APARESH KUMAR SINGH,J. - (1.) Appellant is aggrieved by the order dated 29.05.2017 passed by the Learned Customs, Excise and Service Tax Appellate Tribunal (=CESTAT' for short), East Zonal Bench, Kolkata in Excise Appeal No. E/355/2012, whereunder order of the learned Commissioner (Appeals), Central Excise and Service Tax, Ranchi dated 16.04.2012, by which the CommCase of the Appellant:issioner (Appeals) set aside the order of the Assistant Commissioner, has been affirmed. The Assistant Commissioner of Central Excise, Central Excise Division, Bokaro had sanctioned the refund claim and directed the appellant to take credit of the refund amount in their Cenvat Credit Account vide his Order-in-Original No. 04/AC/REFUND/2010 dated 29.09.2010.
(2.) This appeal has been admitted on the following substantial questions of law: a. Whether in the facts and circumstances of the case and in law, an application for refund of countervailing duty is maintainable under Section 11B of the Central Excise Act? b. Whether in the facts and circumstances of the case, the order passed by learned CESTAT is bad in law and on facts? Case of the Appellant: The appellant is a Company within the meaning of Companies Act, 1956 engaged in the manufacture of Excisable goods, Opal Glassware and Kitchenware falling under Central Excise Sub-heading No. 7013 2900 / 7013 3900 respectively. During the course of business, appellant exported 880 dinner sets (124 pieces) valued at Rs. 33,50,160.00 and 1050 dinner sets (26 pieces) valued at Rs. 11,59,725.00 against ARE-1 No. 01/2009-10 dated 10.06.2009 to M/s Kaspian Kalay Giti, Tehran, Iran under General Bond No. 31/MC-Kol/2009-10 dated 22.04.2009. The buyer vide letter dated 04.10.2009 informed the appellant to take back all the containers as they were not able to clear the same from customs and take delivery. On return of the goods on Kolkata Port, goods were cleared on payment of countervailing duty (CVD) amounting to Rs. 4,28,424.00 only as allowed by the Customs authorities vide Bill of Entry No. 518266 dated 19.01.2010.Receipt of the goods in the appellant's factory was intimated to the Superintendent of Central Excise, Madhupur. Appellant filed a refund claim of CVD at Kolkata Port before the Jurisdictional assessing authority, stating that they are entitled to take credit of the CVD paid by them on return of the goods under Rule 16 of the Central Excise Rules, 2002 (=C.E.R, 2002' for short) as they did not claim any export benefit and goods were also cleared under Rule19 of C.E.R, 2002 on execution of bond and without payment of duty. On re-importation of the goods, the appellant had paid CVD and hence, they were entitled for refund of the said amount of CVD. The Adjudicating Authority sanctioned the refund claim and directed the appellant to take credit of the refund amount in their Cenvat Credit vide Order-in-Original dated 29.09.2010. Department filed an appeal before the Commissioner (Appeals)and the appellant also filed its Cross-Objection. The Commissioner (Appeals) vide Order-in-Appeal No. 19/RAN/2012 dated 16.04.2012 set aside the order of the Assistant Commissioner and allowed the appeal of the Department and directed the appellant to pay back the refund amount with appropriate interest. The appellant filed an appeal before the learned CESTAT against the Order-in-Appeal dated 16.04.2012, stating that they have taken the goods back in their factory and taken the benefits of Rule 16 of Cenvat Credit Rules, 2002. So, they are entitled to avail the Cenvat Credit of the said amount. That Rule 3 of Cenvat Credit Rules, 2002 allowed to take Cenvat Credit on the countervailing duty. That the Commissioner (Appeals) erred in holding that the refund sanctioned by the Adjudicating Authority is not sustainable in law. That the findings of the learned Commissioner (Appeals) is based on incorrect appreciation of relevant facts and materials on record. The Commissioner (Appeals) has erred in not considering and disclosing any reason for denying the appellants' contention in the Cross-Objection. The applicant had deposited 25% of the duty amount, as per the order of the learned Appellate Tribunal on its stay application. It was pleaded that since CVD is equivalent to the Central Excise Duty charged only on the importation of the goods, payment of duty at the time of clearance would be amounting to double payment of central excise duty. It is also averred that Cenvat Credit of CVD is allowed under C.C.R, 2004. That the re-imported goods were cleared for home consumption after re-packaging on payment of duty which would be treated as inputs under Cenvat Credit Rules, 2004. Since refund of CVD can be made only under the provisions of Central Excise Act and Rules, therefore, the Adjudicating Authority sanctioned the refund.The appellant claims to have filed the following documents before the learned Tribunal (a) Appeal and the Stay Application of the appellant against the Order dated 16.04.2012 passed by the Ld. Commissioner (Appeals) of Central Excise and Service Tax, Ranchi (b)Order-in-Original dated 29.09.2010; (c) Order-in-Appeal 19/RAN/2012 dated 16.04.2012 (d)Memorandum of Cross-Objection of the appellant; (e) Stay Order of the Tribunal dated 10.09.2012 (f) Final Order of the Tribunal dated 29.05.2017 Learned Tribunal dismissed the appeal upon hearing the counsel for the parties and upon consideration of the appeal records, holding that the Commissioner (Appeals) rightly observed that the refund claimed under Section 11B is not maintainable.
(3.) Learned counsel for the appellant has before us inter-alia made the following submissions: i. That the learned Tribunal failed to appreciate the fact that the CVD is equivalent to the Central Excise Duty and therefore, appellant is eligible for taking credit of the CVD under Rule 16 of Central Excise Rules, 2002. ii. That the appellant is eligible for Cenvat Credit of the value equivalent to CVD amounting to Rs. 4,28,424/- under Rule 16 of C.E.R, 2002 as returned goods is to be treated as input under Cenvat Credit Rules, 2004 which can be utilized according to the said rules and if such Cenvat credit remains unutilized, it can be refunded to the manufacturer. iii. That by virtue of Rule 3(vii) of Cenvat Credit Rules, 2004, the Cenvat credit of CVD is allowed. A harmonious reading of the said provisions with Rule 16 of C.E.R, 2002 would show that there is no good reason why CVD paid by the appellant under section 3 of the Customs Tariff Act, 1975 should not be included in the term =duty' used in Rule 16 of C.E.R., 2002. Further, CBEC vide its Circular No. 83/2000 dated 18.10.2002 has clarified that wherever =duty' appears in Rule 16 of C.E.R., 2002, it is to be construed to having reference to Central Excise or the additional duty under section 3 of Customs Tariff Act, 1975. Appellant has relied upon the decision of the Delhi High Court in the case of Commissioner of Central Excise, Delhi-I versus Joint Secretary (Revisionary Authority) and another,2012 SCCOnLineDel 2517, para-26 and 27. in support of the proposition that CVD is equivalent to the excise duty and partakes the character of excise duty. He has further relied upon the case of Commissioner of C. Ex, Gurgaon versus Simplex PharmaPvt. Ltd.,2008 SCCOnLineP&H 2185 on the plea that the refund claim of countervailing duty is permissible under section 11B of the Central Excise Act, 1944. It has been held therein that the applicant is eligible for the benefit of Cenvat Credit on the CVD paid by him at the time of import of raw material and if he had availed the Cenvat credit, then he would have got the refund of the same under the provisions of Section 11B(2). It is submitted that the learned Tribunal failed to appreciate that if credit/refund is not allowed, the same would lead to double taxation on the said good, one as CVD under section 3 of the Customs Tariff Act, 1985 and other as Central Excise Duty paid at the time of home consumption of the said goods. Case of the Respondent ;