Alkali Metals Ltd vs Commissioner Of Customs, Central ...

[Arising out of Order-In-Appeal No. 40/2012 dated 15/03/2012 passed by the Commissioner of Customs, Central Excise and Service Tax, Hyderabad]

For approval and signature:

HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Alkali Metals Ltd. (Unit-II) 100% EOU), Sy. No. 299 to 302, Dommarapochampally Village, Qutubullapur Mandal R.R. Dist. Andhra Pradesh - 500 043 Appellant(s)

Versus Commissioner of Customs, Central Excise and Service Tax Hyderabad-IV Posnett Bhavan, Tilak Road, Ramkote, Hyderabad  500 001 Andhra Pradesh Respondent(s)

Appearance:

Mr. Lalit Mohan Chandna, Consultant Plot No.3/6, 3-41-61, Lane Adjacent to Police Station, West Marredpally, Secunderabad  500 026 Andhra Pradesh For the Appellant Mr. Pakshi Rajan, AR For the Respondent

Date of Hearing: 23/01/2015 Date of Decision: 23/01/2015 CORAM:

HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER

Final Order No. 20125 / 2015

Per : B.S.V.MURTHY

Appellant is a 100% EOU. They filed refund claim for Rs. 6,17,086/- (Rupees Six Lakhs Seventeen Thousand and Eighty Six only) in the month of July 2010 under Rule 5 of Cenvat Credit Rules. Taking a view that appellant could not have filed the claim every month relying upon paragraph 2 which deals with filing of such refund claims, refund claim has been rejected. Hence the appellants are before me.

2. The learned consultant submits that according to paragraph 2 of the appendix to the Notification provided for refund of cenvat credit under Rule 5 of Cenvat Credit Rules, the claims for refund in the case of 100% EOU can be filed for different calendar months and therefore he submits that the claim could not have been rejected on this ground.

3. The learned AR would submit that there is another ground for rejection which is the fact that appellants have undertaken deemed exports and said deemed export value cannot be taken into account for arriving at a percentage.

4. I have considered the submissions. Clause 2 of the appendix to the Notification reads as follows:

2. The claims for such refund are submitted not more than once for any quarter in a calendar year Provided that where,-

a) The average export clearances of final products or the output services in value terms is fifty per cent or more of the total clearances of final products or output services, as the case may be, in the preceding quarter; or

b) The claim is filed by Export Oriented Unit, the claim for such refund may be submitted for each calendar month.

5. The condition is very clear. A 100% EOU can file refund claim for each calendar month. The quantum of export principle is applicable only for domestic units and if intention was to incorporate such a condition, it would have been mentioned in paragraph 2(b) also. In the absence of such mention, the clause cannot be read into paragraph b. In respect of deemed export also cenvat credit cannot be used since no duty is paid in respect of deemed exports by 100% EOU. Under Rule 5 accumulated cenvat credit is refunded. When the deemed exports are made, it results in accumulation of cenvat credit also. Therefore his submission that value of deemed exports cannot be taken into account also cannot be accepted. In the result appeal has to be allowed. Accordingly the impugned order is set aside and the appeal is allowed with consequential relief, if any, to the appellant.

(Order pronounced and dictated in open court)

(B.S.V. MURTHY) TECHNICAL MEMBER

iss