AHMEDABAD STEEL CRAFTS LTD. Vs. CCE

JUDGEMENT

(1.) IN these three appeals, filed by M/s. Ahmedabad Steel Crafts Ltd., the issue involved is whether refund of Modvat Credit on account of export of final goods is available to them. Shri K.R. Swamy, Representative of the Appellants, submitted that the Appellants manufacture excisable goods falling under Chapter 72 of the schedule to the Central Excise Tariff Act and avail Modvat Credit of the duty paid on inputs; that they also cleared their finished goods for export under bond under Rule 13 of the Central Excise Rules without payment of duty; that after exporting the goods and in terms of Rule 57F(4) of the Central Excise Rules read with Notification No. 85/87 -CE dated 1.3.1987 they filed three refund claims; that two refund claims were filed on 30.5.1997 in respect of quarter ending December, 1996 and third refund claim was filed on 30.7.1997 for the quarter ending April -June, 1997; that the Adjudicating Authority has rejected their refund claims on the ground that by virtue of Notification No. 33/97 -CE(NT) dated 1.8.1997 the Modvat Credit accumulated with the manufacturer of Hot Re -rolled product of Non -alloy Steel and who were required to pay duty under Section 8A of the Central Excise Act had lapsed; that on appeal, the Commissioner (Appeals) rejected their appeals on the basis of Notification No. 33/97 -CE(NT). The learned Representative, further submitted that they had filed their claims before the issuance of Notification No. 33/97(NT); that when the refund claims were filed by them the Modvat Credit was available in RG -23A, Part -II and the same had not lapsed; that Notification No. 33/97 does not provide that the provisions contained therein would be applicable to the past period also. He relied upon the decision in the case of CCE, Jaipur v. Samtel India Ltd.,, 2000 (39) RLT 974 wherein the refund was allowed by the Tribunal observing that the export had taken place in 1996. Reliance was also placed on the decision in the case of Hotline Teletubes & Components Ltd. v. CCE, Indore,, 1998 (102) ELT 33 (Tribunal) :, 1998 (78) ECR 348 (T).

(2.) COUNTERING the arguments Shri Jagdish Singh, learned DR, submitted that clause 'D' was inserted in Sub -rule 17 of Rule 57F which provided for lapses of the Credit; that as the credit in balance with the Appellants had lapsed on 1.8.1997 the question of refund does not arise: that there was no provision in the Notification providing for non -application of lapsing provision in respect of pending refund claims. We have considered the submissions of both the sides. Rule 57F(13) provides that where any inputs are used in the final product which are cleared for export under bond, the Modvat Credit of the duty paid on inputs shall be allowed to be utilised by the manufacturer towards payment of duty of excise on final product or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount. It is not disputed by the Revenue that the Appellants in all the 3 cases had filed the refund claims before 1.8.1997. Once the Appellants had filed the refund claims in respect of Modvat Credit which was in respect of inputs used in the manufacture of final product which had been exported, the claim cannot be affected by a subsequent event in the form of Notification No. 33/97(NT) providing for lapsing of credit w.e.f. 1.8.1997. It has not been the case of the department that the Notification provided for retrospective operation. We are of the view that once the claim for refund of Modvat Credit earned on account of export has been claimed before lapsing provision came into effect the refund is admissible to the Appellants. This was the view held by the Tribunal in the case of Samtel India Ltd. (supra) observing that the export had taken place in 1996 and the relevant credit for the purpose of refund would be of that period. The Tribunal in the said case also referred to clarification issued by the Board and held that "there is no justification for denying the refund to the Respondent or in asking them to reverse the credit earned on purchase of inputs during a subsequent period. The impugned Order being in conformity with the instruction of the Board, it is not open for the Revenue to challenge it before us." In the circumstances we set aside the impugned Order and allow all the 3 appeals.