2000 (4) TMI 276 - AT - Central Excise

Summary

Issues:
1. Irregular availing of Modvat credit on inputs used in the production of finished goods.
2. Rejection of refund claim by the Assistant Commissioner and Commissioner (Appeals) based on time-barred under Section 11B of the Central Excise Act, 1944.

Issue 1: Irregular availing of Modvat credit on inputs used in the production of finished goods:

The appellants held a value-based advance license under Notification No. 203/92-Cus., dated 19-5-1992, which prohibited obtaining input stage credit under Rule 56A or 57A of the Central Excise Rules 1944. Despite this condition, the appellants availed credit on inputs used in the production of subsequently exported finished goods. They voluntarily reversed and debited an amount of Rs. 1,52,441/- on specific dates. A Public Notice issued by the Commissioner, Central Excise, Chandigarh prescribed a formula for quantifying irregularly availed Modvat credit under the DEEC/VABAL scheme, including an interest component. The appellants calculated the irregularly availed credit and interest at Rs. 1,07,282/-. Subsequently, they filed a refund claim of Rs. 52,012/-, out of which only Rs. 45,159/- was deemed admissible. The Assistant Commissioner of Central Excise, Ludhiana rejected their claim as time-barred under Section 11B of the Central Excise Act, 1944. This decision was upheld by the Commissioner (Appeals), Chandigarh through an Appellate Order dated 11-6-1999.

Issue 2: Rejection of refund claim based on being time-barred under Section 11B of the Central Excise Act, 1944:

In their appeal, the appellants contended that they reversed the Modvat credit to avail the exemption under Notification No. 203/92-Cus., dated 19-5-1992, against duty-free imports for exports on a value-based advance license. They argued that they had already reversed an amount exceeding the requirement specified in the Public Notice issued by the Commissioner of Central Excise, Chandigarh. The appellants claimed that they had met the obligations set forth in the Public Notice and were entitled to a refund of the excess amount paid. However, the refund claim was rejected on the grounds of being time-barred under Section 11B, as the claim was filed beyond the stipulated six-month period from the date the amounts were reversed/paid. The Tribunal found no merit in the appeal and consequently rejected it.

This detailed analysis of the judgment highlights the irregular availing of Modvat credit by the appellants and the subsequent rejection of their refund claim due to being time-barred under Section 11B of the Central Excise Act, 1944.