COMMISSIONER OF C. EX. Vs. JCT LTD.

JUDGEMENT

(1.) BRIEFLY stated. Facts of the case are as follows : -

(2.) OUT of the PSF manufactured by the respondents, some quantity was exported by them without payment of duty under Rule 191B of the Central Excise Rules, 1944. Since there was no one -to -one correlationship, credit earned on MEG and utilised in PSF which was ulimately exported would have been utilised by the respondents towards duty payable on clearances of PSF for home consumption. But this was not to be. Learned Advocate Shri V.K. Agrawal for the respondents has brought to our notice a letter dated 15 -2 -1990 from the Inspector, Central Excise, Hoshiarpur which directs the respondents to reverse the credit taken on such inputs which have been utilised in clearance of export product PSF. Even though the respondents got that order set aside by filing an appeal to the Collector (Appeals) vide Order -in -Appeal No. 39/C.E./Appeal/90, dated 11 -9 -1990, in the meantime however the Modvat credit was reversed by the respondents at the behest of the local officers. The respondents therefore were forced to file a refund claim for quantum of the reversed amount. Lower appellate authority has sustained the said refund claim. Hence this appeal by the Revenue.

(3.) LEARNED JDR, Shri R.S. Sangia has submitted that Notification No. 225/86 -C.E. does not envisage granting of refund of duty paid on inputs utilised in manufacture of final product, unlike the Modvat credit procedure (under Rule 57F of Central Excise Rules, 1944). Therefore granting of refund is not permissible. He however does not object to the fact that had the amount of duty paid on such inputs continued in the set -off register it could be and would have been utilised towards duty on clearances of PSF for home consumption, in view of the procedure laid down in Trade notices issued by the Department, as referred above.