ORDER
S.S. Sekhon, Member (T).
1. The appellants are manufacturers of cable jointing kit. Consequent to the decision of the Hon’ble High Court of Andhra Pradesh in Writ Petition Nos. 8818, 22078 and 24242 of 1997 [1999 (105) E.L.T. 263 (A.P.)] wherein the Hon’ble High Court held that the such kits, as in this case, were not exigible and there was no authority in law to levy Central Excise Duty. The appellants preferred refund claims. The claim was rejected.
2. The Commissioner (Appeals) held that so far as supplies made to DOT, refund of the amounts of the duty of excise paid were required to be made. However, he held that the refund of only the amounts were initially debited in PNA could be made and in the amounts debited to RG23A Part II (Modvat amount) they could not be refunded. He observed that the appellants were not entitled to Modvat credit as per Rule 57C of the Central Excise Rules, 1944. Thereby such amounts were not refundable. He also held that the appellants were not eligible to interest of Rs. 48,37,376/- and Rs. 11,35,791/- claimed on cable jointing kits and sub-kits as the same were not covered by Section 11BB of the Central Excise Act. Amount of Rs. 62,10,663/-claimed as refund inspite of the duty paid on cable jointing sub-kits was rejected on the ground that the appellants have passed the burden of the said amount to parties to whom such goods were supplied.
3. The present appeal is against this denial of refund of the duties paid through RG23A Part II amounting to Rs. 1,19,485/-.
4. We have heard both sides and considered the matter and find that :-
(a) Payment of duty by Debiting RG23A Part II is also payment of duties levied under the Central Excise Act, 1944. When the Hon’ble High Court held that the cable jointing kits are not exigible and no manufacture is involved in placing of articles in one kit and the SLPs filed by the Department on the same issue
have been dismissed by Hon’ble Supreme Court [1999 (107) E.L.T. A185 (S.C.)] then there was no case ab initio for levy of any duty under the Central Excise Act, 1944. If such a duty was levied and or recovered the same is required to be refunded. Duties which have been discharged by debit in RG23A Part II, are therefore required to be restored in the RG23A Part II registers, by a reversal of entry in the said registers. We agree with the plea made by the ld. Consultant that if the appellants are not eligible for the credit on the inputs per se the kits, i.e, final product, for which the inputs were brought and used have been held to be non-excisable, then a separate proceedings for denial of the Modvat credit not admissible should have been launched. We agree with the propositions so made.
5. In view of our findings and seeing there are no other issues raised in the appeal before us, we would modify the Commissioner’s orders by directing that the RG 23A Part II records should be ordered to be credited with the debits of duty made in the RG23A registers, thereafter the Department is at liberty to take such action as permissible under law to deny the availment of Modvat claim. This appeal is therefore disposed off in the above terms.