2004 (4) TMI 168 - AT - Central Excise

Summary

Issues:
Refund denial of unutilized deemed credit for grey man-made fabrics under Notification No. 29/96.

Analysis:
The issue in this case revolves around the denial of a refund amounting to Rs. 1,72,016/- to the appellants for unutilized deemed credit in relation to grey man-made fabrics processed and exported during a specific period. The appellant argued that they were unable to utilize the credit in subsequent periods due to coming under the compounded levy scheme. The advocate contended that the conditions of Notification No. 29/96 were met, making them eligible for the refund.

On the other hand, the J.D.R. argued that the appellants had made a cash payment during the relevant quarter, suggesting that they could have utilized the unutilized credit instead of making a cash payment. The advocate for the appellants clarified that the cash payment was made under the department's direction to boost revenue and was not a voluntary choice.

After considering the arguments from both sides and examining the case records, the Tribunal found that the appellants fell within the ambit of Notification No. 29/96. Paragraph 3 of the notification explicitly states that manufacturers are entitled to a refund if the credit cannot be utilized for duty payment on final goods for any reason. Since no additional conditions or limitations were specified in the official gazette, the Tribunal concluded that the appellants should not be deprived of the refund for the deemed credit utilized in the export of grey fabrics. Consequently, the impugned order was set aside, and the appeal was allowed, granting consequential benefits to the appellants.