COMMISSIONER OF CUSTOMS, BANGALORE Vs. ANZ INTERNATIONAL

JUDGEMENT

(1.) This appeal by the Revenue against the order dated 14-11-2007 passed by the Customs, Excise & Service Tax Appellate Tribunal, CESTAT' for short), South Zonal Bench, Bangalore, in Appeal No. CUSTOMS/226 & 227/2007, questioning the correctness of the order by framing substantial question No. 6 in the memorandum of appeal and urging various grounds in support of the same, requested this Court to answer the said question of law in favour of the Revenue.

(2.) The ground of attack of the impugned order is that the CESTAT has committed an error in law in not appreciating the fact that the products being manufactured by the claimant which are chargeable to NIL rate of duty by the Tariff itself and the Cenvat credit can be allowed in terms of the provisions of CGR and not otherwise (by way of referring to other concessions available to EOU subject to final orders) and further contended that another ground in support of the substantial question framed in this appeal is that the CESTAT has misconceived the provisions of Rule 6(6) of Cenvat Credit Rules, 2004 (for short the Rules' in applying the same to the facts of the case by interpreting the provisions of sub-rule (1) of Rule 6 which has no application and the reasons assigned in applying Rule 6 is not only erroneous but bad in law and therefore requested to answer the question in favour of the Revenue.

(3.) With reference to the above said grounds urged in this appeal, we have carefully examined the same to find out as to whether the aforesaid substantial question of law would arise or not for our consideration in this Appeal. The CESTAT, having regard to the undisputed fact that the respondent is 100% Export Oriented Unit (for short ECU') in respect of which, benefit of CENVAT Credit Rules, 2004 is available for the inputs which will be used for manufactured goods of 100% export. Therefore, the Tribunal has applied Rule 6(6) and recorded the reasons stating that there is a provision of exporting the goods under bond. In the case of 100% EOUs, the input can be imported free of duty and they can obtain indigenously also free of duty. When duty is paid on the inputs, then the appellants are entitled for the Cenvat credit facility under the Rules "Cenvat Credit Rules". There is nothing in the Rules which prohibits 100% EOUs availing Cenvat credit. Rule 5 of the said Rules provides for refund of Cenvat credit availed by the exporter where they do not utilize the goods as inputs for manufacture of 100% export. The case on hand is the precise case wherein the respondent has availed the Cenvat credit facility. They were not in a position to utilize the credit, they applied for refund of the Cenvat credit availed by them. The reason is that all their products were exported and there was no domestic clearance. Therefore, in terms of Rule 5 of the Rules, they are riglitiy entitled for the refund of the duty paid to the department. The learned counsel for the appellant has pointed out that in the case of Sterlite Opitcal Technologies Ltd. V/s. CCE, Aurangabad,2006 201 ELT 428, wherein it is held that letter of undertaking accepted in lieu of bond for export even though finished goods were exempted, refund of Cenvat credit on inputs and packing materials are admissible in terms of Rule 5 of the Rules. Therefore, the Tribunal has held that 100% EOU is entitled to take Cenvat credit on the duty of the inputs procured indigenously and when they were not in a position to utilize the same, they are entitled for the benefit of the refund under Rule 5 of the Rules. Therefore, the orders impugned in the Appeal before the CESTAT held to be bad in law and the same were set aside. Therefore, we do not find that no substantial question of law does arise in this Appeal for our consideration to answer the same in favour of the Revenue. Accordingly, the appeal is devoid of merits and therefore it must fail and is dismissed.