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TMI Blog2015 (1) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... , the substantial questions of law are answered against the revenue and thus, the appeal is devoid of any merit - Decided against Revenue. - CEA No. 11 of 2005 (O&M) - - - Dated:- 3-7-2014 - Ajay Kumar Mittal and Jaspal Singh, JJ. Shri Kamal Sehgal, Advocate, for the Appellant. Shri Vikas Behl, Sr. Advocate with Ms. Vibha Tewari, Advocate, for the Respondent. JUDGMENT This appeal has been preferred by the revenue under Section 35H(1) of the Central Excises Salt Act, 1944 (in short, the Act ) against the orders, dated 9-2-2004 [2004 (175) E.L.T. 339 (Tri.-Del.)] and 26-3-2004, Annexures P.7 and P.8 passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi (in short, the Tribunal ). On 24-1-2005, the appeal was admitted to consider the following substantial questions of law :- (a) Whether Hon ble CESTAT was legally correct in holding that cash refund of Modvat credit on inputs used for manufacture of goods exported shall be allowed in cases where the manufacturer/exporter has not tried to utilize the credit for payment of duty on the goods cleared for export or for home-consumption as stipulated under Rule 57F(13) of Central Excise Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the Commissioner (Appeals). 4. On the other hand, learned counsel for the assessee relied upon judgment of the Bombay High Court in Associated Aluminium Industries Pvt. Limited v. Union of India, 1990 (48) E.L.T. 371 and urged that the assessee was entitled for benefit of refund of Modvat credit in terms of Rules 12 and 13 of the Rules and the same was to be refunded to the respondent under Rule 57F(13) of the Rules. 5. After hearing learned counsel for the parties, we do not find any merit in the appeal. 6. It would be apposite to reproduce the relevant statutory provisions :- 12. Rebate of duty.- (1) The Central Government may, from time to time, by notification in the Official Gazette, grant rebate of - (a) duty paid on the excisable goods; (b) duty paid on materials used in the manufacture of goods; If such goods are exported outside India or shipped as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft, to such extent and subject to such safeguards, conditions and limitations as regards the class or description of goods, class or description of materials used for manufacture ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing which the rebate is granted under sub-rule (1) of Rule 12, from a factory of manufacture or warehouse or any other premises as may be approved by the Commissioner of Central Excise; (b) specify materials, removal of which without payment of duty from the place of manufacture or storage for use in the manufacture in bond of export goods, may be permitted by the Commissioner of Central Excise; (c) allow removal of excisable material without payment of duty for the manufacture of export goods, as may be specified, to be exported in execution of one or more export orders; or for replenishment of duty paid materials used in the manufacture of such export goods already exported for the execution of such orders, or both; subject to such safeguards, conditions and limitations as regards the class or description of goods, class or description of materials used for manufacture thereof, destination, mode of transport and other allied matters as may be specified in the notification which the exporter undertakes to abide by entering into a bond in the proper form with such surety or sufficient security, and under such conditions as the Commissioner approves. (2) The Central Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Rule 13 is provided under Rule 57F(13) of the Rules according to which, the manufacturer shall be allowed refund of such amounts subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification in the official Gazette. The Central Government issued notification No. 85/87-C.E., Dated 1-3-1987 as amended by Notifications No. 2/94-C.E.(N.T.), dated 24-1-1994; No. 26/95-C.E.(N.T.), dated 6-6-1995 and No. 40/95-C.E.(N.T.), dated 27-12-1995 describing the safeguards, conditions and limitations for refund of Cenvat credit allowed in inputs used in goods exported under bond. It reads thus :- [1] Refund of CENVAT Credit allowed on inputs used in goods exported under bond. - In exercise of the powers conferred by sub-rule (13) of Rule 57F of the Central Excise Rules, 1944, the Central Government hereby directs that refund of credit of specified duty allowed in respect of inputs used in or in relation to the manufacture of final products which are cleared for export under bond may be allowed subject to the safeguards, conditions and limitations, set out in the Appendix to this notification. APPENDIX 1. The goods are export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rule 57F(13) of the Rules. All the conditions required under Rule 57F(13) and notification No. 85/87-C.E., dated 1-3-1987 as amended had been satisfied i.e. export of goods under bond, utilisation of credit of inputs used to manufacture export goods for domestic clearances, inability of the assessee to utilise the Modvat credit as set out in the Modvat scheme and availability of excess credit with the assessee even thereafter. 9. The Tribunal while accepting the appeal of the assessee had recorded in its order, dated 9-2-2004, Annexure A.7 as under :- It is contended on behalf of the assessee that the view taken by the Commissioner is erroneous. Rule 12 provides for export of goods on payment of duty under claim for rebate. Under this situation, the exporter clears the finished goods for export on payment of duty and thereafter, claims rebate of the excise duty paid thereon. Further, the excise duty can either be paid by making cash deposit in the account current (PLA) or by debiting in the RG23A Part II register (Modvat credit register). Appellant further submits that Rule 13 provides for the export of goods without payment of duty on execution of a bond. Under this provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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