2005 (10) TMI 108 - HC - Central Excise

Summary

Issues:
1. Interpretation of conditions in Notification No. 85/87-C.E.
2. Cash refund of accumulated modvat credit under Rule 96ZQ.
3. Compliance with the judgment of Customs, Excise & Service Tax Appellate Tribunal.

Issue 1: Interpretation of conditions in Notification No. 85/87-C.E.
The appellant revenue raised questions regarding the mandatory nature of conditions in Notification No. 85/87-C.E. and whether non-fulfillment would lead to rejection of refund claims. The Tribunal confirmed the Commissioner (Appeals) order, emphasizing that the manufacturer/exporter is entitled to cash refund of accumulated deemed credit under specific circumstances, such as inability to utilize the credit due to changes in duty payment mechanisms. The Tribunal held that the phrase "for any reason" in the notification widens the scope for refund situations beyond mere non-utilization. The Commissioner (Appeals) rejected the objection of the adjudicating authority regarding the limitation on refund claims based on Notification No. 85/1987, stating that refunds could be claimed in specific scenarios like the introduction of a compounded levy scheme for textiles.

Issue 2: Cash refund of accumulated modvat credit under Rule 96ZQ
The Tribunal affirmed that the manufacturer/exporter can claim a cash refund of accumulated deemed credit when unable to adjust it towards duty payments on goods cleared for home consumption or export. The introduction of the compounded levy scheme for textiles mandated central excise duty payments in cash, restricting the use of accumulated credit. The Tribunal noted that the compounded levy scheme did not specify the lapse of accumulated deemed credit, allowing refunds under Notification No. 29/1996 in cases where the credit could not be utilized for any reason.

Issue 3: Compliance with the judgment of Customs, Excise & Service Tax Appellate Tribunal
The Tribunal dismissed the relevance of a specific decision not cited during the proceedings, stating that it cannot be considered an error on the part of the Tribunal for not following a judgment that was not presented before it. The Tribunal emphasized the importance of citing relevant decisions during the hearing to support arguments. The concurrent findings of the Commissioner (Appeals) and the Tribunal indicated no legal flaws in the impugned order, leading to the dismissal of the appeal due to the absence of any substantial question of law arising from the case.