2020 (1) TMI 1451

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.... The appellant has been availing benefit of Notification No.32/99-CE dated 08.07.1999 as applicable to specific areas in the State of Meghalaya. During the period October 2006 to February 2007, the appellant removed capital goods, namely, Sub-merged Arc Furnace after using the same in the factory; it filed a refund claim at the end of the month in terms of Notification and such refund was granted. 3. Revenue issued a show-cause notice dated 24 September 2007 proposing to recover the refund granted alleging that the same was erroneously granted; the said show-cause notice was issued under the provisions of Section 11A of Central Excise Act, 1944; the Show-cause notice was confirmed by the learned Commissioner of Central Excise, Shillong vid....

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....as High Court in the case of Ponds (India) Ltd. Vs. Assistant Collector of Excise, Madras as reported in 1994 (73) ELT 272 (Mad.); impugned goods in the case before the Hon'ble Guwahati High Court, were the goods manufactured by the appellant therein, but not the goods procured by them. The learned Authorised Representative for the Revenue, relies on the judgment of the Hon'ble Supreme Court in the case of Grasim Industries Ltd. Vs. Commissioner of Central Excise, Bhopal as reported in 2011 (271) ELT 164 (S.C.), wherein it was held that in order to recover the refund, Section 11A is the appropriate remedy. 6. We find that there are two issues involved in the instant appeal that require our attention. The first one is on the applicability o....

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.... A indicates that it would be operational even in cases of erroneous refunds whether or not such refunds relate to assessment. In the operation of Notification No 32/99, the assessee is required to pay the duty initially and then claim it as a refund at the end of the month. In view of the same, we are not inclined to accept the contention of the learned Counsel for the appellant. We find that the Commissioner has deliberated in a detailed manner on the issue as to whether, the amount that is payable in terms of sub-rule (5) of Rule 3 of the Cenvat Credit Rules, 2004, is a duty or an amount. We find that going by a plain reading of the provisions of the Rule, it is an amount. The only concession given to the manufacturer is that they can cl....

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....rs expenses to increase the capacity of the existing factory in the specified area with a view to boost the industrial infrastructure. Therefore, we find that the exemption contained therein, though made operational through a refund mechanism, shall be applicable to the goods manufactured by the units and not to goods procured and later cleared by the manufacturer. Cenvat Credit has been allowed to manufacturers to reduce the cascading effect of taxation and as such manufacturers were allowed to avail the credit of duties paid on inputs and Capital goods. A provision has been made in the Cenvat Rules to allow the manufacturers to remove the inputs and Capital Goods as such or after use by debiting the credit availed by them or by paying an ....