ORDER
Archana Wadhwa, Member (J)
1. A very short point is involved in the present appeal. The appellants are engaged in the manufacture of MMF (P) fabrics falling under Chapter 54 of the Central Excise Tariff Act, 1985 and were availing deemed credit of duty. Inasmuch as the appellants were exporting their finished goods, under bond, the deemed credit, so availed by them, was accumulated to the tune of Rs. 15,45,059/-. During the period between 1.10.1997 to 30.6.1998, they could utilise only an amount of Rs. 2,75,008/- for payment of duty in respect of clearances made for home consumption. Accordingly, they filed a refund claim of Rs. 12,70,051/- in terms of the provisions of Rule 57F(13) of the Central Excise Rules, 1944, as they stood, at the relevant time. The said refund claim was rejected by the authority below on the ground that the appellants have not been able to produce any concrete evidence to show that they were not in a position to utilize the deemed modvat credit accumulated in their deemed credit register or that they were prevented from utilizing the same by the department. Hence the present appeal.
2. We have heard Shri N.J. Gheewalla, the Ld Consultant for the appellants and Shri U.H. Jadhav, the Ld J.D.R for the Revenue.
3. The provision of Rule 57F(13) of the Rules provided for utilization of credit for payment of duty of excise on final products or if such adjustment is not possible, for refund of the same. For better appreciation, we reproduce the said rule:
(13) Where any inputs are used in the final products which are cleared for export under bond or used in the intermediate products cleared for export in accordance with Sub-rule (4), the credit specified duty in respect of inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification in the Official Gazette.
4. The appellants contention is that, on account of export of their goods under bond, such credit could not be utilized by them. In addition, they have also contended that Compounded Levy Scheme was introduced with effect from December 1998 and that they were forced by the department to pay duty of Rs. 1.50 lakhs per chamber from their PLA. This has resulted in accumulation of the credit. Our attention has been drawn to an order passed by Commissioner of Central Excise (Appeals) in the case of Ravi Exports Ltd, wherein a D.O. Letter No. 55/6/97-CX1 dated 13.7.1997 from the Chairman, CBEC to the Commissioner of Central Excise, Surat instructing realization of revenue of not less than Rs. 1.50 lakhs per month per working chamber was taken into consideration and it was accordingly held that Revenue consideration had swayed the officers to meet the revenue collection target and since payment from the modvat credit register, though a legal discharge of duty did not account towards the revenue targets, the officers under direction, insisted and obtained payment from PLA, so that the targets could be achieved. This has resulted in non utilization of Modvat credit in the register being maintained by the processors. The revenue filed a review application against the above order. The appeal filed against the above order was dismissed by the Tribunal, though on a technical ground.
5. Apart from the above, we find that the appellants had admittedly paid duty during the relevant period from their PLA, If duty would not have been paid from the PLA, the credit so available with the assessee would have been utilized for payment of duty. This could result in non accumulation of the same. No assessee benefits from accumulating the credit intentionally and paying duty out of PLA. If the duty paid out of PLA is reversed and the assessee allowed to debit the credit account, the dispute on the refund will not arise at all. This, in our view, is a clear revenue neutral situation. In any case, Rule 57F(13) allows refund of such amount where for any reason such adjustment like utilisation of credit towards payment of duty of excise on final products cleared for home consumption is not possible. Inasmuch as the appellants had admittedly not utilized the credit for payment of duty on clearances for home consumption, they are entitled to refund of the same. As such, we are of the view that the appellants should be granted the refund in terms of the said rule subject to any such conditions of limitation which will be specified by the Central Government.
6. The Appeal is disposed of in the above terms.
(Pronounced in Court on 27/1/06)