Rakesh Kumar Garg, J. - (1.) THIS appeal under Section 35G of the Central Excise Act, 1944 is directed against the order (Annexure A -3) dated, 27th July, 2006 passed by the Customs Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi allowing the Excise Appeal No. 4605 of 2004, arising out of the order -in appeal No. 209/AKG/GGN/2004 dated, 7th June, 2004 passed by the Commissioner (Appeals), Central Excise, Delhi -III, Gurgaon.
(2.) BRIEF facts giving rise to this appeal are as under: The Respondent -assessee, who is a merchant exporter of Pharmaceuticals products, filed a refund claim of Rs. 9,69,250 in the office of Asstt. Commissioner Central Excise Division -II, Gurgaon on 21st June, 2002 claiming therein that during the year 2001 -2002 the company imported 96 kgs of raw material called "Prednisolone Sodium Phosphate" on which an amount of duty in the form of CVD (Counter Veiling Duty) for Rs. 9,69,250 was paid and the company got manufactured their product called "Prednisolone Sodium Phosphate injection BP" from one of their loan licencee M/s Getwell Pharmaceuticals. It was further claimed that the total raw material was used in manufacture of final product by the loan licencee and the goods manufactured were exported out of India and that no MODVAT/CENVAT was availed by them or by their manufacturer namely M/s Getwell Pharmaceuticals on the consumption of 96 kgs of the aforesaid raw material to manufacture 6,24,172 packs of the Prednisolone injection and that since CVD amounting to Rs. 9,69,250 has been paid by them on excisable material used in the manufacture of the goods so got manufactured from loan licencee and exported out of India, and since the incidence of payment of duty has not been passed on to any other person, refund of duty amounting to Rs. 9,69,250 may be granted to them. The Asstt. Commissioner C.E Div. II, Gurgaon vide its order dated, 29th September, 2003 while rejecting the claim of the assessee for refund under Section 11 -B of the Central Excise Act 1944 observed as under: I observe that the party imported certain raw materials and paid counter veiling duty thereon at the time of importation. They got the Medicaments (Prednisolone Injections) manufactured from M/s Getwell Pharmaceuticals, 474, Udyog Vihar, Phase V on loan licence basis and exported their products & claimed refund of Counter Veiling Duty of Rs. 9,69,250 as the duty was borne by them & the incidence of the duty was not passed on to any other person. Since it appeared that under Section 11 -B of the Central Excise Act, 1944 refund of any "duty" of excise was allowed if the conditions prescribed therein are fulfilled. It also appeared that since duty of Excise leviable under Section 3 of the Central Excise Act, 1944 was allowed to be refunded & not CVD charged under Section 3(1) of the Customs Tariff Act, 1975, a show cause notice was issued to the party as to why the refund of CVD of Rs. 9,69,250 should not be disallowed. It was also pointed out that claim in respect of one of the bills of entries was time barred and also original bill of entry was not filed in respect of another claim. The party in their defence reply stated that since the CVD was collected as Central Excise Duty by the Department they were entitled to claim Cenvat Credit as the Bill of entry was admissible under Rule 7 of the CENVAT Credit Rules, 2002 for claiming CENVAT. It was further submitted that CVD represented additional Customs Duty i.e. Central Excise Duty for the time being leviable on the like articles, if produced or manufactured in India, the same was be available for CENVAT Credit to the manufacturer in India. It is true that CVD paid at the time of importation is equal to excise duty for the time being leviable on the like articles produced or manufactured in India and the manufacturer of the final product is entitled to CENVAT Credit of this Additional Duty leviable under Section 3 of the Custom Tariff Act paid on any inputs received in the factory and that the bill of Entry is a legal document for Cenvat Credit Purpose under Rule 7(1)(c) but the stage for refund of CENVAT Credit arises only after the CENVAT Credit on the inputs has been availed and under the CENVAT Credit Rules the manufacturer is also required to maintain proper Accounts for receipt, disposal, consumption and inventory of the inputs and is also required to submit monthly return in the prescribed form. Since the party didn't take CENVAT Credit of the CVD paid on the inputs the provisions regarding CENVAT Credit Rules 2002 as stated by the party in their defence reply appeared misplaced. This is a case of refund of CVD in respect of the materials used in the manufacture of excisable goods exported out of India and as such the refund of CVD charged under Customs Tariff Act, 1975 is not covered under the Section 11 -B of the Central Excise Act, 1944. Further the party filed the refund claim under Section 11 -B of the Central Excise Act, 1944 which presented a time limit of 1 year from the "relevant date" since the duty in respect of B.E. No. 140911 dated, 4th May, 2001 was paid on 8th May, 2001 the claim in respect of the BE is time barred per -se. The various case laws as referred to by the party only go to confirm that additional custom duty (CVD) is equal to excise duty for the time being leviable on the like articles produced or manufactured in India and the excise duty for the time being & that the party is entitled to MODVAT Credit of the CVD paid but none of the judgments cited/quoted by the party refer to refund of CVD under Section 11B Central Excise Act, 1944 as the Section ibid refers to refund of any duty of Excise which in turn covers only the duties specified in the first schedule & the second schedule to the Central Excise Tariff Act, 1985. The refund claim of the party is, therefore, liable to be rejected. The assessee filed an appeal against the said order before Commissioner of Central Excise (Appeals) Gurgaon. However, the appeal filed by the assessee was rejected by the Commissioner of Central Excise (Appeals) vide its order dated, 7th June, 2004 and it was observed as under: The refund claim filed by the Appellant under Section 11 -B has been rejected by the original authority mainly on the ground of non -applicability of Section 11B of the Central Excise Act, 1944 to the refund of Additional Customs Duty i.e. CVD and party on account of time bar. I will first discuss the main issue of applicability of the provisions of Section 11 -B of the Act to the refund claim of Additional Customs Duty. Under Section 11 -B of the Central Excise Act, 1944, the opening paragraph of Sub section (1) clearly states that any person claiming refund of any duty of Excise may make an application for refund of such duty to the Asstt. Commissioner or the Deputy Commissioner of Central Excise before the expiry of one year from the relevant date. The duty of Excise is leviable on all excisable goods which are produced or manufactured in India at the rates set forth in First and Second Schedule to the Central Excise Tariff Act, 1985 as per the authority of Section 3 of the Central Excise Act, 1944. The Additional Customs duty is leviable on the imported articles under Section 3 of the Customs Tariff Act, 1975. The Central Excise duty is only a measuring yardstick for calculation of the Additional Customs duty i.e. counter veiling duty as laid down in Section 3 of the Customs Tariff Act, 1975 which cannot be equated with Central Excise Duty. From the provisions of Section 11 -B, it is clear that this Section deals only with refund of duty of Excise and not the refund of the Additional Customs Duty i.e. CVD. The claim of the Appellant is for refund of CVD which is clearly not covered under this Section. Reliance placed by the Appellant on the Hon'ble Supreme Court judgment reported as is totally misplaced. No where it has been held in the cited case that CVD can be treated as Central Excise duty for all purposes including refund. Thus, I agree with the original authority that CVD cannot be equated with the duty Excise. The refund of CVD, is therefore, not admissible under Section 11 -B of the Central Excise Act, 1944 and has been rightly so held by the original authority. The point of limitation raised by the Appellant is not relevant at this stage as the claim is held as not covered under the provisions of Section 11 -B as discussed above.
(3.) AGGRIEVED against the order of the lower authorities, the assessee preferred an appeal before the Customs, Excise & Service Tax Appellate Tribunal, New Delhi. The Tribunal after considering the various provisions of the Central Excise Act and Customs Tariff Act and the submissions made by the rival parties held that Sub -section 2 (a) of Section 11 -B of the Central Excise Act, 1944 clearly envisaged that the rebate of duty on excisable goods exported or on excisable material used in the manufacture of goods which are exported, are eligible for refund. Accordingly, the appeal filed by the assessee was accepted and the impugned order passed by the Lower Revenue Authorities rejecting the claim of the assessee for refund of duty was set aside.;