2005 (1) TMI 446 - AT - Central Excise

Summary

Issues:
1. Rejection of refund claim by Asst. Commissioner and Commissioner of Customs & Central Excise.
2. Availment of benefit under Notification No. 203/92-Cus.
3. Reversal of credit on inputs used for export.
4. Submission of documentary evidence for non-availment of benefit under Notification 203/92-Cus.
5. Compliance with Value Based Advance Licence Scheme.
6. Benefit of restitution to the appellants.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Mumbai involves the rejection of a refund claim amounting to Rs. 3,79,729/- by the Asst. Commissioner and subsequently confirmed by the Commissioner of Customs & Central Excise. The appellant, engaged in the export of P&P Medicaments, fulfilled the export obligation but did not import any item, leading to the surrender and cancellation of Value Based Advance Licences as unutilized, indicating no imports against these licenses. Consequently, the appellant did not avail the benefit of Notification No. 203/92-Cus. for import of goods.

Regarding the reversal of credit on inputs used for export, the appellant reversed the credit of Rs. 3,25,981/- + Rs. 53,748/- availed on inputs used in the export product from PLA against the licenses. Despite not availing the benefit under Notification No. 203/92-Cus., the reversal of credit was undertaken. The Trade Notice No. 43/97 clarified that duty credit reversed on inputs used for export should be refunded if not required to be reversed.

The appellant contended that the conditions of Notification 203/92-Cus. should apply only when the benefit of the notification is availed, which was not the case as no items were imported against the licenses. Citing the judgment in the case of M/s. Dome Bell Investment (P) Ltd., the appellant argued for the sanctioning of the refund claim. The Commissioner of Central Excise (Appeals) rejected the appeal due to the lack of documentary evidence for non-availment of the benefit under Notification 203/92-Cus., despite the cancellation of unutilized advance licenses.

The appellant's reversal of credit was to comply with the Value Based Advance Licence Scheme, but they abandoned the desire to avail the benefit under the scheme, leading to the surrender and subsequent cancellation of the license. The Tribunal, following the ruling in the case of M/s. Dome Bell Investment (P) Ltd., allowed the appeal, recognizing the appellant's right to restitution based on the evidence on record and the fulfillment of export obligations without availing the benefit under the scheme.