2005 (6) TMI 420 - AT - Central Excise

Issues:
1. Refund of interest under Rule 49A of Central Excise Rules.
2. Benefit of Notification No. 22/96-C.E., dated 23-7-1996 for cotton yarn used in manufacturing fabrics.
3. Entitlement for refund of interest on captively consumed cotton yarn used in manufacturing cotton fabric for export.

Issue 1: Refund of interest under Rule 49A of Central Excise Rules
The Appellate Tribunal considered appeals where the Commissioner rejected the refund of interest calculated by the Revenue under Rule 49A of Central Excise Rules. The Tribunal noted that the appellants filed appeals against this decision, while the Revenue also filed appeals against the same order where the Commissioner allowed the refund of interest paid for cotton yarn used in manufacturing fabrics cleared for export. The Tribunal found that the Commissioner did not provide a finding on the appellants' claim under Notification No. 22/96-C.E., dated 23-7-1996. Therefore, the Tribunal set aside the orders rejecting the refund claim and remanded the matter to the Adjudicating authority for reconsideration.

Issue 2: Benefit of Notification No. 22/96-C.E., dated 23-7-1996 for cotton yarn used in manufacturing fabrics
The appellants contended that they were entitled to the benefit of Notification No. 22/96-C.E., dated 23-7-1996, and had only paid duty for unprocessed cotton fabrics consumed domestically. The Departmental Representative also highlighted the lack of findings by the Commissioner on this claim. The Tribunal concluded that the matter required reconsideration by the Adjudicating authority as neither the Commissioner nor the Adjudicating authority had addressed this issue. Consequently, the Tribunal set aside the orders rejecting the refund claim for further examination.

Issue 3: Entitlement for refund of interest on captively consumed cotton yarn used in manufacturing cotton fabric for export
Regarding the appeals filed by the Revenue, the Tribunal considered the case of M/s. JCT Ltd., where they argued against paying duty on yarn used in manufacturing fabrics exported by them. The Commissioner (Appeals) allowed the refund of interest on captively consumed cotton yarn used in manufacturing cotton fabric for export. The Revenue contended that appropriate duty was paid on the exported fabric, thus disputing the refund of interest. However, as the Revenue did not challenge the fact of fabric export, the Tribunal upheld the decision to refund interest on duty paid for yarn used in manufacturing cotton fabrics exported by M/s. JCT Ltd. Consequently, the appeals filed by the Revenue were dismissed.

In conclusion, the Appellate Tribunal's judgment addressed issues related to the refund of interest under Rule 49A of Central Excise Rules, the benefit of Notification No. 22/96-C.E., dated 23-7-1996 for cotton yarn used in manufacturing fabrics, and the entitlement for refund of interest on captively consumed cotton yarn used in manufacturing cotton fabric for export. The Tribunal set aside the orders rejecting the refund claims and remanded the matters for reconsideration, while also dismissing the Revenue's appeals concerning the refund of interest on exported cotton fabrics.

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