2021 (7) TMI 98 - AT - Central Excise

100% EOU - Refund claim - rejection on the ground that goods were exported after claiming drawback, doubt was also expressed if the appellant have exported the goods lying in stock on the date of debonding - HELD THAT - Admittedly the appellant have exported 448 units of handicraft on 30.07.2015, within a week after the date of debonding being 27.07.2015 when only 153 units were lying in stock. Thus, the refund claim have been rejected on presumptions and assumptions that such 153 units may not have been included in the exported units as there has been further production of 448 units on 28-29.07.2015. Such presumption is drawn without any adverse finding or any adverse material on record. In this view of the matter, it is held that the appellant have exported 153 units lying in stock on the date of debonding. Accordingly, the impugned order is set aside. It is held that the appellant is entitled to refund of the duty of ₹ 7,22,290/-. The Adjudicating Authority is directed to refund this amount alongwith interest from 18.08.2016 till the date of refund @ 12% p.a. - appeal allowed - decided in favor of appellant.

Issues:
1. Refund claim rejection based on export after claiming drawback.
2. Allegation of procedural violations in the refund claim process.
3. Export of goods lying in stock at the time of debonding.
4. Adjudication of refund claim based on complete documents provided.
5. Applicability of previous tribunal rulings on similar cases.

Issue 1: Refund claim rejection based on export after claiming drawback

The appellant, a 100% EOU, paid duty on unsold finished goods at the time of debonding and subsequently exported them. The refund claim was rejected by the Court below, citing doubts about the exported goods. The Adjudicating Authority raised concerns about the appellant claiming drawback and rejected the refund claim on this basis, beyond the scope of the show cause notice. The Commissioner (Appeals) noted incomplete document submission during the initial refund claim filing, leading to doubts about the export of goods from stock at debonding. The appellant contested this rejection, stating that the export occurred after debonding and duty payment, seeking a refund of the duty paid.

Issue 2: Allegation of procedural violations in the refund claim process

The appellant argued that the Court below rejected the refund claim on surmises without clear reasoning. They provided complete documents, including ER-I, shipping bill, export promotion invoice, and bill of lading, to support the export of finished goods from stock at debonding. The appellant exported goods soon after debonding, paying duty on the stock at that time. They referenced a Tribunal ruling in a similar case to support their position that procedural violations should not hinder refund claims when goods are exported.

Issue 3: Export of goods lying in stock at the time of debonding

The Tribunal found that the appellant exported 448 units of handicrafts shortly after debonding, including the 153 units that were in stock at the time. The rejection of the refund claim was deemed based on presumptions without adverse findings or material evidence. The Tribunal held that the appellant indeed exported the goods from stock at debonding and was entitled to a refund of the duty paid.

Issue 4: Adjudication of refund claim based on complete documents provided

The Tribunal considered the documents submitted by the appellant, verifying the export of goods from stock at debonding. The appellant's compliance with document submission requirements and the timing of the export post-debonding were crucial in overturning the refund claim rejection. The Tribunal emphasized the lack of adverse findings or material to support the rejection, leading to the decision in favor of the appellant.

Issue 5: Applicability of previous tribunal rulings on similar cases

The appellant relied on previous Tribunal rulings in similar cases to support their claim for a refund. Reference was made to cases where duty demands were rejected when goods were exported before the final debonding order. The Tribunal considered these precedents, along with the appellant's specific circumstances and document evidence, in allowing the appeal and granting the refund with interest.

In conclusion, the Tribunal allowed the appeal, setting aside the impugned order and directing the Adjudicating Authority to refund the duty amount with interest. The decision was based on the appellant's successful export of goods from stock at debonding, supported by complete document submission and relevant legal precedents.

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