Commissioner of Central Excise Vs. Yark Prints

Commissioner of Central Excise vs Yark Prints

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Dec 10, 2003

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Citation: sooperkanoon.com/33386
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: S T S.S.
Decided On: Dec 10, 2003
Subject: Excise

Case Summary

AI-generated summary - not the official court judgment text.

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Commissioner of Central Excise

Respondent

Yark Prints

Legal References

Reported In: (2004)(186)ELT105Tri(Mum.)bai

Excerpt

.....final products which are cleared for export under bond or used in the intermediate products cleared for export in accordance with sub-rule (1), the credit of specified duty in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duly of excise on any final products cleared for home consumption or for exports on payment of duty and where for any reason, such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may specified by the central government. the term "for any reason" used in this proviso has wider connotation and covers all types of situations, where the adjustment of accumulated credit was not possible, to refund the credit in cash. in the present case, the appellants could not utilise the accumulated credit for discharging duty as the levy was on compounded basis and duty was required to be discharged only in cash, therefore, as per the provision of rule 57f(13), the appellants were entitled for cash refund and accordingly, they had filed the refund claim which has been wrongly rejected by the lower authority." "1. the contention of the assessee that the refund of accumulated modvat credit lying in rg23 pt.ii on account of introduction of compounded levy scheme is covered under rule 57f(13) of cer, 1944 is not tenable, as the provisions of noti. 85/87-ce as amended issued under said rule only provides for the refund of duty of credit earned on exported goods cleared under the bond and it did not provide for refund of balance modvat credit on account of introduction of compound levy scheme. there is also no provision under compounded levy scheme introduced under section 3a and no clarification from legislature/govt. for refund of modvat credit of duty lying in rg 23a pt. ii as on 16.12.98 and hence the refund of modvat credit lying as balance in rg 23a pt. ii was correctly rejected by the jac, since the factor relied.....

Full Judgment

1. The respondents are processors of man-made fabrics. They filed a refund claim for the accumulated credit lying as balance, as they would not and could not use the same on revering to Compounded levy scheme.

The same was rejected. Commissioner (Appeals) allowed the refund after holding - "5. I find that the appellants were taking the modvat credit when they were receiving the processed fabrics from other processors on payment of duty, they were then further processing these fabrics and clearing the same for exports under bond. The refund in the present case has arisen on account of change in method of central excise levy by the legislature. Now, the central excise duty is to be paid by the textile processors as per Section 3A i.e. compound levy scheme from 16.12.98. The present refund claim is covered by the provisions of Rule 57F(13). It is provided in this rule that where any inputs are used in the final products which are cleared for export under bond or used in the intermediate products cleared for export in accordance with Sub-rule (1), the credit of specified duty in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duly of excise on any final products cleared for home consumption or for exports on payment of duty and where for any reason, such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may specified by the Central Government. The term "for any reason" used in this proviso has wider connotation and covers all types of situations, where the adjustment of accumulated credit was not possible, to refund the credit in cash. In the present case, the appellants could not utilise the accumulated credit for discharging duty as the levy was on compounded basis and duty was required to be discharged only in cash, therefore, as per the provision of Rule 57F(13), the appellants were entitled for cash refund and accordingly, they had filed the refund claim which has been wrongly rejected by the lower authority." "1. The contention of the assessee that the refund of accumulated modvat credit lying in RG23 Pt.II on account of introduction of compounded levy scheme is covered under Rule 57F(13) of CER, 1944 is not tenable, as the provisions of Noti. 85/87-CE as amended issued under said rule only provides for the refund of duty of credit earned on exported goods cleared under the bond and it did not provide for refund of balance modvat credit on account of introduction of compound levy scheme. There is also no provision under compounded levy scheme introduced under Section 3A and no clarification from legislature/Govt. for refund of modvat credit of duty lying in RG 23A Pt. II as on 16.12.98 and hence the refund of modvat credit lying as balance in RG 23a Pt. II was correctly rejected by the JAC, since the factor relied upon by the assessee for refund of modvat credit which are considered by the Commissioner (A) are not squarely covered by the provisions of Rule 57F of CER, 1944.

2. The Commissioner (A) has erred in holding that the present refund claim is covered under the provisions of Rule 57F (13) since Noti.

85/87-CE as amended issued under Rule 57F only provides for the refund of duty of credit earned on exported goods, cleared under bond and there is no scope to allow the refund of balance of modvat credit lying in RG23 A Pt. II unutilised amount of introduction of the compounded levy scheme w.e.f. 16.12.98, the Commissioner (A) has also erred in holding that the term, 'for any reason' used in Rule 57F(13) has wider connotation which also covers the factor relied upon by the assessee as it contrary to the contention made in memorandum of appeal (para 3) that more duty was paid form PLA and they were in position to utilise the said credit towards the payment of duty of excise for home consumption or for export on payment of duty and hence holding of Commissioner (A) that the assessee could not utilise the accumulated credit is also contrary to the contention of the assessee and hence the refund claim rejected by the JAC is proper in view of the provisions of Noti. 85/87-CE as amended is proper and sustainable in law.

In view of the above the order passed by the Commissioner (A), does not appears to be proper and legal and requires to be set aside." a) The Commissioner (Appeals) has found that the credit balance could not be used and had accumulated due to exports been effected and refund was eligible in terms of Rule 57F(13) and the relevant notification.

legislative intent of Rule 57F(13) and notification compliance is found to be in order by Commissioner. Merely because Government clarification is not available the legislative intent cannot be frustrated.

c) Merely because more duty was paid from PLA and that resulted in credit accumulation as made out in grounds in this appeal cannot be a reason to deny the refund if otherwise eligible.

4. The appeal of Revenue is therefore required to be dismissed. Ordered accordingly.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Commissioner of Central Excise vs Yark Prints Same Subject Excise Same Judge S T S.S.