2013 (1) TMI 96 - HC - Central Excise

Court dismisses appeal on refund claims due to CENVAT Credit limits; emphasizes need for circular awareness.

COMMISSIONER, CENTRAL EXCISE & CUSTOMS, AHMEDABAD – II Versus M/s RANGDHARA POLYMERS

The court dismissed the appeal concerning refund claims for unutilized CENVAT Credit due to the monetary limits set by circulars issued by the CBEC. ... Limit prescribed for preferring the appeal - Refund claim for unutilized CENVAT Credit - Held that:- Since in the instant appeal the amount involved is Rs.1,87,623/- only, in view of the circular dated 20.10.2010, it is below monetary limit prescribed for preferring the appeal. As after circular dated 17.08.2011, no other circular has been issued by the Ministry of Finance, Department of Revenue Central Board of Excise and Customs, Government of India, New Delhi, authorizing the Department to file appeals where the amount is less than Rs. 10 lacs. Issues Involved:1. Interpretation of Rule 5 of the Central Excise Rules, 2004 and Notification No. 5 / 2006-C.E. (NT) dated 14.03.2006 regarding refund claims for unutilized CENVAT Credit.2. Interpretation of Section 11B of the Central Excise Act, 1944 concerning the one-year limitation period for filing refund claims and its applicability to 'deemed exports'.3. Applicability of monetary limits for filing appeals as per the circulars issued by the Central Board of Excise & Customs (CBEC).Issue-wise Detailed Analysis:1. Interpretation of Rule 5 of the Central Excise Rules, 2004 and Notification No. 5 / 2006-C.E. (NT) dated 14.03.2006:The primary issue was whether the tribunal erred in allowing the refund claim for unutilized CENVAT Credit by treating the supply of materials to Export Oriented Units (EOUs) as 'deemed export'. The tribunal's interpretation of Rule 5 of the Central Excise Rules, 2004, and Notification No. 5 / 2006-C.E. (NT) dated 14.03.2006 was contested by the Revenue. The tribunal had allowed the refund claim for the assessee, which the Revenue argued was an error.2. Interpretation of Section 11B of the Central Excise Act, 1944:The second issue revolved around whether the tribunal ignored the one-year limitation period for filing refund claims under Section 11B of the Central Excise Act, 1944. The Revenue contended that the tribunal incorrectly concluded that Section 11B is silent on 'deemed export' and hence the limitation does not apply. The tribunal's decision to allow the refund claim despite the time-bar was challenged.3. Applicability of Monetary Limits for Filing Appeals:The court considered the circulars issued by the CBEC, which set monetary limits for filing appeals. Circular dated 20.10.2010 fixed a limit of Rs. 2 lakhs for filing appeals before the High Court, which was later increased to Rs. 10 lakhs by the circular dated 17.08.2011. The court noted that the subject matter of the appeal involved a refund claim of Rs. 1,87,623/-, which was below the prescribed monetary limit.Conclusion:The court decided not to delve into the merits of the appeal due to the monetary limits set by the circulars. It was noted that the appeal was filed before the circular dated 20.10.2010 came into force, but when the appeal was considered on 31.03.2011, the circular was already in effect. The court emphasized that the Department should have brought the circular to its notice, which would have prevented the issuance of the appeal. The court concluded that since the amount involved was below the monetary limit prescribed for filing appeals, the appeal was dismissed, keeping the question open for decision in an appropriate case.