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2012 (9) TMI 305 - CGOVT - Central ExciseRefund export of goods applicant a EHTP Unit which exported certain consignments on payment of duty and filed rebate claims which were rejected by the lower authorities that as the applicant being EHTP Unit, a export oriented undertaking, are not required to pay duty as per provisions of Section 5A(1) of Central Excise Act Held that - Government cannot retain the amount collected without authority. Applicant has also requested that at least the Cenvat credit may be allowed to be recredited in their cenvat account - amount so paid by the applicant is to be treated as voluntary deposit with department and same is to be returned the way it was initially paid - Government directs that the said excess paid amount may be allowed to be recredited in their Cenvat Credit Account
Issues Involved:
1. Eligibility of EHTP units for rebate claims under Central Excise Rules. 2. Applicability of Notification No. 24/2003-C.E. to EHTP units. 3. Conditions of exemption under Section 5A of the Central Excise Act, 1944. 4. Treatment of excess duty paid and its recredit in the CENVAT account. Issue-wise Detailed Analysis: 1. Eligibility of EHTP Units for Rebate Claims: The applicant, an EHTP unit, exported goods and filed rebate claims under Rule 18 of the Central Excise Rules, 2002. The claims were rejected by the adjudicating authority on the grounds that the applicant was not required to pay duty due to the full exemption provided to EOUs/EHTPs under Notification No. 24/03-C.E., dated 31-3-2003. The department contended that no tax can be collected without the authority of law, and thus no rebate claim could be sanctioned for the amount debited in the CENVAT account for goods exported by 100% EOU/EHTP units. 2. Applicability of Notification No. 24/2003-C.E. to EHTP Units: The applicant argued that Notification No. 24/2003-C.E. does not cover EHTP units and that the Customs and Central Laws do not prescribe a common procedure for EOUs, EHTPs, and STPs. They contended that the notification involves conditions post-removal of goods from the factory gate, which cannot come under the purview of absolute exemption granted as per Section 5A of the Central Excise Act, 1944. The government noted that the EHTP unit is required to export its entire production, and the exemption from payment of duty under Notification No. 24/2003-C.E. is applicable to EHTP units, treating them as equivalent to EOUs. 3. Conditions of Exemption under Section 5A of the Central Excise Act, 1944: The government observed that Notification No. 24/2003-C.E. provides an absolute, unconditional exemption from the whole of duty for goods manufactured in an EOU, including EHTP units, except when brought to any other place in India. The exemption is absolute and unconditional, falling under Section 5A(1A) of the Central Excise Act, 1944, which states that when an exemption is granted absolutely, the manufacturer shall not pay the duty of excise on such goods. The government found no legislation or higher judicial citations differentiating EHTP units from EOUs in this context. 4. Treatment of Excess Duty Paid and Its Recredit in the CENVAT Account: The applicant requested that the excess duty paid be recredited to their CENVAT account. The government observed that the amount paid by the applicant is to be treated as a voluntary deposit with the department and should be returned in the same manner it was initially paid. Therefore, the government directed that the excess paid amount be allowed to be recredited in the applicant's CENVAT Credit Account. The impugned order-in-appeal was modified to this extent. Conclusion: The revision application was disposed of with the direction to recredit the excess paid amount in the applicant's CENVAT Credit Account, affirming the equivalent status of EHTP units to EOUs and the applicability of Notification No. 24/2003-C.E. for absolute exemption from duty.
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