2015 (6) TMI 191 - AT - Central Excise

Denial of refund claim - duty on inputs used for export goods - appellant has not taken any credit in RG23 A Part II of the input received - appellant is not an independent exporter - Tribunal has remanded matter back only for the purpose to ascertain the fact that whether the export of goods effected through U.K. Paints has been made under DEEC scheme or not as in such a situation MODVAT Credit cannot be availed - Held that - appellant has procured inputs on which duty has been paid and no Cenvat credit has been taken by the appellant. The said inputs have been used in the manufacture of export goods which have been exported through merchant exporter and the said goods have been exported under Bond. As the input is used in the process of manufacture of final product therefore the appellant is entitled to take Cenvat credit thereof and as the appellant has not taken Cenvat credit of duty paid on the inputs consequently the appellant is entitled for refund of duty paid on the inputs. Therefore, appellant is entitled for refund claim. - Decided in favour of assessee.

Summary

Issues:
- Denial of refund claim under notification No. 85/87-CE dated 01.03.1987 for export of Detergent Powder under Bond to USSR.
- Rejection of refund claim due to non-compliance with conditions of the Import-Export Policy 1990-93.
- Rejection of refund claim based on the assertion that goods exported through a specific entity were not made out of imported materials under the DEEC Scheme.
- Dispute regarding the eligibility of MODVAT credit and refund claim for excise duty paid on inputs used in the exported goods.

Analysis:
1. The appellant's refund claim under notification No. 85/87-CE for exporting Detergent Powder to USSR was initially rejected due to the absence of credit in RG23 A Part II for refund claim, as no balance was available for refund. Subsequent rejections were based on non-compliance with Import-Export Policy conditions and doubts about the utilization of imported materials in the exported goods.

2. The Tribunal remanded the matter multiple times to ascertain whether the export through a specific entity was under the DEEC Scheme, as MODVAT credit eligibility was contingent on this factor. The lower authorities failed to adequately address this crucial aspect, leading to prolonged adjudication.

3. The appellant argued that the claim did not entail double benefits, citing precedents like CCE, Kanpur Vs Meghdoot Pistons (P) Ltd. and CCE, Chandigarh Vs Oswal Agro Mills Ltd. These cases clarified that MODVAT credit for excise duty on inputs did not overlap with drawback benefits related to customs duties, supporting the appellant's claim for a refund.

4. Referring to the decisions in the cited cases, the Tribunal found that the appellant had not availed Cenvat credit for duty paid on inputs used in manufacturing the exported goods. As the inputs were essential in the production process and no Cenvat credit was claimed, the appellant was deemed eligible for the refund of excise duty paid on the inputs.

5. Consequently, the Tribunal allowed the appeal, recognizing the appellant's entitlement to the refund claim. The judgment emphasized the appellant's adherence to the relevant rules and the absence of any overlapping benefits, ultimately granting the refund with consequential relief.

This detailed analysis highlights the procedural history, legal interpretations, and factual considerations leading to the Tribunal's decision in favor of the appellant's refund claim.