2004 (3) TMI 213 - AT - Central Excise

Summary

Issues involved:
The appellant paid excise duty at a higher rate on exported consignments, leading to excess debit in the Modvat account, and the excise authorities ordered recovery of the excess amount. The appellant claimed entitlement to refund of duties paid on exported goods and inputs used in manufacturing, challenging the excise authorities' finding.

Summary:

1. Incorrect Duty Rate on Exported Consignments:
The appellant, a manufacturer of Paracetamol, paid excise duty at a rate of 20% ad valorem on exported consignments from the Modvat account, while the correct rate per Notification No. 6/94 was 10%. The appellant paid duty at the correct lower rate for goods cleared for home consumption and obtained a rebate of the duty paid on the exported consignments. The appeal contested the excise authorities' decision to recover the excess amount debited in the Modvat account.

2. Entitlement to Refund of Duties:
The appellant argued for a refund of excise duties paid on exported goods and inputs used in manufacturing, asserting that rebate entitlement is based on the actual amount of duty paid on exported goods, regardless of the correct duty rate.

3. Interpretation of Rebate Rules:
The Tribunal considered Rule 12 of the Central Excise Rules, emphasizing "rebate of duty paid on the excisable goods" and "duty paid on materials used in the manufacture of goods," rather than duty payable. The decision favored returning the actual amount of duty paid as rebate, irrespective of any erroneous payment at a higher or lower rate.

4. Appellate Authority Jurisdiction:
The Revenue argued that the Joint Secretary Revision was the appropriate appellate authority for rebate claims, contending that matters related to rebate claims were not appealable to the Tribunal. However, the Tribunal disagreed, stating that the appeal was valid as it pertained to the recovery of Modvat credit and not excess rebate paid.

5. Tribunal Decision:
Based on the interpretation of rebate rules and the appellant's claim, the Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellant's entitlement to the refund of duties paid on exported goods and inputs used in manufacturing.