1991 (9) TMI 191 - AT - Central Excise

Tribunal affirms export duty refund eligibility under Rule 57F(3) despite payment method, Collector's appeal dismissed (3)

COLLECTOR OF CENTRAL EXCISE Versus KOTHARI GENERAL FOODS CORPN. LTD.

The Tribunal upheld the refund eligibility under Rule 57F(3) for duty paid on exported goods, emphasizing that the method of duty payment, whether through ... Refund Issues:1. Refund eligibility under Rule 57F(3) for duty paid through RG 23A Part II.2. Interpretation of Rule 57F(3) regarding duty liability discharge.3. Applicability of MODVAT credit and refund provisions under the MODVAT Scheme.4. Dispute over refund for duty paid on exported goods packed in OTS Cans.5. DEEC Scheme implications on duty payment and refund eligibility.Issue 1: Refund eligibility under Rule 57F(3) for duty paid through RG 23A Part IIThe appeal was filed by the Collector of Central Excise, Bangalore, challenging the order of the Collector of Central Excise (Appeals), Madras, regarding the grant of refund under Rule 57F(3) for duty paid on exported Instant Coffee packed in OTS Cans. The Department contended that the refund granted should not cover duty paid through RG 23A Part II. The Tribunal held that the refund eligibility under Rule 57F(3) does not differentiate between duty paid through PLA or RG 23A Part II. The Tribunal dismissed the appeal, emphasizing that the refund cannot be denied based on the method of duty payment when MODVAT credit is availed and refund is claimed under Rule 57F(3).Issue 2: Interpretation of Rule 57F(3) regarding duty liability dischargeThe Tribunal considered the submissions made by both parties regarding the discharge of duty liability under Rule 57F(3). The Collector (Appeals) had allowed the refund claim, highlighting that the duty was paid by the suppliers of OTS Cans through RG 23A Part II. The Tribunal observed that the Trade Notice clarified that rebate could be sanctioned for duties paid through RG 23A Part II under the MODVAT Scheme. The Tribunal concluded that the duty payment method should not restrict the refund eligibility under Rule 57F(3, emphasizing that the duty liability discharge method does not impact the refund entitlement.Issue 3: Applicability of MODVAT credit and refund provisions under the MODVAT SchemeThe Tribunal addressed the utilization of MODVAT credit and the refund provisions under the MODVAT Scheme in the context of the refund claim for duty paid on exported goods. It was noted that the respondent, an exporting unit, had availed MODVAT credit and sought a refund under Rule 57F(3). The Tribunal emphasized that the MODVAT credit utilization should not affect the refund entitlement, especially when the duty liability on exported goods had been discharged. The Tribunal upheld the refund claim, emphasizing that the MODVAT credit utilization should not hinder the refund process under Rule 57F(3).Issue 4: Dispute over refund for duty paid on exported goods packed in OTS CansThe dispute revolved around the refund claim for duty paid on goods exported in OTS Cans. The Department contested the refund eligibility based on the duty payment method through RG 23A Part II. However, the Tribunal held that the refund claim for duty paid on exported goods should not be restricted based on the method of duty payment. The Tribunal emphasized that the duty payment method should not impede the refund entitlement under Rule 57F(3) when the duty liability on exported goods has been discharged.Issue 5: DEEC Scheme implications on duty payment and refund eligibilityThe appellant-Collector raised concerns regarding the DEEC Scheme implications on duty payment and refund eligibility for goods exported in OTS Cans. The appellant argued that the suppliers of the Cans, operating under the DEEC Scheme, were not entitled to a refund for duty paid through RG 23A Part II. However, the Tribunal noted that the goods exported had discharged the full duty liability, and the duty payment method should not hinder the refund entitlement. The Tribunal dismissed the appeal, emphasizing that the DEEC Scheme should not impact the refund eligibility under Rule 57F(3) when the duty liability on exported goods has been fulfilled.