Bharat Chemicals Vs. Cce

Bharat Chemicals vs Cce

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Mar 19, 2004

~3 min read

https://sooperkanoon.com/case/34645

For advocates & juniors · 7-day free trial

Brief this judgment before chambers

Stop skimming 50 pages - get an 18-section AI Brief on this case, ask scoped follow-ups, and find related precedents with Semantic Search. Full trial, no card required.

18-section brief - facts, issues, ratio, relief
Ask this case - answers cite the judgment
Semantic search - find precedents by meaning
Research drawer - sections, cites, related cases

Citation: sooperkanoon.com/34645
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: K Usha, N T C.N.B.
Decided On: Mar 19, 2004
Subject: Service Tax

Case Summary

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

Service Tax

Key legal issue: Service Tax

Parties & Advocates

Appellant / Petitioner

Bharat Chemicals

Respondent

Cce

Legal References

Reported In: (2004)(170)ELT568Tri(Mum.)bai

Excerpt

.....the recovery of the amount so excess debited. the present appeal challenges that finding.2. the contention of the appellant-exporter is that it is entitled to refund of duties of excise paid on the exported goods and the inputs used in the manufacture of exported material. according to it, rebate entitlement is actual amount of duty paid on exported goods, irrespective of whether actual amount paid was at the correct rate of duty or not.3. the learned dr has reiterated the findings in the impugned order and has submitted that through this device, the appellant has managed to obtain a higher amount of modvat credit as cash rebate than is actually due on the quantity of export. the revenue, however, has not shown that the amount of rebate obtained by the appellant was more than the duty payable on the exported goods as well as the inputs used in production of export goods.4. we are inclined to accept the appellant's claim. rule 12 of central excise rules speaks of "rebate of duty paid on the excisable goods" and "duty paid on materials used in the manufacture of goods" and not of duty payable. duty payment may be erroneous, at a higher or lower rate.the scheme of the statute seems to be, to return as rebate, actual amount of "duty paid" and not the amount of duty "payable". in the present case, the rebate paid is equal to the duty actually paid. that payment seems to be in accordance with the rules. revenue is not justified in distinguishing payment of duty from pla and modvat account, since these are merely two accounts from which payments can be made. the rule relating to rebate makes no distinction based on the source or manner of payment of duty.5. the learned sdr has also pointed out that in the present case, the joint secretary revision is the appropriate appellate authority, in as much as matters arising from rebate claim are not appealable to the cegat. we are not accepting this objection. show cause notice proceeded on the basis that excess modvat.....

Full Judgment

1. The appellant is a manufacturer of Paracetamol. It paid excise duty at the rate of 20% Ad-valorem on some consignments which were exported.

These payments were from Modvat account (RG 23-A). The rate adopted was incorrect because under Notification No. 6/94 dated 1.3.94, the effective rate of duty had been fixed at 10%. The appellant was paying duty at the correct lower rate on goods which were cleared for home consumption. Subsequently, the appellant obtained rebate of the duty actually paid in respect of the exported consignments. In the proceedings under appeal before us, excise authorities have held that the appellant made excess debit in the Modvat account through payment of higher amount of duty and has ordered the recovery of the amount so excess debited. The present appeal challenges that finding.

2. The contention of the appellant-exporter is that it is entitled to refund of duties of excise paid on the exported goods and the inputs used in the manufacture of exported material. According to it, rebate entitlement is actual amount of duty paid on exported goods, irrespective of whether actual amount paid was at the correct rate of duty or not.

3. The learned DR has reiterated the findings in the impugned order and has submitted that through this device, the appellant has managed to obtain a higher amount of modvat credit as cash rebate than is actually due on the quantity of export. The Revenue, however, has not shown that the amount of rebate obtained by the appellant was more than the duty payable on the exported goods as well as the inputs used in production of export goods.

4. We are inclined to accept the appellant's claim. Rule 12 of Central Excise Rules speaks of "rebate of duty paid on the excisable goods" and "duty paid on materials used in the manufacture of goods" and not of duty payable. Duty payment may be erroneous, at a higher or lower rate.

The Scheme of the Statute seems to be, to return as rebate, actual amount of "duty paid" and not the amount of duty "payable". In the present case, the rebate paid is equal to the duty actually paid. That payment seems to be in accordance with the Rules. Revenue is not justified in distinguishing payment of duty from PLA and Modvat account, since these are merely two accounts from which payments can be made. The Rule relating to rebate makes no distinction based on the source or manner of payment of duty.

5. The learned SDR has also pointed out that in the present case, the Joint Secretary Revision is the appropriate appellate authority, in as much as matters arising from rebate claim are not appealable to the CEGAT. We are not accepting this objection. Show cause notice proceeded on the basis that excess modvat credit had been utilized. The impugned orders are also proceeding to recover modvat credit and not excess rebate paid. Therefore, the appellant is right in filing the appeal before this Tribunal.

6. In the view we have taken above, we set aside the impugned order and allow the appeal.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Bharat Chemicals vs Cce Same Subject Service Tax Same Judge K Usha, N T C.N.B.