2001 (5) TMI 228 - AT - Central Excise

Issues Involved:
1. Whether the appellants were entitled to a refund of the amount of credit under Rule 57F(13) read with Rule 57F(17) as on the date of the refund application.
2. The applicability of the lapsing provision under Rule 57F(17) to the refund claim.
3. The alternative plea of entitlement to rebate of duty on inputs under Rule 12(1)(b) of the Central Excise Rules, 1944.

Issue-wise Detailed Analysis:

1. Entitlement to Refund under Rule 57F(13):
The appellants, engaged in the manufacture of Black & White Picture Tubes, exported 38150 pieces of the product under bond without payment of duty during October to December 1996. They filed an application for a refund of the amount under Rule 57F(13) on 19-3-1997. The jurisdictional Assistant Commissioner rejected the refund claim on the ground that the Modvat credit had lapsed on 1-3-1997 under Rule 57F(17). The Commissioner (Appeals) upheld this decision. The Tribunal had to decide if the appellants were entitled to a refund of the credit earned before 1-3-1997 on inputs used in the manufacture of exported goods.

2. Applicability of Lapsing Provision under Rule 57F(17):
Rule 57F(13) allows for the refund of credit if it cannot be utilized for the payment of duty on any final products. However, Rule 57F(17) states that any credit of specified duty lying unutilized on 1-3-1997 with manufacturers of Black & White Picture Tubes shall lapse. The appellants argued that the non-obstante clause in Rule 57F(17) did not affect sub-rule (13), and thus, they were entitled to a refund. The Tribunal, however, held that the refund of the credit amount is contingent on the availability of credit in the Modvat account. Since the credit had lapsed on 1-3-1997, no refund could be granted after that date. The Tribunal found that the departmental authorities rightly rejected the refund claim filed after 1-3-1997.

3. Alternative Plea for Rebate under Rule 12(1)(b):
The appellants made an alternative plea for a rebate of duty on inputs under Rule 12(1)(b) of the Central Excise Rules, 1944. The departmental authorities rejected this plea on procedural grounds. The Tribunal noted that the appellants had raised this plea as early as in their reply to the show-cause notice and reiterated it before the lower appellate authority and in the present appeal. The Tribunal referenced the Supreme Court's decision in Formica India Division, which allowed compliance with procedural requirements at a later stage. The Tribunal remanded the matter to the adjudicating authority to examine the plea for a rebate on its merits and pass orders in accordance with the law and principles of natural justice.

Conclusion:
The Tribunal upheld the orders of the departmental authorities rejecting the refund claim under Rule 57F(13) due to the lapsing of credit on 1-3-1997. However, it remanded the matter to the adjudicating authority to consider the appellants' alternative plea for a rebate of duty under Rule 12(1)(b), in light of the Supreme Court's decision in Formica India Division. The appeal was disposed of with these directions.

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