2017 (7) TMI 281 - AT - Central Excise

Refund claim - excise duty paid on the inputs consumed by the respondent and exported - Held that - the lower authorities have missed larger point inasmuch that the Government of India s stated policy is to encourage export and not to export taxes. In the case in hand, both the lower authorities have come to a correct conclusion that there being exports and other documents which are correlating to the refund claim filed by the appellant as duty paid on inputs, we do not find any reason to interfere in such reasoned order passed by the lower authorities - appeal dismissed - decided against appellant.

Summary

Issues involved:
Refund of excise duty paid on inputs consumed by the respondent and exported; Eligibility of a declarant unit availing SSI exemption for CENVAT credit and refund claim under Rule 5 of CENVAT Credit Rules, 2004.

Analysis:
The appeal pertains to a dispute over the refund of excise duty paid on inputs consumed by the respondent and subsequently exported. The respondent, a declarant unit availing the benefit of SSI exemption, procured inputs on duty payment for manufacturing goods exported. The Range Officer initially rejected the refund claim due to lack of details, prompting a show-cause notice. The adjudicating authority, after due process, deemed the respondent eligible for the refund under Rule 5 of the CENVAT Credit Rules, 2004. The Revenue challenged this decision, arguing that as a declarant unit, the respondent was not entitled to CENVAT credit and, therefore, not eligible for the refund procedure under Rule 5. However, the first appellate authority upheld the adjudicating authority's decision, citing a CESTAT Mumbai order that supported the refund claim for inputs used in manufacturing goods cleared for export under bond. The appellate authority emphasized the principle of not exporting taxes and the eligibility of duty paid on inputs for rebate under Rule 18 of Central Excise Rules.

The Revenue reiterated its stance that the declarant unit could not avail CENVAT credit due to SSI exemption and questioned the applicability of previous case laws. Upon reviewing the submissions and records, the Tribunal observed that the respondent indeed paid Central Excise duty on inputs, used them in manufacturing goods for export, and contended that the lower authorities correctly acknowledged the government's policy to encourage exports without exporting taxes. The Tribunal found no grounds to interfere with the reasoned decisions of the lower authorities and dismissed the Revenue's appeal.

In a reference to a different case, the Revenue relied on a Tribunal decision regarding SSI exemption denial to a manufacturer not owning the brand name. However, the Tribunal distinguished the facts of the current case, emphasizing the unique circumstances involved. Ultimately, the Tribunal concluded that the Revenue's appeal lacked merit and rejected it, affirming the lower authorities' decisions in favor of the respondent.