THIRD MEMBER ON REFERENCE : SHRI C.N.B. NAIR, MEMBER (T) COMMISSIONER OF CENTRAL EXCISE, BANGALORE Vs. VIKRANT TYRES LTD.

JUDGEMENT

(1.) THE respondents (hereinafter referred to as M/s. VTL) are manufacturers of tyres and goods falling under Chapter 40 of the Central Excise Tariff. They availed under Rule 57A, Modvat credit on the raw materials and are maintaining the credit accounts in Form RG 23A for the credits, as prescribed.

(2.) THEY were also operating under VABAL, a scheme for import of customs duty free raw materials, against the goods exported. This customs duty free import was permissible under Notification No. 203/92 -Cus., dated 19 -5 -92 and in terms of Clause V(a) of this Notification, the exports to be made, were to be met from exporting final products using raw material, in respect of which no credit of duty had been availed under Rule 56A or 57A. To meet the Customs Duty exemption requirement, M/s. VTL, were required to reverse credit entries along with interest charges in terms of amnesty scheme announced under the VABAL scheme by the Department and in accordance with Trade Notice No. 9/97, dated 11 -1 -97. A reversal of credit entries in RG 23A -Pt. II amounting to Rs. 1,05,72,716/ - was effected being the credit equivalent to the duty on the inputs, which had gone into the exported products under the VABAL scheme and interest on such sum. These reversals were effected during the period 9 -1 -95 to 31 -1 -97. Trade Notice No. 81/97, dated 8 -7 -97 was issued, requiring that where such credit entries were reversed on actual basis, a certificate should be issued by Cost Accountant appointed under Section 14AA of Central Excise Act, 1944. Accordingly, Cost Accountant was nominated and he submitted a report that the reversal of credit and interest was required to the extent of Rs. 89,96,493/ - and interest thereon of Rs. 18,30,737/ - for the period 92 -93 to 95 -96. Therefore, an excess of Rs. 15,75,923/ - towards credit and Rs. 2,14,263/ - towards interest charges were reversed in excess of the requirements of Customs Amnesty Scheme announced under VABAL. The assessees, therefore, claimed Rs. 15,75,923/ - being excess credit reversed and Rs. 2,14,263/ - being the excess interest on the reversed credit, under the Amnesty Scheme, as refund claims.

(3.) THE Assistant Commissioner rejected the above said refund claims and passed the following order : -