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2010 (12) TMI 11 - SC - Central ExciseModvat / Cenvat Credit - export - availment of credit while claiming duty drawback - credit availed after filing declaration in Form AR4 - The Revenue alleged that the assessee vide declarations in Form AR4 dated 4.8.1998, 17.8.1998 and 22.8.1998 had exported certain quantity of fabrics in its own account, and in the said AR4s had declared that the assessee had manufactured the fabric as mentioned in AR4, and that the benefit of Modvat under Rule 57A has not been availed, and also that it had not availed the facilities under Rule 12(1)(b) and 13(1)(b) of the Rules, and that export was made in discharge of export obligation under "advance licence" file. - assessee contended before this Court that it had taken credit of the duty on indigenous inputs only after the replenishment arrived. That is to say, the assessee had not claimed Modvat credit at the time the declarations under the advance license scheme were filed, but only later. - Held that: - The imported inputs were primarily stock replenishments that were used in the execution of other orders, and allowing the assessee to claim Modvat credit on the indigenous input would tantamount to giving a benefit twice for the same process that began with the manufacture and culminated in the export of the specified goods. The assessee cannot be held to be not entitled to claiming Modvat credit on finished goods where duty is not incident. Any attempt to avail it subsequently, casts serious aspersions on the bonafide intention of the assessee. The argument of the assessee that action had to be taken under the Duties Drawback Rules, 1971 and not through reversal of credit does not bear merit. The reversal of credit is meant to deny the assessee of a benefit that they would have otherwise enjoyed without justification. The drawback equivalent to CVD is legitimately permissible vide the process of AR4 declarations and thus, it is the benefit that is enjoyed without justifiable basis that has to be reversed. - Decided in favor of revenue
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