C.C.E., BHOPAL Vs. HIND SPINNERS

JUDGEMENT

(1.) THIS appeal is filed by the Revenue against the order -in -Appeal dt. 4.5.2000 passed by Commissioner (Appeals), Central Excise, Bhopal. In this order, the Commissioner (Appeals) has allowed the appeal of the respondents against the Order -in -Original dt. 24.8.95 of the Asst. Commissioner of Central Excise Division -I, Bhopal. The Asst. Commissioner of Central Excise in his order had rejected the refund claim amounting to Rs. 3,96,992/ - of the respondents on the following grounds: -

(2.) IT is stated that the inputs on which modvat credit was availed by them and used in the export consignments was required to be reversed and they have done accordingly. Therefore, the refund of the same is not admissible to them. The Commissioner (Appeals) on the contrary has observed in his order that the declaration contained in the Notfn. No.203/92 -Cus. can (SIC) be interpreted to wear only the inputs which are allowed to be imported free of duty under the DEEC scheme. He has further observed that the interpretation of the provisions of the notification made by the appellants is in conformity with the principle of harmonious construction and that the denial of credit on indigenously procured inputs used in the manufacture of export product is not envisaged under the scheme. Thus, it is held that the reversal of the credit on the direction of the Range Officer was therefore not correct and therefore, the party is entitled to the refund claimed by them.

(3.) I have heard Shri A.K. Jain, JDR for the appellants and Shri Z.U. Alvi, Advocate for the respondents. It is contended in the Revenue appeal that the Commissioner (Appeals) has held that the declaration contained in the Notfn. No.203/92 -Cus. can only be interpreted to mean that the inputs which are allowed to import free of duty under DEEC scheme. It is contended that this view is not tenable since as per condition V(a) of the said notification, it is very clear and unambiguous that no input stage credit is obtained in respect of export goods. Therefore, the findings of the Commissioner (Appeals) are contrary to the said law. The ld. Advocate for the respondents on the other hand submits that the reference to Notfn. No.203/92 - Cus. is erroneous, since the Notfn. No.204/92 -Cus. is applicable in their case. In terms of Para -VI, under the provisions of this notification there is no such condition to reverse the modvat credit obtained on the inputs used in the manufacture of export goods. It is further contended by the ld. Counsel for the respondents that the same issue is raised in their Cross Objections filed by the respondents in the present case. In view of these provisions, it is contended that since there is no requirement of reversing the modvat credit under Notfn. No.204/92 -Cus. applicable on the facts of their case, they are entitled to the amount of refund claimed by them.