CONTINENTAL CHEMICALS INDIA LTD. Vs. CCE

JUDGEMENT

(1.) In this appeal, filed by M/s. Continental Chemicals India Ltd., the issue involved is whether, they are eligible to avail the refund of duty paid on the inputs used in the manufacture of goods exported out of India.

(2.) Shri P.K. Mittal, learned Advocate, submitted that the appellants manufacture detergent powders and they exported 865.008 MTs of detergent powders to U.S.S.R. through M/s. U.K. Paints Industries during July -September 1989; that they had intimated to the Department, under their letter dated 15.12.1989 that they would not avail Modvat Credit of the duty paid on the inputs used in the manufacturing process and would apply for refund after the goods were exported under Rule 57F(3) of the Central Excise Rules, 1944 as they were, being an exporting unit, not in a position to utilise the Modvat Credit for clearance of goods for home consumption; that when they filed their refund claim, a show cause notice dated 28.7.90 was issued to them for disallowing the refund claim under Rule 57F(3) of the Central Excise Rules, 1944 as they had not taken the credit of duty in their RG 23A -Part -ll account and they did not have the required credit; that the Assistant Collector rejected their claim under Adjudication Order dated 9.1.92 which was remanded by the Commissioner (Appeals) under Order dated 31.8.92; that the Assistant Commissioner again rejected the refund claim under Adjudication Order dated 21.1.1994 which was upheld by the Commissioner (Appeals) under Order -in -Appeal No. 121 /CE/94 dated 28.7.94; that however, the Appellate Tribunal, vide Final Order No. A997/98/NB dated 28.11.1998 remanded the matter to the Adjudicating Authority for disposal of refund claim on the basis of earlier Order No. 280 -281/92/NB dated 23.6.92; that the Deputy Commissioner had rejected their refund claim third time under Adjudication Order No. 49/99 dated 1.11.99 holding that since the goods were exported by M/s. U.K. Paints, the appellants were not independent exporter; that the Commissioner (Appeals) has rejected their appeal under the impugned order observing that they did not submit records to show that export goods contained imported components or goods purchased indigenously and so that correlation of inputs could be made to the exported goods.

(3.) The learned Advocate, further, submitted that the Appellate Tribunal had remanded the matter, vide Final Order dated 20.11.98 to establish that inputs imported under DEEC Scheme had not gone in the manufacture of final product for export and whether M/s. U.K. Paints Industries had not availed of the drawback or rebate in respect of the duty; that it stands accepted in the Adjudication Order dated 1.11.1999 that neither they nor U.K. Paints have claimed the benefit of drawback for the goods exported; that it is also in the Order that Rule 57F(3) did not provide for disallowing refund of credit if duty paid indigenous inputs are used in export goods; that the Tribunal had also noted that U.K. Paints had not claimed any drawback which was clear from the letter dated 1.10.92 written by the Collector of Customs, New Delhi to Assistant Collector of Central Excise, Noida. The learned Counsel emphasised that there is no dispute that indigenous material was purchased against duty paid gate passes and the U.K. Paints had not given any materials to them. He also relied upon the Board's Circular No. 220/54/96 CX, dated 4.6.96 wherein it has been clarified by the Board that "Cash refund of the unutlised Modvat credit is an incentive given to manufacturers and exporters and non -grant of such claim will affect the competitiveness of the Indian Industry in the international market." The Board, therefore, directed that the refund claims filed under Rule 57F should be decided expeditiously, whenever the manufacturer is not able to utilise 57A against the goods exported during the quarter/month to which the claim relates. Reliance has also been placed on the Circular No. 34/98 -Cus., dated 19.5.1998 wherein it has been clarified that a self -declaration of the exporter regarding non -avail merit of Modvat may be accepted, Reliance has also been placed on the decision in the case of CC, New Delhi v. Bhayana Electronics Industries (P) Ltd., 1994 (74) ELT 905 (T) wherein it has been held by the Tribunal that under proviso to Rule 57F(3), the refund is allowed to the manufacture if the final products are cleared for exports under bond and merely because merchant exporter exported the goods would not mean that goods in fact have not been exported and refund is admissible under Rule 57F(3).