TMI Blog2006 (7) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... ly by the respondent under bond. The interpretation of the Commissioner (Appeals) is correct. We would like to observe that even in Rule 5 of the Cenvat Credit Rules, there is a provision for refund of Cenvat Credit even in cases where the inputs are used in intermediate products cleared for export and the accumulated credit could not be adjusted for payment of Central Excise duty. When this is the general rule, there is no justification for denial of the refund claim when the final products were cleared to other EOUs. As regards the question of time bar, we do not find this question in the Show Cause Notice. Moreover, the Tribunal, in the case of CCE C, Ahmedabad-I v. Anjani Synthetics Ltd. [ 2001 (6) TMI 93 - CEGAT, MUMBAI] , has held that refund claim in respect of Deemed Credit is not deniable on the ground of limitation as explanation B to Section 11B of Central Excise Act, 1944 does not specify anything about refund claim arising under deemed credit. In these circumstances, we do not find any merit in the Revenue s appeal and the same is dismissed. Thus, we hold that the respondent is entitled for Deemed Credit in respect of the final products which are cleared t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge the impugned order. 3. S/Shri G. Shiva Dass, the learned Advocate and G. Venkatesh, Consultant, appeared for the appellants and Shri R.K. Singla the learned JCDR for Revenue. 4. The learned Advocate urged the following points: (i) The refund of the deemed credit in question is sought to be denied on the ground that the supplies made to EOUs/Merchant Exporters are not covered by the expression export under bond . (ii) The term Export has not been defined in the Central Excise Act, 1944/Central Excise Rules 2001/2002. The term Export has to be understood to include Deemed Export also and the clearances made to other Merchant Exporters, who would utilise the goods cleared by the appellants for further export. (iii) The conclusion drawn by the lower authority that the expression Export under bond as used in Rule 6 of the Cenvat Credit Rules would not cover Deemed Export, is not sustainable. (iv) The supplies made to an EOU is recognized as Deemed Export in terms of Chapter 10 of the EXIM Policy, applicable to the relevant period. Hence, the supplies made to EOUs are entitled to Deemed Export benefits under the EXIM Policy, which includes Deemed Expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilized to pay the duty. In the present case, this is what has happened. An amount of Rs. 65, lakhs has been utilised for payment of duty on final products cleared. Therefore, there is no substance in Revenue s contention that the appellants are not entitled for the credit. Thus, we do not find any merit in the OIO, which seeks to recover an amount Rs. 65 lakhs. Hence, the same is set aside and the appeal is allowed. E/832/2005 7. Revenue has filed this appeal against the OIA No. 119/2005, dated 31-5-2005 passed by the Commissioner of Customs Central Excise (Appeals-I), Hyderabad. 8. The respondents received Grey Fabrics for processing and took deemed credit under Notifications 53/2001-C.E.(N.T.) dated 29-6-2001 and 6/2002-C.E.(N.T.) dated 1-3-2002 issued under Rule 11 of Cenvat Credit Rules. They could utilise this credit only to the extent of Rs. 65 lakhs. In respect of the balance amount, they filed two refund claims for the periods from 1-3-2001 to 28-2-2002 and 1-3-2002 to 22-1-2003 respectively. The lower authority rejected the refund claim on the following grounds:- (i) It is observed from the documents submitted that the processed fabric was supplied to EO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r were exported under bond. Hence, the deemed credit itself is not available to the respondents and the question of refund of the same does not arise at all. (ii) The refund claim is also time barred for the following reasons:- (a) The relevant date for the refund in this case is the date of exportation, though the goods were not exported under bond by the assessee, without prejudice to this and considering even the assessee s contention of deemed export, the claim of refund is filed much beyond six months from the date of exportation. This alone is sufficient to reject the respondents claim. (b) Any refund of claim of excise duty has to be invariably dealt within the purview of Section 11B of the Central Excise Act, 1944 and any further rules and notifications with respect to refunds are to be dealt under the provisions of this Section only. (iii) The Commissioner (Appeals) has not discussed anything regarding limitation though in para 10, she has mentioned Section 11B. (iv) The Commissioner (Appeals) has relied on the decision of the Tribunal in the case of Omkar Textiles and UIC Wires (both cited supra). These cases are distinguishable. 11. The learned JCDR re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Act/Central Excise Rules or in the Cenvat Credit Rules. (vii) Supplies made to an EOU is recognized as Deemed Export in terms of Chapter 10 of the EXIM Policy. (viii) The decision of the Tribunal, in the case of Jambo Bags Ltd. v. CCE-2005 (184) E.L.T. 214 is relied on. 13. We have gone through the records of the case carefully. The Revenue contends that the Deemed Credit itself is not available to the respondent when the goods are neither cleared for home consumption on payment of duty nor were exported under bond. It is stated that in the present case, the goods were not exported under bond, therefore, there is no question of any Deemed Credit and hence, the question of its refund does not arise at all. 13.1. Let us examine the stand taken by the Revenue in the light of the relevant rules and Notifications:- The respondents are the processors of Polyester Textiles falling under Chapters 52, 54 and 55 of the Schedule to the Central Excise Tariff Act, 1985. Normally, when manufacturers receive various inputs on which Central Excise duty has been paid, they are entitled to take credit of the duty paid. This credit is known as Cenvat Credit. The availing of Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learance of the final products. This credit is utilized for payment of duty. 13.3. Revenue contends that when the final products are cleared to another EOU, as in the present case, no credit can be taken. On a careful reading of the notification, we do not come to such a conclusion. For clarity, we reproduce para 2 of the Notification 6/2002. 2. The Central Government further declares that a duty of excise of Rs. 18 per kg., shall be deemed to have been paid under the Central Excise Act, 1944 (hereinafter referred to as declared duty), on the declared inputs, when purchased by a manufacturer of the final products, and credit of the declared duty so deemed to have been paid shall be allowed to the manufacturer of the final products, without production of documents evidencing payment of duty on the said inputs, at the time of clearance of the said final products. When the final products are cleared, the respondents are entitled for the Deemed Credit. What is a clearance in Central Excise parlance? The clearance can be for home consumption or export. In the former case, duty is paid on the final products and that payment of duty can be made by availing the Deemed Cenvat cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utilized towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and, where for any reason, such adjustment is not possible, by refund to the manufacturer subject to such safeguards, conditions and limitations as may be specified by the Central Government in the Official Gazette: Provided further that no such refund of declared duty shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties (Drawback) Rules, 1971 or claims rebate of duty under rule 18 of the Central Excise (No. 2) Rules, 2001, in respect of such duty. The expression where for any reason such adjustment is not possible requires serious consideration. In the present case, the respondents have not directly exported the final products. They had cleared the final products to EOUs/Merchant Exporters. In view of this reason, it would not be possible for them to adjust the credit accumulated. In that case also, the refund is possible. In other words, the entitlement to Deemed Credit is governed by para 2 of the Notification which does not restrict the same to final products cleared directly by the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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