2015 (10) TMI 1982 - AT - Central Excise

Area based exemption - Refund claim of duty paid in cash - Commissioner (Appeals) excluded the reversal of CENVAT credit on inputs, cleared as such, which is part of the notification. - Held that - Refund is eligible on the specified goods appeared in annexure to the said notification, cleared from a unit located in Kutch district of Gujarat from so much of the duty of excise or the additional duty of excise, as the case may be leviable thereon, as is equivalent to the amount of duty paid by the manufacturer of goods other than the amount of duty paid by the utilising CENVAT credit under Cenvat Credit Rules, 2001. We find that refund of duty would be related to the specified goods cleared by the manufacturer. The Commissioner (Appeals) observed that value of the inputs cleared as such cannot be clubbed value of excisable goods manufactured and cleared by the assessee for arriving at the aggregate value of clearance for extending the benefit of exemption notification. We find that on plain reading of notification, there is no indication that value of the inputs cleared as such would be included in the aggregate value of clearance for the purpose of availing the benefit of exemption notification. - there is no reason to interfere the order of Commissioner (Appeals). - Decided against Revenue.

Issues:
Refund claim under Notification No. 39/2001-CE dated 31.07.2001 for excisable goods viz. Block Board and Veneer.

Analysis:
The case involved a refund claim by the Respondent for excisable goods manufactured falling under specific headings of the Central Excise Tariff Act, 1985, availing the benefit of Notification No. 39/2001-CE. The Respondent filed a refund claim of &8377; 9,68,692/- for a specified period, out of which the adjudicating authority sanctioned &8377; 6,39,963/-. The Revenue appealed the decision before the Commissioner (Appeals), who rejected the appeal, leading to the current appeal before the Tribunal.

The main contention raised by the Revenue was that the Commissioner (Appeals) erroneously excluded the reversal of CENVAT credit on inputs cleared as such, which according to the Revenue, should be part of the calculation for the refund claim. The Revenue argued that the total value of clearance of final products should include inputs removed as such, waste, bye-product, or goods falling under the Central Excise Tariff Act. However, upon scrutiny of the notification, the Tribunal found that the refund was eligible only for specified goods cleared by the manufacturer, and there was no indication that the value of inputs cleared as such should be included in the aggregate value of clearance for availing the exemption under the notification.

The Commissioner (Appeals) had observed that the value of inputs cleared as such cannot be clubbed with the value of excisable goods manufactured and cleared by the assessee for extending the benefit of the exemption notification. The Commissioner's findings emphasized that only the value of the specified excisable goods manufactured and cleared by the appellant should be considered for computing the total aggregate value of clearance as per the notification. The Tribunal concurred with the Commissioner's interpretation, stating that the exclusion of the value of inputs cleared as such would keep the appellants within the exemption limit, making them eligible for the refund claim. Consequently, the Tribunal upheld the Commissioner (Appeals) decision and rejected the Revenue's appeal.

In conclusion, the Tribunal found no reason to interfere with the order of the Commissioner (Appeals) regarding the exclusion of the value of inputs cleared as such from the calculation for the refund claim under Notification No. 39/2001-CE. Therefore, the appeal filed by the Revenue was rejected, affirming the decision in favor of the Respondent.

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