ORDER
T. Anjaneyulu, Member (J)
1. These two appeals are being decided by this common order, the issue is grant of refund under Rule 57AC(7) of the Central Excise Rules, 1944 (now Rule 5 of the Cenvat Credit Rules, 2002) for unutilised credit of duty paid on inputs used in the final products cleared for export under Bond or LUT as per Notification No. 35/2000-C.E. (N.T.), dated 28-4-2000 and Notification No. 11/2002-C.E. (N.T.), dated 1-3-2002.
2. After hearing both sides and considering the material, it is found –
(a) that the assessee had filed refund claims under Rule 57AC(7) of the erstwhile Central Excise Rules, 1944 and now Rule 5 of the Cenvat Credit Rules, 2001. The same were not granted on the ground that certain conditions were not fulfilled as the assessee was found to have under valued finished goods i.e. Copper Cathode cleared to their other unit at Silvassa, for which another case was pending and is under consideration separately. The claim of the refund which remain unutilised due to reason of such under valuation of finished goods has been explained by the appellant that the procurement price of their input Copper anode from their unit at Tuticorin has been 10% to 15% more than the sale price of the product (Cathode). This has been considered to be ridiculous and unrealistic resulting in the accumulation of credit. Whatever may be the reasons for the accumulation, the officers cannot question the amount of duty that is shown as paid on the documents prescribed for availing credit and the credit is available as per the amount of such documents has to be granted in the RG23A Registers maintained. On removal of the final product, duty has to be discharged as determined by the assessee and the same can be from RC23A and/or PLA maintained. Therefore, the objection of the Department for questioning input valuation and/or output valuation for denying the refund cannot be upheld.
(b) The other reason for denial i.e. the duty paid on Copper anode at Tuticorin unit was provisionally assessed and was paid “under protect” and was not the final assessment and therefore, cash refund cannot be given also cannot be a ground for rejecting the refund.
(c) It is submitted by the appellant that the grant of refund sought was on account of the credit of duty paid on inputs which were utilised for manufacture of finished goods exported under Bonds/LUT along. It was submitted that the unutilised credit now being claimed also contains the credit of the inputs which were used in the manufacture of finished goods which were thereafter cleared for home consumption on payment of Central Excise duty under C.T. 2/C.T. 3 without payment of duty in domestic market. Since Rule 57AC(7) of erstwhile Central Excise Rules, 1944 and Rule 5 of CENVAT Credit Rules, 2002 permitted refund of accumulated CENVAT credit availed only on inputs which have actually gone into manufacture of exported goods alone and cannot be utilised in normal course of clearance of finished goods. This aspect needs verification. In any case, the Commissioner (A) has not ascertained these facts as to whether the refund of accumulated credit asked by the assessee is actually attributed to the goods exported under bond alone. A chart prepared by the appellants has been shown to us which needs to be verified from the original documents.
3. In this view of the matter, we would set aside this appeal and remit
the matter back to the learned Commissioner (A) with a direction to redetermine
the facts and thereafter pass an order as per law. Appeals allowed as remand
with direction to fix a hearing and determine the case within 30 days of receipt of
this order.