2008 (7) TMI 90

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....e Cross Objection filed by the Respondents is also taken up for hearing together. Briefly stated the facts of the case are that the Respondents paid Central Excise Duty on the impugned goods described as "Compound No. 69/83 Super", "Compound Special R.S." and "Compound SR 36" and subsequently claimed refund of the duty paid under the Area Based Notification No. 32/99-C.E., dated 8-7-1999. The Department has accepted the duty paid by the Respondents, but denied them refund of the same under the cited Notification on the ground that the impugned goods are not manufactured products and therefore, not covered by the said Notification for grant of cash refund. 2. On appeal to the lower Appellate Authority, the Respondents have been allowed th....

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.... as Credit under Rule 12 of the Cenvat Credit Rules, 2004. He states that the Parent Law namely Central Excise Act, 1944 does not allow grant of a double benefit by cash refund of the duty paid and then grant of Credit of same amount and hence, Rules framed under Section 37 of the Parent Act cannot permit grant of such a double benefit and any Rule made to that effect will be ultra vires the Parent Act. Dr. Samir Chakraborty, learned Advocate for the Respondents states that the mischief of grant of double benefit lies in Rule 12 of the Cenvat Credit Rules, 2004, but the Respondents are not concerned with that, since the Credit under the cited Rule accrues to a third party who has purchased the impugned goods from the Respondents. Since the ....

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.... held as ultra vires the Parent Act. However, we refrain from going into the vires of the said Rule 12 of the Cenvat Credit Rules, 2004 in this case, as the third party who has availed the Credit under the said Rule is not a party in this case before us. The admissibility of the Duty Credit under the said Rule is also not an issue in this Appeal. When such a question arises in an appropriate case, we would then consider the vires of the said Rule 12. 7. In this case, the only issue we have to decide is whether the Respondents are eligible for refund of the duty paid by them. There are two possibilities. If the impugned goods are not manufactured products and/or are not marketable, then the same cannot be held to be excisable. In that eve....