T.K. Jayaraman, Member (T)
1. Revenue has filed this appeal against O-I-A Nos. 97-99/03-C.E., dated 27-8-03 passed by the Commissioner of Central Excise (Appeals), Hyderabad.
2. The brief facts of the case are as follows :
The respondents filed refund claim for unutilised Cenval under the provisions of Rule 5 of the Cenvat Credit Rules, 2002. The Assistant Commissioner allowed the refund of Cenvat credit lying unutilised in their BED account but disallowed the Cenvat credit lying unutilised in their AED account. The respondents appealed to the Commissioner (Appeals). The Commissioner (Appeals) on the strength of C.B.E.C. Circular No. 700/16/2003-C.Ex. dated 6-3-03 and another circular dated 12-3-03 held that the appellants are eligible for refund of unutilised credit of AED. The Revenue is aggrieved with the order of the Commissioner.
3. The grounds of the appeal of the revenue are that in the instant case, the assessee could not have used AED had he cleared the goods for home consumption for the simple reason that the final products in this case do not attract AED. In other words, if the goods had been cleared for home consumption, the respondents could have utilised only the BED portion of the credit. Revenue came to the above conclusion while interpreting Rule 5 of the Cenvat Credit Rules which is reproduced below.
"Rule 5. Refund of Cenvat credit. - where any inputs are used in the final products which are cleared for export under bond or letter of undertaking as the case may be, are used in the intermediate products cleared for export, the Cenvat credit in respect of the inputs so used shall be allowed to be utilised by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment (emphasis added) is not possible the manufacturer shall be allowed refund of such amount (emphasis added) subject to such safeguards, condition and limitations as may be specified by the Central Government by Notification."
4. None appeared for the appellants. Shri R.N. Viswanath learned SDR appeared for the Revenue.
5. The learned SDR brought to our notice the amendment in the Cenvat Credit Rules, 2002 by which the Cenvat credit may be utilized for payment of any duty of excise on any final product. Further the following explanation to Clause (B) of Sub-rule (6) of Rule 3 in the Cenvat Credit Rules, 2002 has been added. The said explanation is as follows :
"Explanation.- For the removal of doubts, it is hereby declared that the credit of the additional duty of excise leviable under Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and paid on or after the 1st day of April, 2000, may be utilised towards payment of duty of excise leviable under the First Schedule or the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)."
6. The SDR contended that the above amendments are in favour of the respondents.
7. After going through the records of the case, we find that the order of the Commissioner (Appeals) is legal and proper. While allowing refund of AED, she has followed the Board's circulars. Moreover, the rules also have been amended for utilising the credit of AED towards payment of other duties of excise leviable under the 1st Schedule or the 2nd Schedule to the Central Excise Tariff Act also. In view of the above position, we reject the Revenue's appeal.
(Pronounced and dictated in open Court)