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2015 (11) TMI 599 - ANDHRA PRADESH HIGH COURT

2015 (11) TMI 599 - ANDHRA PRADESH HIGH COURT - 2015 (325) E.L.T. 281 (A. P.) - Refund claim - Denial of MODVAT Credit - whether the duty paid through the credit of RG23A Part II account can be ordered to be refunded with debit of the account with liberty to the Department to take action for denial of availment of modvat claim as ordered by the Tribunal - Held that:- On the instructions of Superintendent of Central Excise, a declaration under Rule 173B was filed and the duty was paid. It is stat .....

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here was a protest under Rule 233B and the claim for refund was not time barred. The said finding was not challenged by the Revenue before the Tribunal. Now it is not open for the Revenue to contend that the protest was not before a proper officer and hence the claim for refund was time barred. Such a plea, at this stage, cannot be entertained.

It is clear from the facts that the duty of ₹ 3,45,548/- was paid from the personal ledger account and the rest of the amount by credit .....

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respect of the balance amount of ₹ 65,41,683/- and ₹ 26,69,033/-. - there is no evidence to show that the claimant has discharged such burden. But so far as the amount of ₹ 3,45,548/- is concerned, since the letter dated 10.07.1998 of the DOT was produced, the said amount was allowed.

The modvat credit availed by the assessee was used for payment of excise duty, though under protest and there is no provision for cash refund of such duty paid through modvat credit. I .....

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is no provision for reversal of the same. But the Tribunal directed that RG23A Part II should be ordered to be credited with the debits of duty made in the RG23A registers and the Department was given liberty to take such action as permissible under law to deny the availment of modvat claim. Since, in the instant case, the said credit was utilized for payment duty, we do not think it proper to direct the authorities to reverse the entries in RG23A registers by giving them liberty to deny the ava .....

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rder of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore (for short, the Tribunal) in Final Order No.680/2004 dated 25.03.2004 in Appeal No.E/467/2000. 2. The following substantial questions of law were framed and fell for our consideration. a) Whether duty paid through Modvat Credit account on the clearances of cable jointing kits prior to their exemption from excisability as held by Honble High Court of AP can be granted as refund, even though the refund cla .....

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944? 3. The respondent assessee is in the business of manufacture of cable jointing kits falling under chapter sub-heading No.8547.00 of Central Excise Tariff Act, 1985. The assessee paid the excise duty of an amount of ₹ 1,01,92,689/- out of which an amount of ₹ 95,56,264/- was allegedly paid under protest, whereas an amount of ₹ 6,36,425/- was paid in respect of supplies made to others. The said amount of ₹ 95,56,264/- was paid on the goods cleared to Department of Tele .....

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said, this Court in W.P.Nos.8818, 22078 and 24242 of 1997, dated 02.02.1998, held that assembly of cable jointing kits does not amount to manufacture. On the basis of the said judgment, the assessee staked a claim that no excise duty is leviable on the said cable jointing kits and hence the duty paid through RG 23A Part II (Modvat Credit) is to be refunded to them as the incidence of duty has not been passed on to the customer. They filed a refund claim for ₹ 1,01,92,689/- being the duty p .....

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the ground that the assessee had not furnished any documentary evidence from the buyer to the effect that they have not reimbursed excise duty from the assessee. Against the said order, the assessee went in appeal to the Commissioner of Customs & Central Excise, (Appeals), Hyderabad, who in his order in Appeal No.35/99 (H.III) CE dated 04.03.1999, set aside the order of the Assistant Commissioner and remanded back the matter to the Assistant Commissioner for de novo decision, as he passed t .....

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n 14.10.1996 stating that duties were paid under protest. Later on, the decision of this Court dated 02.02.1998 was pronounced. The assessee submitted that it complied with the procedure for lodging the protest and accordingly requested for refund. It also submitted that whether a protest is lodged with the Superintendent or the Assistant Commissioner, it would only be a letter of protest under Rule 233B. The Assistant Commissioner rejected the refund claim for ₹ 95,56,264/- on the ground .....

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by the assessee and there was substantial compliance of Rule 233B of the Rules and the claim was not hit by time bar. It was held that since the Department of Telecom vide its letter dated 10.07.1998 had certified that they have not reimbursed excise duty for the supply bills raised against the purchase order C 96/J Kits/8216/8, dated 29.11.1996, the assessee was entitled to the refund of ₹ 3,45,548/- paid from the PLA for the supplies effected to the Department of Telecom against the said .....

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on a final order No.1183/2002 dated 06.09.20012 passed in the case of Goldstone Engineering Ltd. Vs. CCE, by holding as follows: 4. We have heard both sides and considered the matter and find that:- a) Payment of duty by debiting RG23A Part II is also payment of duties levied under the Central Excise Act, 1944. When the Honble High Court held that the cable jointing kits are not exigible and no manufacture is involved in placing or articles in one kit and the SLPs filed by the Department on the .....

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e credit on the inputs per se the kits, i.e., final product, for which the inputs were brought and used have been held to be non- excisable, then a separate proceedings for denial of the modvat credit not admissible should have been launched. We agree with the propositions so made. 5. In view of our findings and seeing there are no other issues raised in the appeal before us, we would modify the Commissioners orders by directing that the RG23A Part II records should be ordered to be credited wit .....

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there is no provision for refund of duty credited in RG23A Part II Account except when the goods are exported on payment of duty. 7. The learned counsel for the assessee, on the other hand, submitted that the Commissioner of Customs & Central Excise (Appeals), Basheerbagh, Hyderabad held that there was a protest within the meaning of Rule 233B of the Rules and the claim for refund was not time barred. When the Commissioner held that the assessee was not entitled to the modvat credit of ͅ .....

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y make an application for refund of such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of six months from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in Section 12A) as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected .....

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the limitation of six months shall not apply where any duty has been paid under protest. Explanation:- For the purposes of this section, (A) refund includes rebate of duty of excise on excisable goods exported out of India or an excisable materials used in the manufacture of goods which are exported out of India; (B) " relevant date" means,- (a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case .....

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, or subjected to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid; (c) in the case of goods to which banderols are required to be affixed if removed for home consumption but not so required when exported outside India, if returned to a factory after having been removed from such factory for export out of India, the date of entry into the factory; (d) in a case where a manufacturer is required to pay a sum, for a certain period, on the basi .....

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empt from payment of duty by a special order issued under sub- section (2) of Section 5A, the date of issue of such order. 9. A reading of the above provision makes it clear that if the duty was paid under protest, the limitation of six months shall not apply. 10. In the instant case, it is clear that on the instructions of Superintendent of Central Excise, a declaration under Rule 173B was filed and the duty was paid. It is stated by the assessee that the said duty was paid under protest letter .....

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sessee desires to pay duty under protest he shall deliver to the proper officer letter to this effect and give grounds for payment of the duty under protest. (2) On receipt of the said letter, the proper officer shall give an acknowledgement to it. (8) If any of the provisions of this rule has not been observed, it shall be deemed that the assessee has paid the duty without protest. Note:- A letter of protest or a representation under this rule shall not constitute a claim for refund. 11. In Man .....

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ew Delhi V. Unik Spring (I) 1995 (77) DLT 407 , Faridabad for coming to the said conclusion. 12. In D.C.M. Data Products V. Collector of Central Excise 1993 (66) ELT 635 , a three Judge Bench of the Customs, Excise and Gold (Control) Appellate Tribunal Special Bench A, New Delhi held that so long as there is a substantial compliance with Rule 233B, it does not affect the refund claim. For coming to the said conclusion, the said Tribunal relied on the decision of the Bombay High Court in Roche Pr .....

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Appeals), Hyderabad held that there was a protest under Rule 233B and the claim for refund was not time barred. The said finding was not challenged by the Revenue before the Tribunal. Now it is not open for the Revenue to contend that the protest was not before a proper officer and hence the claim for refund was time barred. Such a plea, at this stage, cannot be entertained. Accordingly, we hold the first question against the Revenue and in favour of the assessee. 15. The next point for determin .....

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ioner, in appeal, allowed to the extent of duty paid from personal ledger account to the tune of ₹ 3,45,548/- only on the ground that the DOT vide its letter dated 10.07.1998 had certified that they have not reimbursed excise duty for the supply bills raised for the said amount and further holding that there is no provision in law for restoration of the credit, once utilized in respect of the balance amount of ₹ 65,41,683/- and ₹ 26,69,033/-. 16. A nine Judge Bench of the Supre .....

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produced, the said amount was allowed. 17. Rule 57F of the Rules deals with the manner of utilization of inputs and the credit allowed in respect of the duties paid thereon. Sub-Rule (13) of Rule 57F reads as follows: (13) Where any inputs are used in the final products which are cleared for export under bond or used in the intermediate products cleared for export in accordance with sub-rule (4), the credit of specified duty in respect of the inputs so used shall be allowed to be utilized by the .....

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