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2017 (8) TMI 1038 - CESTAT NEW DELHI100% EOU - Refund claim - N/N. 24/2003-C.E., dated 31-3-2003 - appellant erroneously paid duty on export items - Held that: - The said exemption which is unconditional has to be followed by the EOU. Reference can be made to the decision of Hon’ble Rajasthan High Court in Vanasthali Textiles Industries Ltd. v. Union of India [2014 (9) TMI 224 - RAJASTHAN HIGH COURT]. Accordingly, the view of the Original Authority that the appellants are not eligible for rebate claim in terms of Rule 18 of Central Excise Rules, 2002 is correct. Regarding clearance of export goods under ARE-1 on payment of duty and thereafter filing of rebate claims the impugned order did not elaborate as to how such a thing was not examined and correct action taken by the Jurisdictional officers in control of EOU. In fact, the impugned order states the assessee did a mistake and deposited the amount voluntarily without ever mentioning how such rebate was examined and sanctioned by the Jurisdictional officer. Regarding the availment of Cenvat credit of ₹ 76,72,000/-, we note that the whole issue cropped up only because of irregularity of the procedure followed by the appellant in exporting the goods on payment of duty in terms under various ARE-1s. Surprisingly, the Revenue become party to such action as the ARE-1s and the claims were examined and considered by the Jurisdictional officers. Had the appellant being given a proper instruction on the non-admissibility of export under claim for rebate, the question of paying duty on export goods would not have arisen? Admittedly, the credit now suo motu availed by the appellant is the amount they have already discharged on the export consignments. The action of the appellant in availing re-credit of duty paid on export goods is without support of law. The fact remains that the appellant should not have paid any duty on such exports. The Department also should not have processed the ARE-1 applications and thereafter the rebate claims. The whole blame was sought to be placed on the erroneous action of the appellant. Admittedly, if the credits on the inputs were rightly taken by the appellant, the same cannot be taken out of their books simply on the ground that the amount was debited by them on export of goods under claim for rebate. The credit on inputs available in the books of the appellant is rightly eligible for refund under Rule 5 subject to verification of quantification. It is not correct on the part of the lower authorities to deny re-credit of improperly debited credit on export of goods and at the same time reject the appellant’s claim under Rule 5 on the ground that there is no balance in the credit account. This actually puts the appellant in no win situation with reference to legitimately available credit on inputs and their further right to claim benefit out of the same. The matter has to go back to the Original Authority to examine all the above-mentioned issues and take a holistic view about correctness of credit initially taken by the appellant on various inputs and the benefit accruing on such inputs to be paid to the appellant in terms of applicable provisions of law, more specifically Rule 5 of Cenvat Credit Rules, 2004 - appeal allowed by way of remand.
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