2003 (12) TMI 526 - AT - Central Excise

Summary

Issues:
1. Refund claim under Rule 57F(13) of the Central Excise Rules 1944.
2. Interpretation of Additional Duties of Excise (T & TA) Act 1978 for refund purposes.
3. Utilization of Modvat credit under Notification No. 24/95-C.E. (N.T.).
4. Admissibility of refund under Rule 57F(13) for finished goods.
5. Legal basis for permitting the refund.

Analysis:

1. The judgment deals with a refund claim under Rule 57F(13) of the Central Excise Rules 1944. The respondents had a refund claim of Rs. 5,24,345/- sanctioned, while a claim for Rs. 88,602/- was rejected. The Commissioner (Appeals) set aside the order denying the claim for Rs. 88,602/-.

2. The appeal raised concerns regarding the accumulation of Modvat credit related to duty paid on inputs under the Additional Duty of Excise (Textiles & Textile Articles) Act 1978. It was argued that the duty on final products, not subject to the Additional Duties of Excise (T & TA) Act, should not be refundable, as per the provisions.

3. The interpretation of Notification No. 24/95-C.E. (N.T.) was crucial, as it specified the utilization of additional duty availed on inputs only towards excise duty leviable under the Additional Duties of Excise (T & TA) Act 1978. This notification emphasized the government's intention not to refund duty collected under this head.

4. Rule 57F(13) was analyzed to determine the admissibility of the refund for finished goods. The rule allows refunds only if final goods can be cleared for home consumption using accumulated Modvat credit equivalent to the duty paid under the Additional Duties of Excise (T & TA) Act.

5. The judgment emphasized the legal position that refunds should only be permitted for duties that can be utilized for discharging final product duty. It was clarified that if finished goods were exempt from duty under the T & TA Act, the accumulation of credit and subsequent refund would not be permissible. The decision highlighted the necessity for a legal basis to permit refunds and the implications of duty exemptions on the Modvat chain.

In conclusion, the judgment found merit in the Revenue's appeal and set aside the Commissioner (Appeals) order, ruling that the refund claim for duty paid under the Additional Duties of Excise (T & TA) Act was not sustainable due to the absence of liability on the final goods under the Act.