ORDER
P.G. Chacko, Member (J)
1. The appellants are engaged in the manufacture of cotton fabrics. During the period of dispute, these fabrics were cleared without payment of duty, under ARE 3s, to manufacturer-exporters and merchant-exporters. The manufacturer-exporters converted the fabrics into ‘made-ups’ which were cleared under ARE 2s for export. The merchant-exporters cleared the fabrics as such under ARE 1s for export. The appellants, who had taken Cenvat credit on the yarn used in the manufacture of fabrics, could not utilise such credit. They claimed refund of such Cenvat amounts under Rule 5 of the Cenvat Credit Rules, 2002. The original authority passed 5 separate orders on 5 such refund claims covering different periods, rejecting the claims on the ground that the export of goods had not been proved. The appeals filed against the orders-in-original were disposed of by the first appellate authority by a common order, whereby the refund claim in respect of which clearances of fabrics under ARE 1s for export were made by merchant-exporters was remanded to the original authority and the refund claim filed with reference to the clearances of ‘made-ups’ under ARE 2s for export by manufacturer-exporters was disallowed. Hence the present appeals.
2. After examining the records and considering the submissions of ld. Counsel for the appellants and ld. Jt.CDR for the respondents, I find that four grounds were raised in each show-cause notice for rejecting the refund claim and that, out of these, three grounds were dropped by the original authority itself. The only ground sustained by that authority is want of conclusive proof of export of goods. According to the original authority, there was no correlation between the ARE 3s of the appellants and the ARE 1s/ARE 2s of the merchant-exporters/manufacturer-exporters. Ld. Commissioner (Appeals) took the view that Rule 5 of the Cenvat Credit Rules, 2002 provided for refund of Cenvat Credit only in the case of intermediate or finished products cleared for export from the manufacturer’s premises by the manufacturer himself on execution of bond or letter of undertaking, as the case may be, or by merchant-exporters on execution of bond. In respect of ARE 1s, it was found that the goods had been removed from the appellants’ premises only and the case was remanded to the original authority to reconsider the refund claim “after verification of facts as per law”. In respect of ARE 2s, it was found that the clearances of goods (made-ups) for export were made from the manufacturer-exporter’s premises and not from the appellants’ premises and, on this basis, refund claim was denied.
3. Ld. Counsel submitted that it was not necessary that the goods for export should be cleared from the manufacturer’s own premises, for the purpose of refund of CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2002. In this connection, reliance was placed on the Tribunal’s decision in CCE v. UIC Wires Ltd. . Ld. Jt.CDR referred to Notification No. 11/2002 CE (NT) dated 1.3.2002 and contended that Rule 5 required that export goods be removed from the factory of the manufacturer who claimed refund of CENVAT Credit under the Rule. Both sides also referred to the Central Excise (removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001 as also to Notification No. 43/2001 CE (NT) dated 26.6.2001.
4. I have given careful consideration to the submissions. In the case of UIC Wires Ltd (supra) cited by ld. Counsel, the said Company had cleared the high-tension steel wires against CT 2 certificates at ‘nil’ rate of duty to another factory for the manufacture of concrete sleepers. The wires so cleared were utilised by the recipient factory in the manufacture of concrete sleepers, which were exported by them under bond in terms of Rule 13 of the Central Excise Rules, 1944. The party claimed refund of accumulated CENVAT Credit which could not be utilised by them. The claim was rejected by the original authority, but allowed by the first appellate authority relying on the Tribunal’s decision in Orissa Synthetics Ltd. v. CCE and in two other cases. The department preferred an appeal to the Tribunal and the same was dismissed. The ratio of the Tribunal’s decision is contained in paragraphs 2 and 3 of its order, which are reproduced below:
2. The Revenue in their appeal have not disputed the fact that the goods were ultimately exported by the recipient factory after being used in the manufacture of sleepers. It seems that their only objection is that the goods were not cleared for export purpose from the manufacturing premises directly. They have also contended that Rules 191B and 191BB of Central Excise Rules, 1944 were omitted with effect from 1.10.1994. They have also referred to Rule 5 of Cenvat Credit Rules, 2002 and Sub-rule (7) of Rules 57AC of Central Excise Rules, 1944.
3. We have considered the submissions made by both the sides duly represented by Shri T.K. Kar, SDR for the Revenue and Shri B.N. Chattopadhyay, ld. Consultant for the respondents. We find that the fact of export of the goods from the recipient factory is not being disputed by the Revenue. They have also not said anything about the Tribunal’s decision in the case of Orissa Synthetics Ltd (supra) rendered under similar set of facts and circumstances. We also note that to the similar effect are the other decisions of the Tribunal as reported in 2002 (148) ELT 461 (T) : 2002 (51) RLT 988 (CEGAT-Mum) and . New rules are pari materia with the earlier rules and allow the refund of Cenvat Credit if the accumulated credit cannot be used for payment of duty of excise for any final product cleared for home consumption or for export on payment of duty. If these circumstances we find that the ratio of the Tribunal’s decision relied upon by Commissioner (Appeals) is fully applicable to the facts of the instant case. We accordingly do not find any merits in the Revenue’s appeal and reject the same. C.O. also gets disposed of.
Apparently, the facts of the above case are essentially similar to those of the instant case. The refund claim considered by the Tribunal in the case of UIC Wires Limited (supra) was one filed under Sub-rule 7 of Rule 57AC of the Central Excise Rules, 1944. The refund claims in question in the present case were filed under Rule 5 of the Cenvat Credit Rules, 200. This Rule was also cited before the Tribunal in the case of UIC Wires Limited (supra) and the Tribunal found it to be pari materia with Rule 57AC(7) ibid. In the circumstances, as rightly submitted by ld. Counsel, there must be no difficulty in applying the ratio of the above decision to the facts of the instant case. In the result, it will be held that the refund claims are not deniable to the appellants on the ground that the export goods were not removed from their factory. It appears from the impugned order that, irrespective of whether the refund claim relates to export goods cleared under ARE-1s or under ARE-2s, the view taken by the lower appellate authority is that such goods must be removed from the appellants’ premises so as to claim the benefit of refund under Rule 5 of the Cenvat Credit Rules, 2002. This view is apparently contradictory to UIC Wires Ltd (supra). No binding rival decision has been cited before me by the Revenue.
5. In the result, the impugned order gets set aside and the appeals are allowed.
(Order pronounced in open court on 13.2.06)