Facts:
The appeal was filed against order passed by Commissioner (Appeals) who rejected the refund claim filed by the appellant.
The appellant had imported certain goods under Advance Authorization Scheme. As the Advance Authorization expired, the appellants were unable to fulfil their export obligation with respect to those licenses.
Points put forth:
Appellant have paid appropriate duty and interest on the quantity of inputs which were not used in the manufacture of finished products for exports. As the differential duty comprised a portion of IGST, the appellant had filed refund claim for the reason that there is no provision to avail credit of IGST which is paid through TR6 challan. The adjudicating authority rejected the refund claim on the ground that there is no excess payment and the liability paid arose on account of non-fulfilment of the conditions of the license.
The department explained that the appellant has not paid any excess duty. As he could not fulfil the export obligations of Advance Authorization license for which they have remitted the duty liability along with interest. Hence, this is not the IGST paid on inputs rather it is the duty paid and the refund for the same cannot be claimed.
According to the appellant, they have paid duty as per TR6 challan and could not avail the credit of IGST paid as part of the duty liability. In the present case, it has to be noted that the duty was paid as the export obligation as per the Advance Authorization license were not fulfilled. Also then, it becomes clear that the inputs have not been used in the manufacture of final products for export.
Judgement:
The Tribunal had occasion to consider a similar issue and held that the refund is not eligible. The Commissioner (Appeals) has followed the said decision. There are no reasons to take a different view from the decision of the Tribunal. The impugned order does not call for any interference. The appeal is dismissed.
Our Comment:
The availability of CENVAT paid on inputs despite failure to meet with the export obligation may not be true in this case because firstly, it was a conditional import and secondly such import was to be exclusively used as per FTP.
The import which would have normally suffered duty having escaped due to the Advance Licence, but such import being a conditional one which ultimately stood unsatisfied, naturally loses the privileges and the only way is to tax the import.
Admittedly, the inputs imported have gone into the manufacture of goods meant for export, but the export did not take place. At best, the appellant could have availed the CENVAT credit, but that would not give appellant any right to claim refund of such credit in cash.
