2012 (10) TMI 984 - CGOVT - Central Excise

Denial of rebate claim - Accumulated Cenvat credit amounts lapsed on 9-7-2009, therefore the amounts paid by the applicant while exporting the goods cannot be treated as duty of Excise and such an attempt was to encash the lapsed Cenvat credits - Held that - When the condition of non-availment of Cenvat credit on inputs is read with the factual details/report of jurisdictional superintendent dated 21-8-2009, then it is become clear that the applicant did not qualify the condition of Notification No. 30/2004-C.E., dated 9-7-2004. The effective rate of duty in this case is as per Notification No. 29/2004-C.E., dated 9-7-2004. So the applicant had to pay duty under Notification No. 29/2004-C.E., dated 9-7-2004. Government therefore finds force in the above grounds of the applicant that there being no other objection or Show Cause Notice for denial of rebate claim. The legality of duty payments made by him from his Cenvat credit accounts could not be challenged/as there was no such allegation in the Show Cause Notice. In view of above, Government does not find it proper to deny the applicant s substantial benefits of impugned rebates claim as there is no dispute about compliance of other condition of the Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004. - Decided in favour of assessee.

Summary

Issues Involved:

1. Rejection of rebate claims on the grounds of lapsed Cenvat credits.
2. Compliance with Notification No. 30/2004-C.E., dated 9-7-2004.
3. Legality of duty payments and rebate claims.
4. Applicability of relevant legal provisions and precedents.

Issue-wise Detailed Analysis:

1. Rejection of Rebate Claims on the Grounds of Lapsed Cenvat Credits:

The applicant, a manufacturer-exporter, filed five rebate claims amounting to Rs. 9,07,942 for exported woven fabrics. The original authority rejected these claims, stating that the amounts paid by the applicant while exporting the goods could not be treated as duty of Excise since accumulated Cenvat credit amounts had lapsed on 9-7-2009. The applicant contended that they had taken credits against inputs used in exported goods, as confirmed by statutory records, the Range Superintendent's report, and the Show Cause Notice. The applicant argued that there was no contravention of Notification No. 30/2004-C.E., dated 9-7-2004, as they had taken credit against the inputs used in the exported products.

2. Compliance with Notification No. 30/2004-C.E., dated 9-7-2004:

The applicant argued that Notification No. 30/2004-C.E., dated 9-7-2004, mandates not to avail Cenvat credit if availed, hence the notification does not apply. The applicant provided evidence such as entries in the RG 23 Register, five ARE-1s, and the Jurisdictional Range Superintendent's letter, proving that credit was taken against duty-paid inputs used in the exported goods. The applicant also cited case laws and Board's Circulars to support their claim that the rebate sanctioning authority should only examine the admissibility of rebate of the duty paid on the export goods covered by the claim and not the correctness of assessment.

3. Legality of Duty Payments and Rebate Claims:

The applicant argued that they had paid duty on input chemicals and dyes as per statutory provisions and claimed rebate against the duty-paid input chemicals and dyes only. The applicant contended that the assumption by the adjudicating authority that accumulated credit stands lapsed was incorrect. The applicant cited the Hon'ble High Court of Gujarat's judgment in CCE & Cus., Surat-I v. Annapurna Industries P. Ltd., which held that in the absence of any provision, notification, or circular, the credit accumulated cannot lapse. The applicant also argued that the department should not deny the rebate claim on the grounds that duty paid is not duty of Central Excise, as the department had accepted the revenue as duty.

4. Applicability of Relevant Legal Provisions and Precedents:

The applicant relied on several judgments to support their claim, including Jayant Oil Mills v. CCE, Hico Products v. CCE, CCE Global v. Global Overseas, and CCE v. Rattan Melting & Wires Ind. The applicant argued that the Commissioner (Appeals) had not answered the submissions made in the appeal memo and that the impugned order was cryptic and did not reason out why the relied upon judgments were not applicable. The applicant also cited the Hon'ble High Court of Bombay's judgment in Rostam Parvaresh v. U.O.I., which held that non-consideration of relevant submissions results in miscarriage of justice.

Conclusion:

The government considered the submissions and noted that the applicant had cleared and exported woven fabrics on payment of Central Excise duty and filed rebate claims. The jurisdictional Range Superintendent reported that the applicant had not availed Cenvat credit on grey fabrics but had availed credit on chemicals and dyes. The government found that the applicant did not qualify the condition of Notification No. 30/2004-C.E., dated 9-7-2004, and had to pay duty under Notification No. 29/2004-C.E., dated 9-7-2004. The government found force in the applicant's grounds and did not find it proper to deny the rebate claims. The government set aside the Order-in-Appeal and allowed the revision application, thus granting the applicant's rebate claims.