2008 (9) TMI 173 - AT - Central Excise

Claims for cash refunds of unutilized credit on exports refund denied on inputs which were not consumed in same month - there is time lag between the date of receipt of the inputs, the date on which they use the particular consignment of inputs and the date of export of the final products held that refund cannot be denied on time lag in use of inputs further, benefit of concessional rate of duty u/not. 9/02 cannot be denied merely on ground that option to avail SSI exemption not exercised

Summary

Issues involved:
- Denial/restriction of part of the refund claims filed by the appellant.
- Demand of duty on waste and scrap of stainless steel.
- Imposition of penalty on the appellant.
- Appeal against demand upheld by the Commissioner (Appeals).
- Eligibility for concessional rate of duty under Notification No. 9/2002.
- Adjustment of amounts in the Cenvat account.

Analysis:

Issue 1: Denial/Restriction of Refund Claims
The appellant, a manufacturer of kitchen and household articles, exported goods and filed refund claims for the duty paid inputs not utilized due to export. The original authority reduced the refund claims due to duty payable on scrap and non-utilization of inputs in the same month. The appellant argued that the denial was for minor procedural breaches and requested the withheld amount to be refunded with interest. The Tribunal found the denial on technical grounds unjustified and ordered the withheld amount to be refunded as cash refund.

Issue 2: Demand of Duty on Waste and Scrap
Show cause notices were issued proposing a demand for duty on waste and scrap of stainless steel. The original authority confirmed the demand, and the Commissioner (Appeals) upheld it. The appellant contended that the demand was already recovered by reducing the refund amount. The Tribunal upheld the dutiability of scrap but extended the benefit of a concessional rate of duty under Notification No. 9/2002. The demand was restricted to the normal period of limitation.

Issue 3: Adjustment of Amounts in Cenvat Account
The appellant claimed refunds from the Cenvat account, and the reduced amounts were sanctioned. The Tribunal clarified that the amounts not sanctioned continued to lie in the Cenvat account and should be refunded as cash refund. The revised demand within the normal period of limitation was to be paid by debit in the Cenvat account or cash at the appellant's convenience.

The Tribunal disposed of the appeals by ordering the refund of the withheld amount, confirming the dutiability of scrap but extending the concessional rate of duty, and directing the revised demand to be paid within the normal period of limitation either by debit in the Cenvat account or in cash.