The modvat credit availed by the assessee was used for payment of excise duty, though under protest and there is no provision for cash refund of such duty paid through modvat credit. It is also relevant to consider Rule 57L of the Rules which says that no credit of money on the inputs used in the manufacture of the final products shall be allowed if the final products are exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty. In this case, by the time of the judgment of this Court, the duty was paid from the input credits availed by the assessee. Both the authorities concurrently held that those credits cannot be reversed and there is no provision for reversal of the same.
But the Tribunal directed that RG23A Part II should be ordered to be credited with the debits of duty made in the RG23A registers and the Department was given liberty to take such action as permissible under law to deny the availment of modvat claim. Since, in the instant case, the said credit was utilized for payment duty, we do not think it proper to direct the authorities to reverse the entries in RG23A registers by giving them liberty to deny the availment of modvat claim at a later point of time. Such a course of action has no sanction in law. The learned counsel for the assessee also could not show us any provision of law for reversal of entries, as ordered by the Tribunal.
In the circumstances, we are of the opinion that the view taken by the Tribunal for reversal of entries in RG23A Registers consequent to the orders of this Court in W.P.No.22078 of 1997 and batch dated 02.02.1998 is not correct. In view of the same, we hold the substantial questions raised in the appeal in favour of the Revenue and against the assessee.
Andhra Pradesh High Court
THE HONBLE SRI JUSTICE DILIP B.BHOSALE AND
THE HONBLE SRI JUSTICE A.RAMALINGESWARA RAO
CENTRAL EXCISE APPEAL No.24 of 2004
Date- 30/04/2015
The Commissioner, Customs & Central Excise
Vs.
M/s.Surana Telecom Limited
Counsel for the Petitioner : Sri Jalakam Satyaram- Standing Counsel for Central Excise
Counsel for the Respondents: Sri S.Ravi
Cases referred :
1. 1997 (95) ELT 217
2. 1995 (77) DLT 407
3. 1993 (66) ELT 635
4. 1991 (51) ELT 238 (Bombay)
5. AIR 1989 SC 1496
6. 1997 (89) ELT 247 (S.C)
JUDGMENT: (per the Honble Sri Justice A.Ramalingeswara Rao)
This Central Excise Appeal is filed under Section 35(G) of the Central Excise Act, 1944 (for short, the Act) against the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore (for short, the Tribunal) in Final Order No.680/2004 dated 25.03.2004 in Appeal No.E/467/2000.
2. The following substantial questions of law were framed and fell for our consideration.
a) Whether duty paid through Modvat Credit account on the clearances of cable jointing kits prior to their exemption from excisability as held by Honble High Court of AP can be granted as refund, even though the refund claim was barred by limitation of time under Section 11B of Central Excise Act, 1944?
b) Whether Modvat credit be allowed on the inputs used in the exempted final products i.e., cable jointing kits as against the provisions of Rule 57F of Central Excise Rules, 1944?
c) Whether modvat credit accrued on inputs that go into the manufacture of exempted cable jointing kits and used for payment of duty on clearances of such kits can be allowed against the provisions of Rule 57F of Central Excise Rules, 1944?
3. The respondent assessee is in the business of manufacture of cable jointing kits falling under chapter sub-heading No.8547.00 of Central Excise Tariff Act, 1985. The assessee paid the excise duty of an amount of Rs.1,01,92,689/- out of which an amount of Rs.95,56,264/- was allegedly paid under protest, whereas an amount of Rs.6,36,425/- was paid in respect of supplies made to others. The said amount of Rs.95,56,264/- was paid on the goods
cleared to Department of Telecom which was not reimbursed by the Department of Telecom and the details of duty paid are as follows:
BREAK UP OF DUTY PAYMENT PARTICULARS
