2023 (10) TMI 1251 - AT - Central Excise

Recovery of credit of duty paid on inputs precluding entitlement to the benefit of notification no. 30/2004-CE dated 9th July 2004 - manufacture of several articles of wool and of polyester - recovery pertaining to entitlement to notification no. 30/2004-CE dated 9th July 2009 which was sought to be interpreted as intended only for assessees who lacked specified facility which to the appellant could not claim - refusal to entertain application of refund of ₹ 1,19,37,987 remitted as deposit for July 2004 to February 2009 during pendency of dispute. Recovery of credit of duty paid on inputs precluding entitlement to the benefit of notification no. 30/2004-CE dated 9th July 2004 - HELD THAT - It is not open to the authority empowered under section 11B of Central Excise Act, 1944 to dispose off a claim for refund on grounds of such being premature in any circumstance whatsoever. As the competent authority has not considered the eligibility for refund except at the threshold, it would only be appropriate to restore the claim before the original authority for fresh disposal. Dis-entitlement of the appellant to benefit of notification no. 30/2004-CE dated 7th July 2004 for non-compliance with the substantive condition of eligibility owing to which demand of ₹ 22,07,315 was confirmed in relation to availment of exemption for the period from September 2008 to February 2009 - HELD THAT - The remand order of the Tribunal is specific as is the report of the jurisdictional central excise authorities. However, the order of the original authority that was before the first appellate authority to culminate in the impugned order predates the remand ordered by the Tribunal and the defence thereof was not before the original, or first appellate, authority. Eligibility to benefit of notification no. 30/2004-CE dated 9th July 2004 owing to reversal of credit - HELD THAT - The factual aspects of eligibility both by reversal of CENVAT credit as well as existence of facility for manufacture of staple fibre in the light of decisions of the Tribunal have not been examined by the lower authorities. With the claim for refund restored to the original authority and with these two aspects having to be examined afresh, the issues would have to be go back for re-adjudication. Accordingly, the impugned order is set aside and all the disputes restored to the original authority for a fresh determination.

Summary

Issues involved:
The judgment concerns multiple issues including the eligibility for benefit of notification no. 30/2004-CE, entitlement to refund, and dis-entitlement of the appellant to the benefit of the notification.

Eligibility for Benefit of Notification no. 30/2004-CE:
The appellant, a manufacturer of wool and polyester articles, availed CENVAT credit on inputs while clearing export goods under rebate procedure. The eligibility for the benefit of notification no. 30/2004-CE was questioned due to the appellant's credit of duty paid on inputs, leading to a dispute regarding the entitlement to the notification. The issue was related to compliance with the substantive condition of eligibility, resulting in a demand being confirmed for a specific period. The matter was remanded for further adjudication to ascertain the eligibility based on the facility for manufacturing staple fiber, and the Tribunal emphasized the need for a fresh determination by the adjudicating authority.

Entitlement to Refund:
The judgment also addressed the appellant's claim for a refund of a substantial amount remitted as a deposit during a dispute period. The Tribunal highlighted the statutory impropriety in rejecting the refund claim as premature, emphasizing that the claimant's pursuit of appellate remedies indicated a lack of willingness to return the claim. The Tribunal set aside the rejection of the refund claim, directing the original authority to decide on the refund afresh in accordance with the law, stressing the importance of considering taxability and procedural aspects in refund determinations.

Dis-Entitlement of Appellant to Benefit of Notification no. 30/2004-CE:
The issue of dis-entitlement of the appellant to the benefit of notification no. 30/2004-CE for non-compliance with eligibility conditions was also examined. The appellant contended that lack of facility for manufacturing specific goods rendered them eligible for the notification, citing relevant judgments. The dispute required verification by the adjudicating authority, and the Tribunal emphasized the need for a fresh adjudication considering the factual aspects of eligibility and the facility for manufacturing staple fiber.

In conclusion, the judgment addressed various complex issues related to the eligibility for notification benefits, entitlement to refunds, and compliance with substantive conditions. The Tribunal emphasized the need for thorough examination and fresh adjudication by the competent authority to ensure a fair and accurate determination in each dispute.