Custom, Excise & Service Tax Tribunal
Raymond Ltd vs Cce Mumbai Iii on 23 June, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/671/08 Mum
E/CO 117/08
Arising out of Order-in-Appeal No. SRK/246/M-III/2008 dated 1st May, 2008 passed by the Commissioner of Central Excise (Appeals), Mumbai.
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Honble Shri P.R. Chandrasekharan, 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 :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
Raymond Ltd.
:
Appellant
Versus
CCE Mumbai III
Respondent
Appearance Shri Prakash Shah, Advocate for appellant Shri H.B. Negi, SDR For Respondent CORAM:
Shri Ashok Jindal, Member (Judicial) Shri P.R. Chandrasekharan, Member (Technical) Date of Hearing : 23.06.2011 Date of Decision : 23.06.2011 ORDER NO.
Per Ashok Jindal The appellant has filed this appeal against the order of rejection of their refund claim.
2. Facts of the case are that the appellant is the manufacturer of yarn and textile. As per the Government policy on textile articles, the appellant has opted for exemption from payment of duty as provided under Notification No. 30/2004 dated 09.07.2004 with effect from July, 2004. Prior to July, 2004 the appellant was paying excise duty on the final product manufactured and removed by them. They were also availing CENVAT credit against the inputs and capital goods received in their factory which are used in the manufacturing of their final products. On the date of opting out of modvat scheme to exemption scheme under Notification No. 30/04 dated 09.07.2004 there was unutilized accumulated CENVAT credit balance of Rs.31,20,523/- was lying in their CENVAT credit account. The appellants filed the refund claim of the said account as per Rule 5 of the CENVAT Credit Rules, 2004 which was denied by both the lower authorities. Against the said order the appellant is before us.
3. Shri Prakash Shah, learned Advocate for the appeared for the appellant and submitted that the adjudicating authority has rejected their refund claim on the ground that the appellant has not produced any documents evidencing the export of goods for which they are claiming the above unutilized accumulated CENVAT credit as per Rule 5 of CENVAT Credit Rules, 2004. He further submitted that on appeal before the Commissioner (Appeals), the Commissioner (Appeals) also rejected their refund claim as the claim is not maintainable as per Rule 11(3)(i) of the CENVAT Credit Rules, 2004. In support of their claim he submitted that under provision of Rule 11(3)(i) with effect from 01.03.2007 it was inserted into statute vide Notification No. 10/07. Therefore, as on 9.7.2004 these rules were not applicable to the case of the appellant and these provisions of Rule 11(3) are not made applicable retrospectively with regard to their refund claim is maintainable as per Rule 5 of the CENVAT Credit Rules, 2004. He relied on the decision of Union of India v. Slovak India Trading Co. Pvt. Ltd. 2006 (201) ELT 559 (Kar.) which was affirmed by the honble apex court as reported in 2008 (223) ELT A170 (S.C.). He also relied on the decision in the case of Jain Vanguard Polybutylene Ltd. v. CCE Nashik - 2009 (247) ELT 658 (Tri. - Mumbai) which was affirmed by the Bombay High Court vide 2010 (256) ELT 523 (Bom.). He also relied on the decision of this Tribunal in the case of Shree Prakash Textiles (Guj.) Ltd. v. CCE Ahmedabad 2004 (169) ELT 162 (Tri. Mumbai) and in the case of Bombay Dyeing & Manufacturing Co. Ltd. vide Order No. A/254/2007/C-I (EB) dated 10.04.2007. Therefore, he submitted that their refund claim is maintainable. In addition to this submission Shri Prakash Shah submitted that the appellant has CENVAT credit involved in the inputs work-in process and finished goods lying in their factory on the date of opting out of MODVAT scheme i.e. on 09.04.2004.
4. Shri H.B. Negi, learned SDR appearing on behalf of the Revenue submitted that it is not coming out with regard to whether the appellant has reversed the CENVAT credit involved in inputs work-in process and finished goods lying on 09.04.2004 or not. He further submitted as per Rule 5 of the CENVAT Credit Rules, 2004 unutilised credit can be refunded in case of export therefore, the adjudicating authority has rightly rejected their refund claim. To support his contention he placed reliance on CCE Chandigarh v. Rama Industries 2009 (238) ELT 778 (Tri. Del.). He also relied on the judgement in the case of CCE vs. Chandra Laxmi Tempered Glass Co. Pvt. Ltd. 2009 9234) ELT 245 (H.P.).
5. Heard both sides.
6. We have considered the submissions made by both the sides in detail. There is no doubt that when the appellant has opted from Modvat claim from July, 2004 the appellant are required to reverse CENVAT credit involved in input work-in process and finished goods lying on stock. We do agree that the contention of the learned Advocate that the said refund are not coming out from the records which needs examination. Now we come to the issue whether the provisions of Rule 11(3) of the CENVAT credit are applicable to the case or not? Admittedly these provisions came with effect from 01.03.2007 and are not applicable retrospectively. Therefore, the said provisions are not applicable to the facts of this case. Now we come to the issue whether the claim of the appellant of refund is maintainable under Rule 5 of CENVAT Credit Rules, 2004 or not? As in the case of Slovak India Trading Co. Pvt. Ltd. (supra) the Honble Karnataka High Court has answered the references in paragraph 5 of the order which is reproduced herein below:-
5. There is no express prohibition in terms of Rule 5. Even otherwise, it refers to a manufacturer as we see from Rule 5 itself. Admittedly, in the case of hand, there is no manufacture in the light of closure of the Company. Therefore, Rule 5 is not available for the purpose of rejection as rightly ruled by the Tribunal. The Tribunal has noticed that various case laws in which similar claims were allowed. The Tribunal, in our view, is fully justified in ordering refund particularly in the light of the closure of the factory and in the light of the assessee coming out of the Modvat Scheme. In these circumstances, we answer all the three questions as framed in para 17 against the Revenue and in favour of the assessee.
7. The view taken by the Honble Karnataka High Court has been affirmed by the honble apex court. Therefore we have no hesitation to follow the same. Accordingly, we allow the refund claim lying unutilized accumulated on 09.07.2004 which is not involved inputs work-in process or finished goods lying in stock in 2004. The matter is remanded back to the adjudicating authority to examine the fact whether the appellant has reversed the CENVAT credit involved on inputs work-in process and finished stock lying on 09.07.2004. If the appellant has reversed then the balance amount shall be sanctioned. With these observations the appeal is allowed. The refund claim of the appeal shall be disposed within one month of the receipt of this order.
8. Cross Objection is also disposed of in the above manner.
(Dictated in open Court) (P.R. Chandrasekharan) Member (Technical) (Ashok Jindal) Member (Judicial) nsk 2