HOTLINE TELETUBEL COMPONENTS Vs. CCE BHOPAL

JUDGEMENT

(1.) IN this appeal, filed by M/s Hotline Teletube and Components LTd., the issue involved is whether they were eligible to avail of refund of the modvat credit amount in respect of inputs used in the manufacture of final goods exported out of India, on or after 1 -3 -97 in view of the provisions of Rule 57F(17) of the Central Excise Rules.

(2.) SHRI V. Lakshmikumaran, ld. Advocate,submitted that the Appellants manufacture Black and White Picture Tubes and avail of Modvat Credit of the duty paid on inputs; that besides clearing the picture tubes for home consumption, they export the same under bond without payment of Central Excise Duty; that they had exported picture tubes during the period from October 1996 to December 1996 and as they were not able to utilise the Modvat Credit of the duty, they filed a refund claim interms of Rule 57F(13) of the Central Excise Rules on 19 -3 -97; that the Assistant Commissioner, under adjudication Order No. 108/97 dt. 20 -5 -97, rejected their refund claim, holding that on the date of application for refund, no credit balance was available on account of credit being lapased as per provisions of Rule 57F(17); that the Commissioner (Appeals) also, under the impugned Order, rejected their appeal. The ld. Counsel, further, submitted that provisions of Rule 57F(17) do not apply to Rule 57F(13) in terms of which the credit of the specified duty paid on inputs used in the manufacture of final products which are cleared for export and the credit cannot be utilised for payment of duty on any final product cleared for home consumption, the refund is admissible; that the provisions of Rule 57F(17) does not bar the sanctioning of refund of credit earned on the inputs used for the manufacture of final products prior to 1 -3 -97; that the provisions of Sub -Rule 57 F(17) starts as "Not withstanding anything contained in Sub -Rule (12) or Rule 57A" and as such provisions of Sub -Rule (17) does not affect the provisions of Sub -Rule (12) which provides for the utilisation of the credit of specified duty allowed in respect of any inputs where as Sub -Rule (13)provides for use of the credit earned in respect of inputs used in the manufacture of export goods; that Sub -Rule (13) independently contains the provisions for the utilisation of the credit earned in respect of export goods and non -obstante clause in sub -Rule (17) does not refer to Sub Rule (13) and accordingly the doctrine of alternative injunction would apply. The ld. counsel also contended that in view of the provisions of Sub -Rule (17), it is immaterial whether the refund claimed was filed prior to 1 -3 -97 or after 1 -3 -97 when the provisions of sub -rule(17) came into force. He, further, mentioned that the rule 57 F (13) is a special provisions dealing with credit earned on an export product; that the requirements of this sub -rule which mandates cash refund have been clarified by the Board under letter dt. 12 -12 -97; that Board has clarified that the refund is admissible to the manufacturer under provisions of Sub -rule (13) if the manufacturer is not in a position to utilise the amount of any credit on products cleared for home consumption; that the words "for any reason" are very relevant in this context and that freezing of credit lying in balance as on 1 -3 -97 will not act as a bar in this case.

(3.) THE ld. Counsel emphasised that the entire refund claim in their case pertains to the credit earned on the inputs received prior to 1 -3 -97; that it is evident from the Board's letter that if credit is available on account of export, the same would not lapse; that it is settled law by Supreme Court's decision that the Circular issued by CBEC are binding on the Revenue and it cannot contend to the contrary; that fallowing the Circular of CBEC the Appellate Tribunal in the case of M/s Samtel India Ltd. Vs. CCE Jaipur vide Final Order No. A/354/2000 -NB dt. 17 -4 -2000 held that the Appellants were entitled for the cash refund under Rule 57F(13). He finally submitted that the view that if the refund claimed has been filed prior to 1 -3 -97 only then benefit of the Circular would be applicable is wholly erroneous and contrary to the entire basis and thrust of the Circular; that there is no stipulation in the Circular that the benefit would be extended only if the application of refund is also filed prior to 1 -3 -97; that the last paragraph of the circular specifically states that the Circular "applies to the credit earned before 1 -3 -97."