By TIOL News Service

MUMBAI, SEPT 26, 2017: THE appellant is a manufacturer of fabrics and cleared the same under Bond vide Form AR-3A (permission for removal of excisable goods from factory or a Bonded Warehouse to another warehouse) during the period 28.11.2001 to 1.1.2002.

The appellant had availed credit of duty of Rs.81,875/- in respect of inputs and which was lying unutilized pursuant to clearance of fabrics to 100% EOU, under Bond.

An Application for refund was submitted in the prescribed form ‘A' together with copy of the re-warehousing certificate issued by the receiver of the goods i.e. 100% EOU (M/s Haria Export Ltd.) duly countersigned by Superintendent of Central Excise. The refund was sanctioned by the original authority.

In the first round of litigation, the matter had travelled to the Tribunal when by final order dated 14.12.2005, the Tribunal remanded the matter back to the original adjudicating authority for verification as to whether actual export had taken place.

In remand, the original authority held that mere submission of re-warehousing certificate was not enough to prove the claim of export as the 100% EOU had shut shop four years ago and no export documents could be obtained by appellant. The Commissioner (A) rejected the appeal on the ground that clearance of goods to EOU does not amount to ‘actual export'.

Before the CESTAT in the second round, the appellant submits that the original authority had exceeded the direction in the remand, which was for verification to the export made i.e. to verify the fact of export from the 100% EOU, which was not done and unnecessarily got into the issue of export vis-à-vis deemed export; that Rule 5 of CCR does not require that the goods must be directly exported from the factory. Reliance is placed on the decision in

Shilpa Copper Wire Industries - 2008-TIOL-2789-CESTAT-AHM in support.

The AR relied on the decision in Tricolite Electrical Indus. Ltd. - 2012-TIOL-1266-CESTAT-DEL and further submitted that although supplies to SEZ are treatable as export under Section 2(m) of SEZ Act, 2005, in absence of evidence of goods used by 100% EOU/SEZ in manufacture of finished goods exported under Bond, the rejection of refund claim is proper.

The Bench observed -

++ I find that Appendix to Notification No. 11/2002-CE(NT) wherein clause (4) provides that manufacturer (appellant) is required to submit refund application along with Bill of Lading or shipping bill or export proof duly certified by any Officer of Customs, to the effect that the goods have in fact been exported.

++ There is no ambiguity in the requirement as the documents referred to under clause (4) are only available in case of actual export and not deemed export. The appellant herein have admittedly failed to furnish the evidence of actual export in spite of opportunity in the second round of litigation. Thus, the rejection of claim by the learned Commissioner (Appeals) is correct and in accordance with law.

The appeal was dismissed.

The CESTAT noticed that the appellant had already paid back 50% of the refund as directed vide stay order dated 1.3.2013 and, therefore, directed the appellant to deposit the balance refund received and report compliance within a period of 90 days.

(See 2017-TIOL-3484-CESTAT-MUM)