2006 (8) TMI 77 - AT - Central Excise

Rebate/Refund Alleged that appellant had first availed Cenvat credit then after due export received drawback amount and they reverse it After considering the prior decision authority decided that refund is admissible

Summary

Issues:
Whether the assessee can avail rebate on duty paid goods after claiming drawback amount from Customs Authorities.

Analysis:
The appeal in question revolves around the eligibility of the assessee to claim a rebate on duty paid goods after already receiving a drawback amount from the Customs Authorities. The Commissioner (Appeals) based their decision on Rule 5 of the Cenvat Credit Rules, 2002, noting that the refund claim was initially rejected due to the appellants availing Cenvat Credit before receiving the drawback amount. However, as the assessee reversed the drawback taken, amounting to Rs.1709/-, they were deemed eligible for a refund. This decision was supported by precedent cases such as Chandrapur Magnet Wires Pvt. Ltd. v. CCE and Hello Minerals Water (P) Ltd. v. UOI. The Commissioner (Appeals), Central Excise, Pune, allowed a refund of Rs. 44,572/- based on Rules 5 and 7 of the Cenvat Credit Rules, 2002, which the Department contested.

The Department argued that the decisions cited by the Commissioner (Appeals) were not applicable and contended that the assessee was not entitled to a refund of Cenvat credit since they had already claimed a drawback under the Customs and Central Excise duties drawback Rules, 1995, or a rebate of duty under the Central Excise Rules, 2002. The Department referenced cases such as Powerflow Ltd. v. Collector of Central Excise, Bangalore, CC, Mumbai v. Bharat Pulverising Mills Ltd., and Kamra Bottling Company v. CCE, Jaipur, to support their position. However, the Tribunal found that the case did not involve simultaneous availment of modvat credit and drawback, as the drawback had been reversed by the assessee. The Tribunal concluded that the principle established in Customs matters was directly applicable, and upheld the decision of the Commissioner (Appeals) to allow the refund. Consequently, the revenue appeal was dismissed for lacking merit.

In conclusion, the Tribunal's judgment clarified the eligibility of the assessee to claim a rebate on duty paid goods after reversing the drawback amount, emphasizing the applicability of relevant rules and legal precedents in determining the admissibility of the refund.