Central Excise Appeal No. 66 of 2005. Case: Commissioner of Central Excise Vs Bharat Chemicals. High Court of Bombay (India)
| Case Number | Central Excise Appeal No. 66 of 2005 |
| Counsel | For Appellant: Shri A.S. Rao a/w. S.D. Bhosale, Advocate. and For Respondent: Shri D.H. Nadkarni i/b. M/s. Legal Solutions, Advocate. |
| Judges | S.C. Dharmadhikari and Sunil P. Deshmukh, JJ. |
| Issue | Central Excise Rules, 1944 |
| Citation | 2015 (320) ELT 337 (Bom) |
| Judgement Date | February 26, 2015 |
| Court | High Court of Bombay (India) |
Order:
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This appeal has been admitted on the following substantial question of law:
Where the assessee has cleared the manufactured goods for export on payment of Excise duty at 20% by debiting the Modvat Credit Account and subsequently obtained rebate of the said duty paid under Rule 12 of the Central Excise Rules, 1944 and later on if it is found that the correct duty payable was 10%, whether the Excise authorities can claim cash payment of the excess duty debited to the Cenvat Credit Account?
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Mr. A.S. Rao, appearing in support of the Appeal would submit that very few facts are required to be referred by this Court for determining this question of law. The respondent assessee is engaged in manufacturing of Paracetamol (bulk drug) falling under Chapter sub-heading No. 2907.90 of Central Excise Tariff Act, 1985. It is chargeable to duty @ 10% Adv. in terms of Notification No. 6 of 1994 dated 1st March, 1994. Thus, for purpose of both home consumption and export, the assessee can clear the goods and at the stage of removal thereof, he is required to pay Adv. Duty @ 10% in terms of this notification, which benefit has been availed of by the assessee in both situations, namely of export and home consumption. However, in one particular clearance and for export, the assessee paid duty at 20% and utilised excess Modvat credit on the goods cleared for export. Therefore, the Range Superintendent issued a show cause-cum-demand notice dated 3rd October, 1994, requiring it to show cause why the sum of Rs. 5,54,600/- should not be recovered from the assessee under Rule 57-I of the Central Excise Rules, 1944.
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Mr. Rao submits that the Assistant Commissioner, Central Excise passed an order of adjudication on 28th March, 1996, and he confirmed the demand. This order was upheld partially by the Commissioner (Appeals), by his order dated 26th July, 1998.
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Mr. Rao would submit that in the clearance of the same product for export and against the tariff rate, the claim of rebate of duty could have been made in terms of Rule 18 of the Central Excise Rules, 2002. However, since the amount of 20% of the duty at tariff rate was paid from the accumulated credit in the Modvat account namely RG 23 Part II, then, this rebate or refund was not admissible. Mr. Rao would submit that this is a clear case of an erroneous refund within the meaning of Rule 57-I of the Central Excise Rules, 2002. The confirmation of show cause notice and the demand partially by the...
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