2004 (2) TMI 520 - AT - Central Excise

Re-adjudication on remand - Refund of accumulated Modvat credit - Refund claim - Accumulated Modvat credit

Summary

Issues Involved:
1. Rejection of refund claims under Rule 57F of the Central Excise Rules, 1944.
2. Violation of DEEC scheme.
3. Jurisdictional issues.
4. Documentation deficiencies.
5. Procedural irregularities in export.

Detailed Analysis:

1. Rejection of Refund Claims under Rule 57F of the Central Excise Rules, 1944:
The appeals pertain to the rejection of six refund claims filed under Rule 57F of the Central Excise Rules, 1944. The claims were initially rejected by the Assistant Commissioner on various grounds common to all cases. The Commissioner of Central Excise (Appeals) remanded the claims back for re-adjudication, directing that reasonable opportunity be given to the appellants to substantiate their claims.

2. Violation of DEEC Scheme:
The show cause notice dated 4-10-1999, which led to the Order-in-Original 125/2001, cited several grounds for rejection, including the violation of the DEEC scheme. However, the Commissioner (Appeals) in Order-in-Appeal No. 166/CE/DLH/98 held that linking the DEEC scheme with the refund of Modvat credit under Rule 57F was erroneous. Despite this, the Assistant Commissioner continued to consider the DEEC scheme in the third rejection, which was deemed illegal and unsustainable.

3. Jurisdictional Issues:
The Commissioner (Appeals) had previously ruled that the appellant was correct in their jurisdictional contention, as the transfer of raw material and export had taken place with the approval of the Central Excise authorities. The Assistant Commissioner, however, questioned the jurisdiction again in the third rejection, which was not permissible since the Order-in-Appeal dated 18-3-1998 had become final.

4. Documentation Deficiencies:
The Assistant Commissioner cited deficiencies in documentation, such as missing duty paying documents and shipping bills. The Tribunal found that the relevance of these documents to the refund claim was questionable. The credit had been accumulated based on duty paying documents accepted by the Range Office, and any objections should have been raised during RT 12 scrutiny, not at the refund stage. The Tribunal held that denial of credit on these grounds was not sustainable.

5. Procedural Irregularities in Export:
The show cause notice also cited procedural irregularities, such as exports being made directly from the job worker's premises without individual permission. The Tribunal noted that while technically such an objection could be raised, the substantial right to claim a refund could not be affected by minor procedural breaches. The Commissioner had the power to condone minor lapses in the export procedure, and the Tribunal condoned the procedural breach in this case.

Conclusion:
The Tribunal found that the Assistant Commissioner had overstepped the specific parameters provided for adjudication, particularly by linking the refund claim with the DEEC scheme and questioning jurisdiction. The Tribunal set aside the rejection of claims on grounds of documentation deficiencies, procedural irregularities, and jurisdictional issues. The appeals were allowed with all consequential reliefs, and the orders of the lower authorities were deemed without justification.