2004 (6) TMI 464 - AT - Central Excise

Summary

Issues:
1. Refund of unutilized Modvat credit for exported goods.
2. Compliance with conditions of Notification No. 85/87-CE for refund claims.

Analysis:
Issue 1: Refund of unutilized Modvat credit for exported goods
The case involved the Appellant, engaged in manufacturing excisable Man Made Fabrics, exporting goods under Bond without discharging duty, leading to unutilized Modvat credit. The Appellant sought a refund of the unutilized credit. The Tribunal noted that Rule 57F(13) allowed for cash refund of unutilized credit, especially for goods exported. The Tribunal rejected the argument that the credit could have been utilized otherwise, emphasizing the Appellant's submission of production clearance and export statements. It was deemed impractical for the Appellant to pay duty from Personal Ledger Account and claim a refund, thus supporting the Appellant's claim for a refund. The Tribunal also acknowledged the submission of original documents for export proof, countering the authority's rejection of the refund claim under Rule 57F(13).

Issue 2: Compliance with conditions of Notification No. 85/87-CE for refund claims
The Revenue appealed on the grounds of non-compliance with the conditions of Notification No. 85/87-CE, specifically regarding the number of claims filed within a quarter. The Tribunal analyzed the conditions and found that the substantive power to refund stemmed from Rule 57F(13), with the notification outlining procedures. The Tribunal highlighted a proviso allowing one claim per calendar month, which the Appellant did not exceed. Therefore, the grounds of violation of conditions 2 and 5 of the notification were not upheld. Additionally, the Tribunal emphasized the commercial rationale behind not discharging current duty liabilities in cash when Modvat credits were available and undisputed, further supporting the dismissal of the appeal.

In conclusion, the Tribunal dismissed the appeal, affirming the Appellant's entitlement to the refund of unutilized Modvat credit for exported goods and ruling in favor of the Appellant's compliance with the conditions of Notification No. 85/87-CE for refund claims.