We find that after conversion into a 100% EOU, the appellants are not entitled to the MODVAT Scheme, in view of Rule 100H of the Central Excise Rules 1944, which was existing at that time. We also find that CBEC Circular No. 77/99 is very clear in this regard and MODVAT credit if any lying in the balance of a DTA unit is liable to lapse after conversion into a 100% EOU. Even the partys contention that the amount was pre-deposit by way of debit in the MODVAT account will not sustain as if refund is allowed by way of credit in that account it is liable to lapse on conversion of the DTA units to 100% EOU. Therefore, in such a situation refund of the MODVAT credit is not permissible to the appellant.
5. The case cited by the appellants in case of GMI Super Sales Agencies was clearly distinguished by the Commissioner (Appeals) holding that in the cited case the issue involved was discontinuation of maintaining RG23A whereas the present appeal, the MODVAT Scheme is inapplicable to the appellant. Similarly, the appellant do not get any support from the case of Sun Pharmaceuticals Indus. Ltd.(supra) as in this case the period involved was after the rescinding of Central Excise Rules 1944 under which Rule 100H made the provisions of MODVAT Rules inapplicable to the 100% EOU. In the appellants case the Rule 100H were very much in force during the relevant period which debars and 100% EOU to take the credit. Therefore, the ratio of this decision will not be applicable to the appellants case.
6. In view of the above, the appeal is dismissed.
(Pronounced in Court on ) (S.S. Kang) Member (Judicial) (Sahab Singh) Member (Technical) Sm ??
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