Custom, Excise & Service Tax Tribunal
Vigirom Chem Pvt. Ltd vs Commissioner Of Central Excise, ... on 13 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/28549/2013-SM [Arising out of Order-in-Appeal No. 484/2013 dated 16/09/2013 passed by the Commissioner of Central Excise, Bangalore-I (Appeals) ] Vigirom Chem Pvt. Ltd. No. 55-A-3, Sakalvara Village, 17th KM, Bannerghatta Road Bangalore 560 083 Karnataka Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I Post Box No. 5400, CR Buildings, Bangalore - 560 001 Karnataka Respondent(s)
Appearance:
Shri H. Y. Raju, Advocate #185, 'Brahmi', 'G' Cross, 3rd Block Extension, Nagarbhavi 2nd Stage, Bangalore - 72 Karnataka For the Appellant Smt Ezhil Mathi, AR For the Respondent Date of Hearing: 13/12/2016 Date of Decision: 13/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21399 / 2016 Per: S.S GARG The present appeal is directed against the Order dated 16.09.2013 passed by the Commissioner (Appeals) vide which the Commissioner (Appeals) has rejected the appeal of the appellant and confirmed the Order-in-Original. Briefly the facts of the case are that the appellant is engaged in the manufacture of Industrial Fragrances, Aromatic Chemicals and Odoriferous Mixtures falling under Chapter 29 & 33 of CETA, 1985. During the period from May 2010 to February 2011, the appellant imported Aromatic Chemicals and the duty paid by the appellant amounting to Rs. 1,19,001/- (Rupees One Lakh Nineteen Thousand and One only) was taken as credit. The imported goods were repacked in smaller quantities and after the completion of the manufacturing process, the goods were cleared to EOU and SEZ during the months of May-June 2010 and March 2011. As the appellant was unable to utilize the cenvat credit accumulated in the cenvat account, therefore the appellant filed refund under Rule 5 of the Cenvat Credit Rules 2004 read with Notification No. 5/2006 dated 14.03.2006. Thereafter a show-cause notice was issued to the appellant proposing to deny the refund of cenvat credit on the ground that the appellant does not fulfill the conditions of the Notification 5/2006 and the appellant is in a position to utilize the same for payment of duty with regard to their clearances to DTA. The Assistant Commissioner vide order dated 08.03.2012 rejected the refund. Aggrieved by the said order, appellant filed an appeal before the Commissioner who also rejected the appeal of the appellant and hence the present appeal.
2. Heard both the parties and perused the records.
3. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed mechanically without appreciating the facts and the provisions of Rule 5 of Cenvat Credit Rules 2004. He further submitted that the appellant is not in a position to make use of the cenvat credit because his export turn over is very negligible and therefore if he does not file the refund claim his claim may be time-barred under Rule 5 of Cenvat Credit Rules, 2004. He further submitted that the Rule 5 relating to refund of cenvat credit on account of their non-utilization for exported goods/goods cleared to EOU or SEZ is a beneficiary piece of legislation and the same cannot be denied being substantial right of the assessee. He also submitted that Rule 5 is very clear and it provides for refund of accumulated cenvat credit if the same cannot be adjusted for any reason and the Department has no jurisdiction to find out the reason for such non-adjustment or non utilization. In support of his submission, he relied upon the following authorities:
a) Navbharat Industries Vs. CCE, Thane-I reported in 2006 (199) E.L.T. 148 (Tri.-Mumbai)
b) IDOL Textiles Ltd. Vs. CCE, Thane-I reported in 2007 (217) E.L.T. 299 (Tri.-Mumbai)
c) Super Spinning Mills Ltd. Vs. CCE, Coimbatore reported in 2009 (247) E.L.T. 805 (Tri.-Chennai)
4. On the other hand the learned AR defended the impugned order and submitted that in the impugned order, the learned Commissioner (Appeals) has observed that the appellant is in a position to use accrued credit for payment of central excise duty as the export sale is very negligible when compared to total sale.
5. After considering the submissions of both the parties and perusal of the records, I find that the issue involved in the present case was considered by the Division Bench of this Tribunal in the case of Navbharat Industries cited supra, wherein in para 6 the Tribunal has observed as under:
6. We agree with the ld. Advocate appearing for the appellant that the provisions of Rule 5 relating to refund of Modvat credit accumulated in the records on account of their non-utilisation for the exported goods is a beneficiary piece of legislation, the refund arising on account of the same cannot be denied being a substantive right of the citizen. The wording of Rule 5 read with Rule 3 are very clear providing for refund of accumulated Modvat credit if the same cannot be adjusted for any reason. As such the only condition in the said Rule is non-utilisation of the credit and no-jurisdiction vests in the Central Excise officer to find out the reason for such non-adjustment. The use of the expression that where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount is an unlimited expression and cannot be narrowed or curtailed down by the departmental authorities.
6. In view of the Division Bench decision cited supra, it has been followed by the Single Member Bench in the case of Idol Textiles Ltd., I am of the view that the appellants case is squarely covered in his favour. Therefore I set aside the impugned order by allowing the appeal of the appellant with consequential relief, if any.
(Operative portion of the Order was pronounced in Open Court on 13/12/2016) (S.S GARG) JUDICIAL MEMBER iss