1996 (3) TMI 266 - AT - Central Excise

Summary

Issues: Revenue's appeal against refund of accumulated MODVAT Credit for exported goods.

The judgment involves an appeal by the Revenue against the order of the CCE (Appeals), Madras, which allowed the refund of accumulated MODVAT Credit attributable to the inputs in goods exported by the respondents. The lower appellate authority held that the circumstances, as contemplated under Rule 57F(3) and Notification No. 85/87-C.E., entitled the appellant to a cash refund due to the unutilized credit. The appellant-Collector argued that the refund could only be granted if adjustments of duty for goods cleared for home consumption were not possible. They contended that since the assessee had clearances of similar final products for home consumption, the adjustment of duty was feasible, and cash refunds were only permissible under extraordinary circumstances under the Modvat rules. The Collector (Appeals) had noted a perceived discrimination between exporters following Rule 12 and Rule 13, which was disputed by the appellant. The learned DR reiterated the grounds of appeal, emphasizing that the credit should be exhausted after utilization for duty payment on clearances for home consumption. Despite notice, no representation was made for the respondent.

The Tribunal observed that under Rule 57F(3) and Notification No. 85/87, a self-contained procedure was prescribed for granting refunds of MODVAT Credit related to exported goods. The notification specified that cash refunds should be allowed when it was not possible for the assessee to utilize the credit. In this case, it was evident that the MODVAT Credit had accumulated due to the export of goods, and the assessee could not utilize it as per the MODVAT Scheme. The notification required filing for a refund every quarter, with a reasonable time limit of three months for considering the utilization of accumulated credit for exports. The Revenue did not argue that the credit could have been utilized within this period. Consequently, the Tribunal found no fault in the reasoning of the CCE (Appeals) and dismissed the Revenue's appeal.