2005 (2) TMI 190 - AT - Central Excise

Summary

Issues:
Stay of operation of orders allowing refund of unutilized credit under Rule 57AC(7) of Central Excise Rules, 1944.

Analysis:
The case involved applications for stay of operation of orders of the Commissioner (Appeals) allowing the refund of unutilized credit under Rule 57AC(7) of the Central Excise Rules, 1944. The respondents, engaged in the manufacture of copper cathode and copper rod, had filed refund claims for two periods based on their export activities using copper anode as raw material. The claims were rejected by the Asstt. Commissioner and Dy. Commissioner, citing reasons like undervaluing export products and not utilizing credit for domestic clearance and export. However, the Commissioner (Appeals) allowed the refund, leading to appeals by the Department. The Tribunal remanded the case to re-determine facts, emphasizing that inability to utilize accumulated credit on inputs used in exported goods should be verified. Upon re-examination, the Commissioner (Appeals) directed the refund of unutilized credit in cash.

The Tribunal analyzed the argument for stay in light of Rule 57AC(7), which allows for the utilization of credit on inputs used in exported products towards duty payment on goods cleared for home consumption or export. The Tribunal noted that the respondents satisfied the condition under Notification No. 35/2000, demonstrating their inability to utilize the credit against exported goods. No contrary grounds were presented in the appeals, leading the Tribunal to reject the stay applications. The Tribunal held that there was no prima facie case for staying the operation of the Commissioner (Appeals) orders allowing the refund of unutilized credit.

In conclusion, the stay applications were rejected, and the appeals were scheduled for further hearing on a specified date. The judgment highlighted the importance of verifying the inability to utilize accumulated credit on inputs used in exported goods and upheld the Commissioner (Appeals) decision to refund the unutilized credit in cash, as per the provisions of Rule 57AC(7) and relevant notifications.