2007 (9) TMI 611 - HC - Central Excise

Summary

Issues involved: Impugning a Judgment and Order, Cenvat credit claim, Export rebate claim, Allegation of fraudulent claim of Cenvat credit.

Impugning a Judgment and Order: The appellant challenged a Judgment and Order passed by the Customs, Excise & Service Tax Appellate Tribunal, which set aside an order of the Commissioner of Central Excise. The Tribunal allowed the appeal, leading to the current appeal before the High Court.

Cenvat credit claim: The case involved M/s. Finolex Cables Ltd., manufacturers of jelly filled telephone cables and electric wires, obtaining raw material from their subsidiary for local manufacture and export. Cenvat credit was claimed for raw material used in local manufacture, and export rebate was claimed under Central Excise Rules. The Tribunal allowed the appeal based on the fact that there was no revenue loss to the Department as Cenvat credit for exported goods had been refunded.

Export rebate claim: The export rebate claim was made under Rules 18 and 19 of the Central Excise Rules, 2002. It was noted that the question of claiming export rebate arises when the goods are actually exported, and in this case, there was no dispute regarding the quantity of goods exported or the claim for rebate on non-exported goods.

Allegation of fraudulent claim of Cenvat credit: The contention was raised that the initial claim of Cenvat credit was fraudulent as it was alleged that the intention was to claim credit on exported goods. However, it was found that a part of the raw material was indeed utilized for manufacture, and the mere procurement of excess raw material does not automatically render the claim of Cenvat credit as fraudulent.

Conclusion: The High Court found no substance in the appeal and dismissed the same, upholding the decision of the Tribunal regarding the Cenvat credit and export rebate claims made by the respondent company.