2014 (12) TMI 996 - CGOVT - Central Excise

Denial of rebate claim - Rule 18 of the Central Excise Rules, 2002 read with Notification No. 19/2004-Central Excise(NT) dated 06.09.2004 - area based exemption under Notification 56/2002 & 57/2002-CE both dated 14.11.2002 - availment of cenvat credit on the basis of bogus invoices issued by the J&K based units and have utilized the same towards payment of duty for final products under the rebate claim - Held that - Government finds that. para 36 of copy of order-in-original No.29/Adds. Comm-IM-11/2011 dated 31.3.2011 mentions show cause, notice bearing C.NO.N-CE(9)CP, Ansar/M-IF/09/06 dated 12.9.2007 .,which pertains to demand of fraudulently availed credit from November 2005 to 31.3.2006. The show cause notice C.No.W-CE(9)CP/Mentha Enquiry/08/0&/Pt.99Af1f.19 dated 15.1.2010 pertains to period April 2006'to March 2009. Commissioner (Appeals) has rejected the appeals of the applicant by holding the said order-in-original dated 31.3.2011, SCN dated 15.1.2010 has been adjudicated and the appeal filed by the applicant against order-in-original dated 31.3.2011 has been rejected by the Commissioner (Appeals) and as such, the order-in-original of Additional Commissioner confirming the demand of fraudulent availment of cenvat credit has been upheld. Now, since there has been substantial change in facts and circumstances of the case due to aforesaid factual infirmities, the orders of Commissioner (Appeals) the case due to aforesaid factual infirmities, the orders of Commissioner (Appeals) based on such factual infirmities become infructuous and hence, liable to be set aside on this count only, without going into further merits of these cases. Under such circumstances, the interest of justice demands that the cases may be remanded back to appellate authority to decide the same afresh on the basis of correct factual position. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Denial of rebate claims based on alleged irregularity in availing CENVAT credit.
2. Discrepancies in the show cause notices and orders-in-appeal.
3. Decision of the appellate authority in favor of the department based on fraudulent availment of CENVAT credit.
4. Appeal challenging the rejection of rebate claims and the premature sanction of rebates.
5. Interpretation of rules regarding payment of duty and its implications on rebate claims.
6. Jurisdiction of different authorities in hearing appeals related to rebate claims and irregular CENVAT credit.

Issue 1: The revision applications were filed by M/s Ansar Chemicals against the rejection of rebate claims due to alleged irregularity in availing CENVAT credit. The applicant had exported goods and filed rebate claims, but the adjudicating authority rejected the claims on the basis of alleged bogus invoices used to avail CENVAT credit. The Commissioner (Appeals) initially decided in favor of the applicant, but revision applications were filed, leading to a decision in favor of the department based on fraudulent CENVAT credit availment.

Issue 2: The applicant pointed out discrepancies in the show cause notices and orders-in-appeal, highlighting factual inaccuracies. The government observed these discrepancies and found that the orders-in-appeal were based on incorrect factual positions, rendering them infructuous. The cases were remanded back to the appellate authority for a fresh decision based on the correct factual position.

Issue 3: The appellate authority's decision in favor of the department was based on the fraudulent availment of CENVAT credit. The government set aside the impugned orders and directed a fresh decision by the appellate authority, emphasizing the importance of affording reasonable opportunities of hearing to the parties involved.

Issue 4: The applicant challenged the rejection of rebate claims and the premature sanction of rebates. The applicant argued that the duty paid from CENVAT credit account should be deemed as paid under the Excise Rules, thus making the rebate claims valid. The government considered the arguments but focused on the discrepancies in the factual positions, leading to the decision to remand the cases for a fresh decision.

Issue 5: The interpretation of rules regarding payment of duty and its implications on rebate claims was crucial in this case. The applicant emphasized that the duty paid on export goods from the CENVAT credit account should be considered valid under the Excise Rules, supporting the admissibility of rebate claims. The government acknowledged these arguments but prioritized the correction of factual inaccuracies before delving into the merits of the cases.

Issue 6: The jurisdiction of different authorities in hearing appeals related to rebate claims and irregular CENVAT credit was highlighted by the applicant. The applicant argued that the authority of the Joint Secretary (RA) of the Government of India would become redundant if the issue of irregular CENVAT credit was not conclusively decided by the CESTAT or the Hon'ble Supreme Court. The government considered these jurisdictional aspects but focused on rectifying the factual discrepancies before proceeding with the cases.