Judgment:
1. These six appeals are directed against a common Order-in-Appeal No.400-405/CE/DLH/02 dated 11.7.2002 passed by the Commissioner of Central Excise (Appeals), Delhi. Hence, these are heard together.
3. The appeals relate to rejection of refund claims of the appellant.
From the records we note that the 6 claims detailed herein under, were filed under Rule 57F of the Central Excise Rules, 1944 (Central Excise Rules).------------------------------------------------------------------------Sr. No Amount of refund Period of refund claim, Remarks claimed (Rs.) & Date of Quarter Ending (Q.E) filing------------------------------------------------------------------------ (1) (2) (3) (4)1.
8,09,392.56 Dt. 11.5.90 Dec. 1989 Rejected vide A.Q. No.2.
40,37,536.16 dt. 26.7.90 March 1990 Rejected vide A.O. No.3.
10,63,599.73 dt. 24.4.91 December 1990 Rejected vide A.O No.4.
20,12,954.04 dt. 30.8.91 March 1991 Rejected vide A.O. No.5.
8,78,867.53 dt. 15.10.1991 June 1991 Rejected vide A.O. No.6.
14,56,575.00 dt. 28.1.92 September 1991 Rejected vide A.O. No.As can be seen, the said refund claims were rejected by the Asst.
Commissioner on various grounds (which are common in all cases) as detailed in the individual orders. The claimant preferred appeals against the said Orders in Original and the Commissioner of Central Excise (Appeals) vide his common Order-in-Appeal No. 35 to 40-CE/DLH/94 dt. 28.1.94 remanded the claims back to the original adjudicating authority for re-adjudication with the directions that reasonable opportunity be given to the appellants to substantiate their claims in the light of guidelines recorded in the order.
4. The facts relating to rejection of all six claims are identical.
However, the refund claim at serial No. 5 namely that of Rs. 8,78,867.53 dated 15.10.1991 rejected vide Order-in-Original No. 5/93 dated 16.4.93 is examined in detail for the sake of reference and illustration. As mentioned above, the refund claim was rejected.
4.1 In the de novo proceedings, pursuant to direction contained in Order-in-AppealNo.35-40-CE/DLH/94dt. 28.1.94 the claim was again rejected by the successor Asst. Commissioner vide Order-in-original No.68/96-97 dt. 5.6.96. The appellants again filed appeal to Commissioner (Appeals) against the second rejection order. The Commissioner (Appeals) vide Order-in-Appeal No. 166/CE/DLH/98 dt. 18.3.98 yet again remanded (second remand) the matter for de novo adjudication with certain direction. The Asst. Commissioner sought some information from the appellants and on noticing that the required information is not forthcoming issued a show cause notice dt. 4.10.1999 proposing rejection of the claim on various grounds. The said show cause notice culminated in passing of an Order-in-original No. 125/2001 dt.
31.10.2001. The appellants moved an appeal against the third rejection order. Vide Order-in-Appeal No. 400-405/CE/DLH/2002 dt. 11.7.2002 the appeal was rejected through a common order. Hence, the instant appeal to the Tribunal.
5. In the show cause notice dated 4.10.1999 which has resulted in the Order-in-original No. 125/2001 leading to the rejection of the claim in the de novo proceedings, various facts and the defects alleged in the claim are enumerated.
(1) The claim was rejected for violation of the DEEC scheme under which the exports were made.
(2) Part of the claim was not maintainable as the same was filed in a wrong jurisdiction instead of filing the same with the jurisdictional officer incharge of the job workers premises from where the goods were actually exported.
(3) There were certain deficiencies in the documentation, which have not been removed despite ample opportunity given to the appellants.
6. We note that this Order-in-original No. 125/2001 (Third rejection) was passed consequent to the direction given by the Commissioner (Appeals) vide Order-in-Appeal No. 166/CE/DLH/98 (second remand) after hearing the appeal against the Order-in-original No. 68/96-97 (second rejection) under which this very claim was rejected by the authorities.
The de novo remand was with certain directions. From the Order-in-Appeal No. 166/98 dated 18.3.98 we note that the Ld.
Commissioner (Appeals) on considering the Tribunal judgment in CCE, New Delhi v. Gavs Laboratories, 1997 (92) ELT 696 (T) and CCE, Chandigarh v. Oswal Agro Mills, 1997 (18) RLT 603 (CEGAT) relied upon by the appellants, held that linkage of DEEC scheme with the refund of modvat credit under Rule 57F is not called for and hence not permissible. He accordingly held that, the denial of refund claim was on an erroneous appreciation of the legal position. The Ld. Commissioner (Appeals) further held that this was the substantive legal ground for rejecting the refund. He accordingly directed that the 'claims are required to be considered without regard to the fact that the exports were under the DEEC scheme'.
7. So far as the issue of jurisdiction is concerned, the Ld.
Commissioner held that the appellant is right in their contention regarding jurisdiction as the transfer of the raw material and export had taken place with the approval of the Central Excise authorities and the credit sought to be refunded was taken in the appellant's factory.
8. The only ground for which the matter was remanded to the jurisdictional authorities was to consider the claims on merits in accordance with the Rule 57F(4) and the procedure notified under Notification No. 85/87-CE after obtaining the appellants explanation in respect of deficiencies and discrepancies in the documentation: 9. Notwithstanding these specific parameters provided to the adjudicating authority, we observe that the show cause notice that was issued on 4.10.99, proposing rejection of the refund claim, on account of failure of the appellants to furnish certain documents, goes on to extensively quote the provisions contained in the Exim Policy and Custom Notification No. 159/90-Cus dated 30.3.90 to demonstrate that the claim is liable to be rejected on account of failure to comply with the procedure prescribed in the Exim Policy and the customs notification, relating to import and export of goods under the DEEC scheme.
10. Thereafter the show cause notice proceeds to enlist the provisions contained in Rule 57F(2) and mentions that, (a) certain challans which ought to have been returned are not returned, (b) even the goods which ought to have been returned after processing from the job worker's premises have been directly exported without obtaining any individual permission as required under Rule 57F(2) and 57F(3) of the Central Excise Rules. It is claimed that such removal has been authorised only under Notification No. 18/99-CE (NT) dated 20.2.1999 in Rule 57F(4) of the said rules and hence not available retrospectively.
11. The notice further alleges that the party did not prove that the goods in question were manufactured by the job worker from indigenous raw material supplied to them by the party. The record keeping was deficient and bifurcation of production with reference to manufacture from indigenous and imported raw material was not possible. There is a further objection regarding non-submission of shipping bill No. F.4568 dated 8.5.1991. Certain procedural irregularities such as, filing of refund claim in a quarter other than the appropriate quarter prescribed under appendix to Notification No. 85/87-CE dated 1.3.1987, issued under Rule 57F, is also alleged. Further shipping bill No. F-3871 dated 16.4.1991 corresponding to AR4 dated 15.4.1991 is stated to be in respect of the goods manufactured by M/s Rajdoot Paints, Secunderabad.
It is alleged that it is not clear as to how the detergent powder manufactured by M/s. Rajdoot Paints Inds. could have been cleared by the party on their AR4 A mentioned above. Besides the show cause notice also lists out certain discrepancies in the duty paying document as a result of which the refund claim is objected to.
12. As we have noted, that the Asst. Commissioner was not required to stray into the area of linkage of refund claim and the DEEC. Having done that the said order was required to be quashed on that ground itself. It is also seen that the Order-in-Original also strays into the area of questioning the jurisdiction of the appellants in filing the refund claim for exports effected from the job workers' premises. This ground was also not permissible to be raised, since the Order-in-Appeal dated 18.3.1998 had become final. The only area on which the AC was required to adjudicate upon was with reference to the deficiency in the claim on the documents submitted alongwith the claim.
13. As we note from the Order-in-original No. 125/01, the first discrepancy/deficiency is that certain duty paying documents were not furnished. The list also includes DEEC books shipping bill etc. We are unable to see the relevance of these documents to the refund claim in question. The credit had been accumulated by the appellant on the basis of duty paying documents, which have been accepted by the Rage Office without raising any objection at the point of taking of credit. If the credit itself is to be questioned, then, it is to be done at the stage of RT 12 scrutiny and not when someone seeks refund of accumulated credit under Rule 57F. There is no evidence on record to show that the assessing authorities had any time conveyed any objection in respect of any duty paying document at the point of scrutiny of the duty paying documents. Therefore, once the Range officer has certified the fact of accumulation of certain quantum of credit, the admissibility of credit with reference to an individual duty paying document, cannot be examined again solely because the appellants have sought refund of accumulated credit. We therefore hold that denial of credit on the ground of want of certain duty paying documents is not sustainable.
14. As regards the attempt of the departmental authorities to seek information relating to consumption of the imported material or its allocation in the export product, the same is also not called for. The order dismally fails to indicate the authority of the Rules under which this bifurcation of consumption of imported and indigenous material is required. Though the Order-in-original No. 166/98 dated 18.3.98 specifically restrains the Asst. Commissioner from looking into the DEEC scheme, the Asst. Commissioner has deviously sought to look into the same aspect by demanding the details of consumption of imported material in the export product. This is totally illegal and cannot be sustained.
15. The terms of the Rule 57F are very precise and clear. The appellant have to simply demonstrate that on exporting the finished goods credit has accumulated on account of receipt of duty paid inputs by the manufacturer, which they are unable to utilise for any other purpose, and therefore cash refund is the only way out. So for the sake of argument, even if one assumes that the exported goods have been made by utilising, the duty free imported material, that itself cannot come in way of claiming the refund of accumulated modvat credit which accrues only on receipt of duty paying inputs in the factory. Refund of credit can of course be denied if it is revealed that, the appellants could use the same for any other purpose. We do not find any such grounds applied for rejection. Therefore, we hold that, the enquiry relating to the extent of use of duty free imported inputs in the export production was totally unwarranted and appellant's failure to furnish the information sought on this point cannot be considered to be a deficiency as alleged in the show cause notice.
16. So far as the objection regarding the export made directly from the job workers premises is concerned, while technically such an objection can be raised, however, we note that there is no dispute regarding the fact that the exports have taken place. Refund in any case would be available only on the basis of statutory export documents. Absence of individual permission permitting direct exports from the job workers premises is a minor violation and cannot affect the substantial right of claim of refund of modvat credit. In fact, under the proviso the erstwhile Rule 12(1) of the Central Excise Rules, the Commissioner had the powers to condone the minor lapses in the export procedure, as long as there was a satisfaction of the fact that the export had taken ' place. We therefore condone the procedural breach that occurred in exporting directly from the job worker's premises, whether these job workers were covered by the valid permissions or their permissions had expired since there is no allegation that the said export did not take place.
17. So far as the objection relating to non-submission of the shipping bill is concerned, even this objection has no place, so far as refund under Rule 57F is concerned. The AR4 has been presented by the appellant which prove export and seeking information against the shipping bill is only bringing the DEEC objection through backdoor. The same is not permissible. Hence, we set aside the rejection of claim on this ground as well.
18. As regards the objection relating to the submission of the refund claim in a quarter different than the appropriate quarter as specified in Notification No. 85/87-CE is concerned, even this objection is mere technical one. The filing of refund claim in the respective quarter has been prescribed only as a procedural convenience. So, as long as, the claim is admissible on merit and the exportation is not in doubt, the filing of a refund claim in a wrong quarter cannot take away the right of refund. Therefore, we set aside the rejection of claim on this ground also.
19. We do not find any other worthwhile objection in respect of the claims besides what have been discussed above.
20. As we have noted above, these deficiencies are extracted in respect of refund claim at serial No. 5 relating to refund of Rs. 8,78,867.53 and our findings above are specifically focussed on the objections listed against that refund claim. However, on going through all the six files, the objection being similar, our findings above, shall be applicable in respect of remaining 5 claims also.
21. The impugned order of the Commissioner (Appeals) No.400-405/CE/DLH/2002 hardly needs any comments which only confirms the rejection of the claims. Accordingly, we have no hesitation in holding that the orders passed by the lower authorities are without any justification. Therefore, we set aside the orders of the lower authorities and allow the appeals with all the consequential reliefs in accordance with law.