Customs, Excise and Gold Tribunal - Delhi
Smithklime Beechem Consumer ... vs C.C.E., Bangalore on 2 January, 2002
Equivalent citations: 2002(141)ELT180(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. This case has come up for rehearing after the application for Rectification of Mistake was allowed. In paras 11 and 12 the Tribunal in its Final Order No. A/1076/2000-NB (DB), dated 8-12-2000 [2001 (127) E.L.T. 64 (Tri. - Del.)] had held as under :
"Insofar as paying the refund in cash is concerned, we will have to examine the provisions of Rule 57E, We find that there is a provision in Rule 57E(2). Rule 57E(2) reads as, 'If a manufacturer of the final product has not taken any credit or has taken credit on any inputs and subsequently it so happens that any additional amount of duty is recovered by the manufacturer of such inputs or importer of such inputs in respect of such inputs, then manufacturer of the final product shall be allowed an additional amount equal to the amount of duly so recovered, if the manufacturer or importer of such inputs has passed on the incidence of the additional amount of duty to the manufacturer of final products."
Thus we find that there is no provision for refund of duty in cash under Sub-rule (2) of Rule 57E. This fact is further supported by the subsequent Sub-rules (4) and (5). Against the above findings of the Tribunal the applicant had filed an ROM application. Disposing of this ROM by Misc. Order No. M/114/2001-NB(D), dated 8-6-2001, this Tribunal held, "In this application the applicant has submitted that the Tribunal has relied on Rule 57E(2) which was not in force during the year 1995-96 and therefore, a mistake has crept in the Final Order of the Tribunal. It was submitted that during the year 1995-96 Rule 57E provided :
"If duty paid on any inputs in respect of which credit has been allowed under Rule 57A, is varied subsequently due to any reason resulting in payment of refund to, or recovery of more duty from the manufacturer of importer, as the case may be of such inputs, the credit allowed shall be varied accordingly by adjustment in the credit account maintained under Sub-rule (3) of Rule 57G or in the accounts maintained under Rule 9 or Sub-rule (1) of Rule 173G, or if such adjustment is not possible-for any reason, by cash recovery from or, as the case may be, refund to the manufacturer availing of the credit under Rule 57A."
2. The facts of the case in brief are that the appellants are engaged in the manufacture of Horlicks in bulk at their Rajamundry factory. The bulk product is cleared on payment of duty to the appellants' packing station at Bangalore. At the packing station, the bulk product is repacked into smaller consumer packs. Such smaller consumer packs are cleared on payment of duty. Modvat credit of duty paid on bulk Horlicks is taken at Bangalore packing station. This credit is utilised for payment of duty on Horlicks cleared at Bangalore packing station.
3. Initially the assessment of clearances at Rajamundry factory was done on a provisional basis, These assessments were subsequently finalised. Consequent to which Rajamundry factory paid excise duty of Rs. 18,34,599/-. The Supdt. of Central Excise issued a certificate under Rule 57E of the Central Excise Rules to this effect. The packing station at Bangalore was closed down as a result of which the packing materials in stock and machinery etc. were shifted to the packing station at Madras. Packing station at Bangalore took Modvat credit of differential duty amounting to Rs. 18,34/599/- on the strength of the certificate issued by the jurisdictional Supdt. on 29-8-94. The appellants applied for transferring of the credit of Rs. 18,35,018.73 inasmuch as in addition to Rs. 18,34,5997- an additional credit of Rs. 419.73 was lying in balance in RG-23A part II at Bangalore packifig station on the date of its closure. This request was made in terms of Rule 57F(7) of the Cehtral Excise Rules. In the alternative, it was requested that cash refund as admissible under Rule 57E of the Central Excise Rules may be allowed. This request was turned down. Central Excise Registration Certificate at Bangalore Was surrendered on 27-12-95. The appeal was filed before the Tribunal which remanded the matter for de novo adjudication with the direction to examine the request of the appellant under the provisions of Rule 57F(7) and Rule 57E of the Central Excise Rules, 1944. The Commissioner in de novo proceedings rejected the request of the appellants for transfer of credit under Rule 57F(7) or refund in cash under Rule 57E of the Central Excise Rules.
4. The Tribunal after examining the various contentions of the appellants and the respondent came to the conclusion that there were two issues involved; that the first issue Was whether the credit taken on the strength of 57E certificate on 29-8-94 can be transferred when the factory had closed its operations in June, 1994. The second issue for determination was whether cash refund of the amount of credit on the strength of 57E certificate issued by the jurisdictional Supdt. can be paid. The Tribunal on the first issue held that provisions of the amended Rule 57F(7) will not be applicable to the facts of the present case. This decision of the Tribunal was not agitated by the Counsel for the appellants at the rehearing stage. On the second issue the Tribunal inadvertently held as indicated while discussing the ROM application decided by the Miscellaneous Order stated above.
5. Learned Counsel, therefore, submitted that since the question of refunding the amount in cash was permitted by Rule 57E(2), as it then was, the appeal may be allowed. Learned DR submitted that their's was a case under Rule 57F and not under Rule 57E.
6. Having considered the arguments of both sides we note that in view of the clear position of Rule 57E(2) the appellant was entitled to the refund. Since the appellant is entitled to the refund we hold accordingly. The appeal is allowed in the above terms.