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2012 (6) TMI 169 - AT - Central ExciseRefund Cenvat credit refund claims were sanctioned by Additional Commissioner of Central Excise - Revenue challenged the orders-in-original passed by the Additional Commissioner Power of Additional Commissioner - section 12E of the Central Excise Act, 1944 provides that a Central Excise officer may exercise the powers and discharge the duties conferred or imposed under this Act or any other Central Excise officer who is subordinate to him, but there should be justification for that Held that - Additional Commissioner not mentioned anywhere in the order that those orders are being passed by him in exercise of powers under section 12E of the Central Excise Act, 1944. Since under the statute powers of granting refund are with the Assistant Commissioner/Deputy Commissioner of Central Excise, passing of these order in original by the Additional Commissioner has rightly been held as unsustainable. Matter remanded back to the Assistant Commissioner/Deputy Commissioner for deciding the refund claims on merit under the provisions of Rule 5 of the CENVAT Credit Rules read with notification no. 5/2006-CE(NT) dated 14.03.2006 after giving opportunity of hearing to the appellant. The appeals are disposed of by way of remand.
Issues:
1. Jurisdiction of Additional Commissioner to grant refund. 2. Interpretation of Section 12E of the Central Excise Act. 3. Validity of orders-in-original passed by the Additional Commissioner. 4. Refund claims under Rule 5 of the CENVAT Credit Rules. Jurisdiction of Additional Commissioner to grant refund: The case involved four appeals filed by a company against an order granting refund claims for CENVAT credit of input and input services. The Revenue challenged the refund orders on the grounds that the Additional Commissioner erred in granting the refund without verifying if the inputs were used in the manufacture of goods exported. The Commissioner of Central Excise (Appeals) held that the Additional Commissioner had no jurisdiction to grant the refund, as per the statute and instructions which authorized only Assistant Commissioner/Deputy Commissioner to pass such orders. The Commissioner (Appeals) set aside the refund orders solely based on the jurisdictional issue. Interpretation of Section 12E of the Central Excise Act: The appellant argued that the higher officer, like the Additional Commissioner, could exercise the powers of Assistant Commissioner or Deputy Commissioner as per Section 12E of the Central Excise Act. They contended that the Additional Commissioner being a superior officer had the authority to grant the refund. However, the Tribunal found that the Additional Commissioner did not mention exercising powers under Section 12E in the orders-in-original. Thus, the Tribunal remanded the matter back to the Assistant Commissioner/Deputy Commissioner for deciding the refund claims on merit. Validity of orders-in-original passed by the Additional Commissioner: The Tribunal noted that the Additional Commissioner did not specify in the orders-in-original that they were being passed under Section 12E of the Central Excise Act. Since the powers of granting refund are with Assistant Commissioner/Deputy Commissioner, the orders passed by the Additional Commissioner were deemed unsustainable. The Tribunal emphasized the importance of complying with statutory provisions and remanded the matter back for a fresh decision. Refund claims under Rule 5 of the CENVAT Credit Rules: The refund claims were based on the appellant's inability to utilize CENVAT credit due to exporting most of their finished goods. The Revenue contended that the refund should only be granted for inputs used in goods cleared for export. The Tribunal, while not delving into the merits of the case, emphasized the need for the refund claims to be decided on merit under Rule 5 of the CENVAT Credit Rules. The matter was remanded for a fresh decision by the appropriate authority after giving the appellant an opportunity to be heard. This judgment clarifies the jurisdictional issues regarding refund claims, the interpretation of statutory provisions, and the importance of compliance with procedural requirements in granting refunds under the CENVAT Credit Rules.
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