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2007 (4) TMI 545 - AT - Central Excise
Issues involved: Appeal against the order of the Commissioner (Appeals) upholding the original authority's decision to disallow Cenvat credit on imported inputs that were re-exported due to quality issues.
Summary: The appellant availed Cenvat credit on inputs at the time of import, but some rejected inputs were re-exported to the supplier, involving a credit of Rs. 69,558. The original authority and Commissioner (Appeals) held that the credit was wrongly availed and imposed penalties under Rule 3(4). The appellant claimed benefit under Circular No. 283/117/96-CX and Circular F.No. 345/2/2000-TRU, citing the Tribunal's decision in C.C.E., Jaipur-I v. RFH Metal Castings (P) Ltd. The appellant argued that re-exported goods should qualify for drawback under Section 74 of the Customs Act. The Tribunal considered that the re-exported goods were eligible for drawback under Section 74, as the importer had to re-export due to unavoidable circumstances. The Circulars did not restrict benefits to domestically procured inputs, as clarified in para 8 of the Board's Circular dated 29-8-2000. Based on the above considerations and the precedent set by the Tribunal in RFH Metal Castings (P) Ltd., the appeal was allowed, granting consequential relief to the appellant.
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