AJAY KUMAR MITTAL, J. - (1.) This appeal has been preferred by the revenue under Section 35H(1) of the Central Excises and Salt Act, 1944 (in short, "the Act") against the orders, dated 9-2-2004 [(2004 (175) E.L.T. 339 (Tri.-Del.)] and 26-3-2004, Annexures P. 7 and P. 8 passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi (in short, "the Tribunal"). On 24-1-2005, the appeal was admitted to consider the following substantial questions of law:- "(a) Whether Hon'ble CESTAT was legally correct in holding that cash refund of Modvat credit on inputs used for manufacture of goods exported shall be allowed in cases where the manufacturer/exporter has not tried to utilize the credit for payment of duty on the goods cleared for export or for home-consumption as stipulated under Rule 57F(13) of Central Excise Rules, 1944? (b) Whether the CESTAT was legally correct in holding that it was mandate on the revenue to allow the manufacturer to utilize the credit of specified duty in respect of inputs towards payment of duty on any final product cleared for home consumption or for export on payment of duty and it was not a mandate on the assessee?" A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The respondent-assessee is engaged in the manufacture and export of primary batteries and cells falling under Chapter heading 8506 of Central Excise Tariff Act, 1985. Refund claims were filed by the assessee under Rule 57F(13) of the Central Excise Rules, 1944 (in short, "the Rules") on the ground that it had exported most of the manufactured goods under bond and had a balance of Modvat credit in RG23A Part II as unutilized. The Deputy Commissioner, Central Excise Division I, Gurgaon vide letter, dated 12-11-1999, Annexure A. 1 rejected the claim on the ground that full duty was refundable in case where the goods were cleared on payment of duty for export under Rule 12(1)(a) of the Rules and in the instant case, since the goods had been exported under bond without payment of duty, the said refund claims did not fall under any of the provisions of Rule 57F(13) or Rule 12(1)(a) of the Rules. Aggrieved by the order, the assessee filed appeal before the Commissioner (Appeals). Vide order, dated 9-3-2000, Annexure A. 2, the Commissioner (Appeals) remanded the matter for de novo decision by processing the application for refund under Rule 57F(13) of the Rules. The claim was again examined by the original authority and the same was rejected vide order, dated 24-4-2001, Annexure A. 3. Thereafter, the assessee again filed appeal before the Commissioner (Appeals). Vide order, dated 15-9-2003, Annexure A. 6, the appeal was dismissed. Aggrieved by the order, the assessee filed appeal before the Tribunal. Vide order, dated 9-2-2004, Annexure A. 7, the appeal was allowed and the order, dated 15-9-2003 passed by the Commissioner (Appeals) was set aside. Hence the present appeal by the revenue.
(2.) Learned counsel for the revenue submitted that the assessee was not entitled to refund of Modvat credit in terms of Rule 12(1)(a) or 13 or Rule 57F(13) of the Rules. He relied upon the findings recorded by the Assessing Officer as well as the Commissioner (Appeals).
(3.) On the other hand, learned counsel for the assessee relied upon judgment of the Bombay High Court in Associated Aluminium Industries Pvt Ltd. Vs. Union of India, and urged that the assessee was entitled for benefit of refund of Modvat credit in terms of Rules 12 and 13 of the Rules and the same was to be refunded to the respondent under Rule 57F(13) of the Rules.;