1996 (8) TMI 232 - AT - Central Excise

Summary

Issues:
Claim for refund of duty based on missed availment of Modvat credit at a higher rate.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Mumbai involved a claim for refund of duty amounting to Rs. 13,894.50 by the Respondent. The Respondent contended that they were eligible to avail of Modvat credit at a higher rate but had utilized the credit at a lower rate, resulting in a claim for refund. The Collector (Appeals) had set aside the order of the Adjudicating Authority and granted the refund, which was challenged by the Revenue in this appeal.

The Revenue argued that the duty paid by the Respondent was proper, and there was no excess payment made. They contended that the Respondent could not claim a refund based on the missed availment of higher notional credit under the Modvat scheme. On the other hand, the Respondent's Advocate submitted that they had initially sought adjustment in their RT12 return for the higher credit but later filed a refund claim when there was no response. The Advocate argued that the denial of the credit at a later date by the Adjudicating Authority was incorrect, citing judicial pronouncements supporting the claim for refund.

The Tribunal noted that there was no explicit request from the Respondent to avail of credit at a notionally higher rate in their refund claim or covering letter. While acknowledging that the Adjudicating Authority's observation on subsequent claim of higher credit was not correct, it was deemed irrelevant to the current appeal regarding the refund claim. The Tribunal emphasized that there was no provision in the Act or Rules for granting a refund based on missed availment of Modvat credit, and the proper course for the Respondent was to take credit at the appropriate time as supported by legal precedents.

Ultimately, the Tribunal held that the claim for refund was misconceived as there was no excess duty paid, and the Collector (Appeals) order granting the refund was not legally sustainable. Refund, according to the Tribunal, pertains to excess duty paid and does not encompass cases of missed availment of credit under the Modvat Scheme. Therefore, the Tribunal set aside the order of the Collector (Appeals) and restored the order of the Assistant Collector, allowing the appeal by the Revenue.