By TIOL News Service

MUMBAI, OCT 30, 2017: THE appellant had exported certain goods and claimed rebate of the Central Excise duty paid on the same.

The rebate was denied on the ground of time bar by the original adjudicating authority, the Commissioner (Appeals) as well as JS (RA).

The original adjudicating authority as well as the Commissioner (Appeals) while rejecting the rebate claim allowed the appellant to take back the credit of the duty paid as CENVAT Credit.

However, JS (RA) while rejecting the rebate claim also denied the availment of credit which was ordered by the lower authorities.

Incidentally, two appeals came to be filed by the appellant in view of the above orders -

(a) First appeal is in respect of demand of interest for the period from when the appellant took credit up to the stage of reversal. This credit was availed as a result of the order of the original adjudicating authority and first appellate authority and which was later on reversed by the order of the JS (RA).

It is argued that in terms of Section 11B clause (ec) of the explanation, the appellants are required to pay interest only from the date of the order of JS (RA) and not from the date when they had taken the credit.

(b) The second appeal relates to the suo moto availment of credit on an estimate basis by the appellant on the exports made by them in respect of which the rebate claim was rejected.

It is submitted that they are entitled to the said credit as no taxes can be exported. For this assertion, reliance is placed on the decision in Jobelle - 2006-TIOL-1203-CESTAT-MUM.

The AR supported the orders.

The Bench inter alia observed -

In the matter of the first appeal:

++ While rejecting the rebate claim, the original and first appellate authorities permitted availment of Cenvat Credit of the duty paid while exporting the goods by the original adjudicating authority. The said credit was finally denied by JS(RA). The issue before the Tribunal is if the interest on this reversal is to be demanded from the date the appellant took credit or from the date, the JS(RA) ordered reversal of the same. Impugned order relies on the decision of the Hon'ble Apex Court in the case of Ind-Swift Laboratories Ltd. - 2011-TIOL-21-SC-CX, wherein it has been held that interest on wrongly taken credit can be demanded from the date of availment of the said credit. The appellants in their defence have sought to rely on the provisions of Section 11B which relates to refund. In the instant case the provision relating to demand would apply.

++ It is seen that the order-in-appeal in this regard observed as follows:

"…Thus Section 11AB (1) of the Act mandates to pay interest in addition to the duty erroneously refunded from the date of sanction of such erroneous refund till the date of payment of such duty. The unambiguous wordings of the aforementioned Section 11AB (1) leave no scope for interpretation."

++ I am in full agreement with the said observation and consequently the Appeal No. E/85726/14 is dismissed.

In the matter of the second appeal:

++ The second appeal relates to the availment of Cenvat Credit without any documents by the appellants on the basis of SION norms . The Cenvat Credit Rules permits availment of credit only in specific circumstances. It is not open to the appellant to take credit on estimated basis. Moreover, in the instant case, there is no basis for the appellant to avail the Cenvat Credit. The appellant had sought to take credit solely on the ground that the final goods manufactured out of the same were exported.

++ While in theory the said assertion is correct that when the goods are exported taxes should not be exported however for availing the said benefit certain restrictions in the shape of rules and Notification has been made. The exporter cannot, on his own devise a new method to avail credit which is not prescribed under the law.

++ I do not find any merit in the appeal, consequently the appeal No. E/88144/13 is also dismissed.

Both the appeals were dismissed.

(See 2017-TIOL-3829-CESTAT-MUM)