2013 (9) TMI 1002 - CGOVT - Central Excise

Denial of rebate claim - utilization of accumulated Cenvat credit of Additional Excise Duties (T&TA) towards payment of basic excise duty on clearance of exported goods and sought rebate of duty paid - Held that - As per Rule 3 of Cenvat Credit Rules 2004 a manufacturer can take Cenvat credit of duties paid. The Rule 3(4) provides for manner of utilization of Cenvat credit availed. The Rule 3(7)(b) of said rules stipulated that Cenvat credit of AED (T&TA) shall be utilized towards payment of duty of excise or as the case may be of service tax leviable under the said Additional Duties of Excise (Textiles & Textile Articles) Act 1978 on any final products manufactured by the manufacturer or for payment of such duty on the inputs themselves if such inputs are removed as such or after being partially processed or any output service. The provisions of said Rule 3(7)(b) does not permit the utilization of Cenvat credit of AED (T&TA) towards payment of Basic Excise Duty. - There is no ambiguity in the provisions of circular No. 267/11/2003-Cx-8 dated 22-3-2007. Applicant was entitled for refund under Rule 5 subject to compliance of condition/procedure laid down therein. But there was no provision under the rules for payment of basic excise duty from such Cenvat credit of AED (T&TA). Applicant has given his own interpretation which suits him and it cannot be accepted being contrary to the provisions of rule 3(7)(b) of Cenvat Credit Rules 2004 and C.B.E. & C. Circular dated 22-3-2007 cited above. The letter dated 5-5-2010 issued by ACCE is contrary to the above said provision of law and therefore the said letter is void ab initio as held by Commissioner (Appeals). - exported goods cannot be treated as duty paid goods and therefore rebate claims are rightly held inadmissible by the lower authorities under Rule 18 of Central Excise Rules 2002 read with Notification No. 19/2004-C.E. (N.T.) dated 6-9-2004. - Decided against assessee.

Summary

Issues:
1. Utilization of accumulated Cenvat credit of Additional Excise Duties (T&TA) for payment of basic excise duty on exported goods.
2. Interpretation of C.B.E. & C. Circular dated 22nd March, 2007.
3. Validity of the order granting permission to utilize accumulated Cenvat credit.
4. Applicability of previous judgments on the present case.

Issue 1: The central issue in this case was the utilization of accumulated Cenvat credit of Additional Excise Duties (T&TA) for payment of basic excise duty on exported goods. The applicant, M/s. Arviva Industries (I) Ltd., sought rebate of duty paid after utilizing the accumulated credit. The original authority rejected the rebate claims, stating that the Cenvat credit of AED (T&TA) cannot be used for basic excise duty. The Commissioner (Appeals) upheld this decision, leading to the revision applications filed by the applicant.

Issue 2: The interpretation of the C.B.E. & C. Circular dated 22nd March, 2007 was crucial in this case. The applicant argued that the circular allowed the utilization of accumulated AED (T&TA) for payment of basic excise duty on exports. They contended that the letter issued by the Assistant Commissioner granting permission to use the credit was consistent with this circular and the provision of law. However, the government noted that Rule 3(7)(b) of the Cenvat Credit Rules did not permit the utilization of such credit towards basic excise duty, as clarified in the circular.

Issue 3: The validity of the order granting permission to utilize the accumulated Cenvat credit was also contested. The applicant claimed that the order was valid based on the Circular and the revised position of the Cenvat Credit Rules. However, the government found that the order was contrary to the provisions of Rule 3(7)(b) and the Circular, leading to its rejection.

Issue 4: The applicability of previous judgments on the present case was raised by the applicant. They cited various decisions, including those from the Bombay High Court and Tribunal decisions, to support their claim. However, the government observed that none of the cited cases allowed the use of accumulated credit for payment of basic excise duty, leading to the rejection of the revision applications.

In conclusion, the government upheld the decision of the lower authorities, stating that exported goods cannot be treated as duty paid goods, and therefore, the rebate claims were rightly held inadmissible. The revision applications were rejected for lacking merit based on the analysis of the relevant rules, circulars, and case laws presented in the judgment.