ORDER
S.S. Sekhon, Member (T)
1. Respondents were engaged in manufacture of excisable Man Made Fabrics and availed Modvat Credit as per law, on the inputs. Since they were exporting the fabrics so manufactured, under Bond without payment of duty, the Credit of Modvat in balance could not be utilised. They were entitled to refund of such credits, by the CCE (Appeals) as it was found-
i) Rule 57F (13) provides for cash refund of unutilised credit and major portion of the goods manufactured were exported and the credit in balance and utilization thereof is not in dispute.
ii) The adjudicator finding, that evidence that credit could not be other wise utilised on home clearances was not sustainable since statements were submitted showing production clearance and exports. These figures were available in RT12 monthly returns filed and were required to be considered. Payment on duty from personal Ledger Account and clearing refunds would not be beneficial to the assessee. Therefore there is no reason to suspect that the assessee had intentionally not utilised the credit to debit clearances for home consumption.
iii) As regards original AR 4’s not filed it was found that they have been submitted to same authority as Proof of Export.
2. Hence this appeal by Revenue on the grounds-
a) Conditions of notification 85/87 CE mandatory and are required to be strictly followed.
b) As per this notification, claims cannot be submitted more than once in a quarter and the assessee had filed three claims during January/March 98 and 2 in July/ September 98 resulting in the verification of capacity to utilise, not be made and thus condition No. 2 & 5 of notification not complied.
3. Heard both sides and considered the issue. It is found-
a) The substantial power to refund arise from Rule 57F(13) and notification provides the procedures. Condition No. (2) has a proviso inserted vide notification 40/95 CE dated 27.12.95 to permit one such claim per calendar Month and that has not been exceeded nor there is material in the grounds to conclude that condition of proviso is not met. The ground of violation of condition No. 2 & 5 is therefore not upheld.
b) The CCE (Appeals) has brought out the fact of AR 4 being submitted to same authority to meet the export obligation proof cannot be found to be a failures to cause rejection of the refund under Rule 57F (13) by the same authority.
c) There is commercial logic and force in the finding of CCE(Appeals) that no manufacturer will discharge current liability of duty in cash, from his PLA and thereafter seek refunds of the credit amounts. When he could have as well discharged the current duty liability from the Modvat Credits balance.
d) There are no valid grounds to upset the finding of CCE (Appeals).
4. Consequently this appeal is dismissed.
5. Appeal No. E/2556/99 filed by Revenue on same issue is also dismissed on similar findings.
(Pronounced in Court on 25/04/2004)