COMMISSIONER Vs. METFLOW CAST PVT. LTD.

JUDGEMENT

(1.) The appellant-Commissioner of Central Excise and Customs, in this appeal under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as the Act) has challenged the order dated 2nd January, 2014 passed by the Central Excise and Service Tax Appellate Tribunal (hereinafter referred to as the Tribunal) in Appeal No. E/13793/2013, by proposing the following three questions stated to be substantial questions of law :

(2.) The issue involved in this case is regarding refund of the Cenvat credit availed by the respondent assessee on the inputs/input services/capital goods which were utilised and consumed in manufacturing of goods which were cleared to a 100% Export Oriented Unit (EOU) without payment of duty on ARE-1/ARE-3 and CT-3 certificates. The respondent assessee is engaged in the manufacture and clearance of cast articles of alloy steel, stainless steel and other engine parts and also availing Cenvat credit facility under the Cenvat Credit Rules, 2004 (hereinafter referred to as "the Rules"). The respondent filed a refund claim of Rs. 78,05,272/- under Rule 5 of the Rules read with Notification No. 5/2006-C.E. (N.T.), dated 14th March, 2006 for unutilised Cenvat credit (for the period from April, 2010 to March, 2011) lying in balance on account of clearances to a 100% EOU under ARE-3/CT-3 without payment of duty. The Assistant Commissioner, Central Excise, Division-II, Rajkot, issued a show cause notice dated 31st January, 2012, proposing to reject the refund claimed. The show cause notice came to be adjudicated by an Order-in-Original dated 24th May, 2012, whereby the proceedings were dropped in the light of the decision of the Supreme Court in the case of M/s. Shilpa Copper Wire Industries [2010 (255) E.L.T. A15 (S.C.)] and M/s. Amitex Silk Mills Pvt. Ltd. [2010 (254) E.L.T. A98 (S.C.)]. Accordingly, refund to the tune of Rs. 76,98,104/- came to be sanctioned under Section 11B of the Act. The appellant carried the matter in appeal before the Commissioner (Appeals), who allowed the appeal by an Order-in-Appeal dated August 30, 2013. The assessee carried the matter in appeal before the Tribunal and succeeded.

(3.) Mr. Y.N. Ravani, learned senior standing counsel for the appellant, submitted that the Tribunal has erred in placing reliance upon the decision of this Court while allowing the appeal of the respondent inasmuch as the same has been rendered in a case where clearances were made from one 100% EOU to another 100% EOU, whereas the present case relates to clearances made by a DTA (Domestic Tariff Area) to a 100% EOU. It was further submitted that the Tribunal has failed to take into consideration the Circular F.No. 267/124/2007-CX.8, dated 24th March, 2008, wherein it has been stated that the DTA units do not physically export the excisable goods but merely supply the goods to 100% EOU. It was submitted that, therefore, the provisions of Rule 5 of the Rules are not applicable and the remedy lies in claiming refund of terminal excise duty from the Ministry of Commerce as per the Foreign Trade Policy and the provisions in the Handbook of Procedures (Vol. 1). In support of his submissions, the learned counsel placed reliance upon the decision of the Madras High Court in the case of BAPL Industries Ltd. v. Union of India, 2007 (211) E.L.T. 23 (Mad.), for the proposition that physical export is not a deemed export and the concession granted to the petitioner under Chapter 10 of EXIM Policy is deemed export and not an export and, hence, cannot be extended for local sale to the DTA or local sale made by a 100% EOU to another 100% EOU. It was, accordingly, urged that the appeal requires consideration and is required to be admitted on the questions as proposed or as may be deemed fit by this Court.