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Issues Involved:
1. Entitlement to refund of Modvat credit under Rule 57F(13) despite lapsing of credit under Rule 57F(17). 2. Eligibility for rebate of duty on inputs under Rule 12(1)(b) of the Central Excise Rules, 1944. Detailed Analysis: 1. Entitlement to Refund of Modvat Credit under Rule 57F(13): The appellants, engaged in the manufacture of Black & White Picture Tubes, exported 38150 pieces of the product under bond without payment of duty during the period October to December 1996. They earned Modvat credit on the inputs used in manufacturing these goods but could not utilize this credit before 1-3-1997. They filed for a refund of the credit under Rule 57F(13) on 19-3-1997. The Assistant Commissioner rejected the refund claim citing Rule 57F(17), which caused the Modvat credit to lapse on 1-3-1997. The Commissioner (Appeals) upheld this decision, leading to the present appeal. The Tribunal examined whether the appellants were entitled to a refund under Rule 57F(13) despite the credit lapsing under Rule 57F(17). Rule 57F(13) allows for the refund of credit if it cannot be utilized for duty payment on final products. Rule 57F(17) states that any unutilized credit as of 1-3-1997 would lapse and could not be used for duty payment on any excisable goods. The appellants argued that Rule 57F(13) was a special provision for Modvat credit on inputs used in export products and that the non-obstante clause in Rule 57F(17) did not override Rule 57F(13). They cited the Supreme Court's decision in AIR 1987 Supreme Court 117 and a Board's letter dated 12-12-1997, which supported their claim that lapsing of credit did not bar refund under Rule 57F(13). The Tribunal, however, held that both utilization and refund of credit required the availability of credit in the Modvat account. Since the credit lapsed on 1-3-1997, there was no credit available for refund. The Tribunal found the appellants' reliance on the non-obstante clause unconvincing, noting that the clause did not mention Rule 57F(13). Consequently, the Tribunal upheld the rejection of the refund claim. 2. Eligibility for Rebate of Duty on Inputs under Rule 12(1)(b): The appellants alternatively sought a rebate of duty on inputs under Rule 12(1)(b), which was rejected by the authorities due to non-compliance with procedural requirements. The Tribunal noted that the appellants had raised this plea consistently and that the Department did not dispute their eligibility for the rebate, only their procedural compliance. Citing the Supreme Court's decision in Formica India Division v. Collector of Central Excise [1995 (77) E.L.T. 511 (S.C.)], the Tribunal found that procedural non-compliance should not bar the substantive right to rebate. Therefore, the Tribunal remanded the matter to the adjudicating authority to examine the rebate claim on its merits and in light of the Supreme Court's decision, ensuring compliance with the principles of natural justice. Conclusion: The Tribunal upheld the rejection of the refund claim under Rule 57F(13) due to the lapsing of credit under Rule 57F(17). However, it remanded the case for consideration of the appellants' alternative plea for a rebate of duty on inputs under Rule 12(1)(b), directing the adjudicating authority to examine this plea on its merits.
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