1997 (10) TMI 84 - CGOVT - Central Excise

Summary

Issues:
1. Refund claims rejection under Rule 57F(3) of the Central Excise Act, 1944.
2. Commissioner (Appeals) decision based on Rule 57F(1)(ii) and CBEC's clarification.
3. Grounds of appeal by the applicant Commissioner regarding non-fulfillment of conditions under Rule 57F(4).
4. Non-submission of proof of export and disclaimer of drawback.
5. Jurisdiction of the Government under Section 35EE.
6. Changes in Rule 57F(1)(ii) post Notification No. 28/95-C.E.
7. DEEC Scheme exports and proof of exports acceptance.

Analysis:
1. The case involves the rejection of refund claims by the Assistant Commissioner based on Rule 57F(3) of the Central Excise Act, 1944. The respondents had availed input Modvat credit and exported the inputs as per procedure. The rejection was due to non-utilization of inputs in the manufacture of final products, leading to non-fulfillment of Rule 57F stipulations. However, the Commissioner (Appeals) allowed the appeals based on Rule 57F(1)(ii) and CBEC's clarification, leading to the revision application by the applicant Commissioner.

2. The applicant Commissioner's grounds of appeal focused on non-fulfillment of conditions under Rule 57F(4), non-submission of proof of export, and disclaimer of drawback. The Commissioner (Appeals) decision was challenged for not addressing these points. The respondents argued that the original authority did not record findings on these issues, suggesting a review of the Assistant Commissioner's order before the Commissioner (Appeals). The Government agreed with the respondents on certain points but found the Tribunal's decision cited by the respondents irrelevant in this context.

3. The Government analyzed the changes in Rule 57F(1)(ii) post Notification No. 28/95-C.E., dated 29-6-1995. The amendment omitted the requirement for inputs to be treated as manufactured in the factory before removal. CBEC's Circular clarified that Modvat credit against export of inputs under bond can be utilized similarly to a final product. As there was no perversity in the Commissioner (Appeals) order, the Government declined to interfere.

4. Independently, the Government noted that the exports were under the DEEC Scheme, with proof of exports accepted by the proper officer. The lack of drawback claims under this scheme raised doubts about the need for proof of exports and disclaimer of drawback. The Government criticized the harassment caused by demanding original documents not in possession of the respondents without clarifying through inter-departmental correspondence.

5. Ultimately, the Show Cause Notice dated 31-7-1997 was disposed of accordingly, with the Government's decision based on the analysis of jurisdiction, Rule amendments, DEEC Scheme exports, and proof of exports acceptance.