ORDER
V.K. Agrawal
1. In this appeal, filed by M/s Hotline Teletube & Components LTd., the issue involved is whether they were eligible to avail of refund of the modvat credit amount in respect of inputs used in the manufacture of final goods exported out of India, on or after 1-3-97 in view of the provisions of Rule 57F(17) of the Central Excise Rules.
2. Shri V. Lakshmikumaran, ld. Advocate,submitted that the Appellants manufacture Black and White Picture Tubes and avail of Modvat Credit of the duty paid on inputs; that besides clearing the picture tubes for home consumption, they export the same under bond without payment of Central Excise Duty; that they had exported picture tubes during the period from October 1996 to December 1996 and as they were not able to utilise the Modvat Credit of the duty, they filed a refund claim interms of Rule 57F(13) of the Central Excise Rules on 19-3-97; that the Assistant Commissioner, under adjudication Order No. 108/97 dt. 20-5-97, rejected their refund claim, holding that on the date of application for refund, no credit balance was available on account of credit being lapased as per provisions of Rule 57F(17); that the Commissioner (Appeals) also, under the impugned Order, rejected their appeal. The ld. Counsel, further, submitted that provisions of Rule 57F(17) do not apply to Rule 57F(13) in terms of which the credit of the specified duty paid on inputs used in the manufacture of final products which are cleared for export and the credit cannot be utilised for payment of duty on any final product cleared for home consumption, the refund is admissible; that the provisions of Rule 57F(17) does not bar the sanctioning of refund of credit earned on the inputs used for the manufacture of final products prior to 1-3-97; that the provisions of Sub-Rule 57 F(17) starts as “Not withstanding anything contained in Sub-Rule (12) or Rule 57A” and as such provisions of Sub-Rule (17) does not affect the provisions of Sub-Rule (12) which provides for the utilisation of the credit of specified duty allowed in respect of any inputs where as Sub-Rule (13)provides for use of the credit earned in respect of inputs used in the manufacture of export goods; that Sub-Rule (13) independently contains the provisions for the utilisation of the credit earned in respect of export goods and non-obstante clause in sub-Rule (17) does not refer to Sub Rule (13) and accordingly the doctrine of alternative injunction would apply. The ld. counsel also contended that in view of the provisions of Sub-Rule (17), it is immaterial whether the refund claimed was filed prior to 1-3-97 or after 1-3-97 when the provisions of sub-rule(17) came into force. He, further, mentioned that the rule 57 F (13) is a special provisions dealing with credit earned on an export product; that the requirements of this sub-rule which mandates cash refund have been clarified by the Board under letter dt. 12-12-97; that Board has clarified that the refund is admissible to the manufacturer under provisions of Sub-rule (13) if the manufacturer is not in a position to utilise the amount of any credit on products cleared for home consumption; that the words “for any reason” are very relevant in this context and that freezing of credit lying in balance as on 1-3-97 will not act as a bar in this case. The ld. Counsel emphasised that the entire refund claim in their case pertains to the credit earned on the inputs received prior to 1-3-97; that it is evident from the Board’s letter that if credit is available on account of export, the same would not lapse; that it is settled law by Supreme Court’s decision that the Circular issued by CBEC are binding on the Revenue and it cannot contend to the contrary; that fallowing the Circular of CBEC the Appellate Tribunal in the case of M/s Samtel India Ltd. Vs. CCE Jaipur vide Final Order No. A/354/2000-NB dt. 17-4-2000 held that the Appellants were entitled for the cash refund under Rule 57F(13). He finally submitted that the view that if the refund claimed has been filed prior to 1-3-97 only then benefit of the Circular would be applicable is wholly erroneous and contrary to the entire basis and thrust of the Circular; that there is no stipulation in the Circular that the benefit would be extended only if the application of refund is also filed prior to 1-3-97; that the last paragraph of the circular specifically states that the Circular “applies to the credit earned before 1-3-97.”
4. Countering the arguments, Shri M.D.Singh, ld. SDR, submitted that the utilisation of the Modvat Credit earned by a manufacturer is a benefit given under the Central Excise Rules; that once the Rules provides for lapsing of credit, no credit remains in the balance in RG-23A part II and consequentially it will not be available to the manufacature for refund in cash under Sub-Rule (13) of Rule 57(F). He, further, mentioned that the Board’s letter dt. 12-12-97 and the clarification contained therein is to be seen in the light of facts in respect of which the Circular was issued; that the refund claim in the case referred by CCE Meerut had been filed prior to 1-3-97, the date on which provisions of Sub-Rule (17) came into force; that in view of these facts the Board clarified that freezing of credit lying in balance as on 1-3-97 will not act as a bar in this case. He further, mentioned that Tribunal, in another case of Samtel India Ltd. Vs. CCE Jaipur, vide Final Order No. A/661/2000 NB (DB) dt. 3-8-2000, held that as the refund claim was filed on 11-7-97 when there was no credit available in respect of the goods exported prior to 1-3-97, the ratio of the clarification given by the Board will not be applicable. He also mentioned that the Tribunal in the said case also came to the conclusion that the decision in the case of Eicher MOtors Ltd. Vs. U.O.I. 1999(106) ELT 3(SC), relied upon by the ld. Advocate, will not apply to the facts of the present matter. In reply the ld. Counsel for the Appellants mentioned that the Appellate Tribunal in second Samtel India case had not considered the fact that Rule 57F(17) started with a “non-obstente clause” which seeks to override Only Rule 57A and 57F(12) and not Rule 57F(13); that further, doctrine of alternative injunction was also not considered; that the matter may, therefore, be referred to Larger Bench of the Appellate Tribunal. He relied upon the decision of the Larger Bench of the Tribunal in the case of CCE Vadodara Vs.Asia Brown Boweri Ltd. 2000(122) ELT 228, wherein it was observed that there is no bar to a Single Member Bench for referring the matter to a Larger Bench differing with the decision of a Division Bench.
5. I have considered the submissions of both the sides. The facts which are not in dispute are that the inputs in respect of which credit was availed of were used in the manufacture of final products which were exported out of the country without payment of duty under bond and the Appellants had filed the refund claim under Rule 57F(13) of the Central Excise Rule as they were not in a position to use the credit. The refund claim was filed by them on 19-3-97. Sub-rule (17) of Rule 57F came into effect from 1-3-97 which provided as under:
“(17) notwithstanding any thing contains in sub-rule (12) or rule 57A, any credit of specified duty lying unutilised:
(a) xxx
(b) On the first day of March 1997 with the manufacturer of bulk drugs falling under Chapter 28 or 29 and with the manufacturers of black and white picture tubes falling under subheading No. 8540.12 shall lapse and shall not be allowed to be utilised for payment of duty on any exciseable goods, whether cleared for home consumption or for export”
6. There is substance in the submissions made by the ld. Advocate for the Appellants that sub rule(17) starts with non-obstante clause which seeks to override the provisions contained in Rule 57A and 57F (12). The non-obstante clause is intended to preclude in advance, any interpretation contrary to certain declared objects or purposes. Sub-Rule (12) provides that the credit allowed in respect of any inputs mention may be utilised towards payment of duty of excise on any of the final products in the manufacture of which such inputs are intended to be used, or on the waste arising in the course of the manufacature of the final products or inputs themselves if the same is removed as such or for payment of duty on any other final products. Sub-Rule (17) provided for lapsing of the credit lying unutilise on 1-3-97 notwithstanding the provisions contained in sub-rule (12). I observe that sub-rule (13) seperately provides that in case inputs are used in the final products which are cleared for export under bond, such credit shall be allowed to be utilised towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, refund shall be allowed to the manufacturer. Sub-Rule (13) is, therefore, providing a seperate machanism for utilising of the credit earned in respect of inputs used in the manufacturer of final products which have been exported. As the Appellate Tribunal in the second case of Samtel Indial Ltd has not considered the effect of use of the words “notwithstanding anything contained in sub-rule (12) “as perhaps it was not brought to their notice, I am of the view that the matter needs to be placed before the larger Bench of the Tribunal to consider whether non mentione of sub rule (13) in non obstante clause in sub rule (17) will make the appellants eligible for the refund of the modvat credit which was availed of by them prior to 1-3-97 in respect of inputs used in the manufacture of final goods also exported prior to 1-3-97 though the refund claim was filed after 1-3-97.
7. This matter is placed before the Hon’ble President for constituting a Larger Bench to examine the question mentioned above.