Smruti Organics Ltd vs Commissioner Of Central Excise, Pune ...

(Arising out Order-in-Appeal No. P-III/VM/41/2010 dated 24.02.2009 passed by the Commissioner of Central Excise (Appeals), Pune III)

For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial)

1. Whether Press Reporters may be allowed to see No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy Yes of the Order?

4. Whether Order is to be circulated to the Departmental Yes authorities?

Smruti Organics Ltd. Appellant

Vs.

Commissioner of Central Excise, Pune III Respondent

Appearance:

Shri Ashok B. Nawal, Cost Accountant for the appellant Shri Ashutosh Nath, AC (AR) for the respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial)

Date of hearing : 18-06-2015 Date of decision : 18-06-2015

O R D E R No:..

This appeal is directed against order in appeal number PIII/VM/41/2010 dated 24.02.2010. The issue as stated in impugned order is as under:-

The issue in brief is that the appellant is a 100% Export Oriented unit and are exempt from payment of duty in terms of Notification No. 24/2003 dated 31.03.2003 issued under Section 5A (1 A) of Central Excise Act, 1944. The appellant cleared some goods under ARE-1 during the period on payment of duty through their Cenvat credit account i.e RG 23A P-II. Subsequently the appellant filed a refund claim. However, during the scrutiny of the claim it was observed that the payment of duty was without authority of law and the payment made would not constitute duty and therefore refund claim was liable for rejection as the provision of Rule 5 of Cenvat Credit Rules, 2004 is granting refund. In respect of unutilized accumulated balance of Cenvat credit in the said case the credit was utilized towards export of goods and through DTA sales. In view of the above it was proposed to reject the said claim in terms of Section 11B hence a show cause notice was issued vide F.No. V Ch (29) l8-04/SamruthilRefund/09-10 dated 27.08.2009.

2. Aggrieved by such an order, appellant preferred an appeal before the first appellate authority. The first appellate authority after following the due process of law rejected the appeal by the impugned order.

3. Learned consultant/cost accountant appearing on behalf of the appellant takes me through the entire case records and submits that both the lower authorities have misunderstood the case. It is his submission that appellant had in fact cleared goods for export on payment of duty by debiting the Cenvat account. It is his submission that being a 100% export oriented unit they are not required to discharge Excise duty on the goods cleared for export, a position which is accepted and admitted by both sides. It is his submission that at the same time having debited the amount in Cenvat account they should be allowed to take re-credit of the amount paid by them, which is also denied by the lower authorities. He would draw my attention to the findings recorded by the lower authorities and more specifically the first appellate authority.

4. Learned departmental representative would reiterate the findings of both the lower authorities.

5. I have considered the submissions made by both sides and perused the records.

6. It is undisputed that appellant is an export oriented unit, not required to discharge any Excise duty on the goods exported by them. It is also undisputed that appellant had debited the Cenvat account for discharge of duty liability on the goods cleared for export. The refund claim filed by the appellant was also rejected on the same grounds; the findings are not contested by both sides. If it is so, the revenue authorities holding that the amount debited by the appellant on goods cleared for export is without any authority of law. Natural corollary would be the amount should be returned back to appellant, as revenue authorities can collect tax/duty only by authority of law. In the case in hand, from the records, it transpires that appellant though having filed refund claim, subsequently withdrew the same, with a request to lower authorities, seeking permission to recredit the amount in their Cenvat account; this legitimate request of the appellant is also dismissed by the lower authorities. In my view, the lower authorities have erred in passing the order of rejecting the request of re-credit of the amount paid by the appellant and not due to the government. To me, the impugned order is not in consonance with the law settled by the higher judicial forums, holding that duty collected without authority of law cannot be retained by the government.

7. In view of the foregoing and factual matrix in the case in hand, I find that the impugned orders are incorrect and liable to be set aside and I do so.

8. The impugned order is set aside and appellant is permitted to avail the credit of the amount erroneously debited in Cenvat account while clearing the goods for export. Appellant is directed to avail the credit in their Cenvat account only.

9. The appeal is allowed as indicated hereinabove.

(Operative part pronounced in Court)

(M.V. Ravindran) Member (Judicial)

//SR

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