2005 (10) TMI 29 - HC - Central Excise

Non-utilization of deemed credit by exporter because Govt introduced compounded levy scheme on textiles from 15/12/1998 as pr new scheme excise duty could only be paid in cash & not by utilizing the deemed credit Not 29/96 permits refunding of credit where exporter is not able to utilize the credit Tribunal has recorded that merely because the relevant quarter was not specified in the refund claim, it could not be a ground to reject the claim refund allowed

Summary

Issues:
1. Interpretation of conditions in Notification No.85/87-CE for refund claim rejection.
2. Cash refund of accumulated modvat credit under rule 96ZQ.
3. Consistency of Tribunal's order with a previous judgment.

Analysis:
1. The appellant revenue raised questions regarding the mandatory nature of conditions in Notification No.85/87-CE for refund claim rejection. The Tribunal confirmed the Commissioner (Appeals) order, stating that the respondent, an assessee who exported goods, was entitled to deemed modvat credit. The Tribunal found that the manufacturer/exporter could claim cash refund of accumulated deemed credit if unable to utilize it for duty payment due to the introduction of a compounded levy scheme. The Tribunal held that the objection of the adjudicating authority based on notification No.85 of 1987 was invalid, as the refund claim could be made when the balance of accumulated deemed credit could not be utilized due to the new scheme.

2. The Tribunal also noted that the compounded levy scheme did not specify that the balance of accumulated deemed credit would lapse on a particular date, thereby allowing for refund in such cases. The Tribunal further emphasized that a mere omission of specifying the relevant quarter in the refund claim was a curable defect and not grounds for rejection. The Tribunal's decision highlighted the widened scope for refund situations under the phrase 'for any reason' in Notification No.29 of 1996.

3. Regarding the inconsistency with a previous judgment, the Tribunal clarified that since the referenced decision was not presented during the proceedings, it could not be considered an error on the Tribunal's part for not following it. Both the Commissioner (Appeals) and the Tribunal had concurred on the findings, indicating no legal infirmity in the Tribunal's order. Consequently, the appeal was dismissed based on the lack of substantial legal questions arising from the case.