Judgment:
1. The appellant filed this appeal against rejection of the refund claim of Rs.12,64,800/- under Section 11B of the Central Excise Act, 1944.
2. The learned counsel on behalf of the appellant submits that the appellants were engaged in the manufacture of Static Converter known as Uninterrupted Power Supply System (UPSS) classifiable under sub-heading 85044090 of the CETA, 1985. They availed CENVAT credit paid on the inputs. He submits that apart from that, they imported 1000 nos. of UPSS (1000 VA/800W C/W to M/s. HCL Infosystems Ltd.) under Bill of Entry No. 724445 dated 7.12.2004 and availed CENVAT credit of Rs.9,10,701/- being the additional duty of customs. He further submits that they supplied the same item under the cover of invoice dated 29.12.2004 and 30.12.2004 under the description of 1000 nos. of UPSS (Numeric Digital 1.0 KVA Line Interactive UPS) to M/s. HCL Infosystems Ltd. Pondicherry under Invoice No. 2346 dated 29.12.2004 and 2349 dated 30.12.2004 on payment of duty. He submits that in the month of December 2005 the Range Superintendent advised them to reverse the credit on the imported goods, as it was cleared as trading item. Accordingly, they reversed the credit in December 2005 and filed a refund claim on 28.12.2005. He submits that both the authorities below rejected the refund claim merely on technical ground. It is revealed from the document that the goods are not manufactured by them which is mere a trading item and refund cannot be denied. He further submits that if it is manufactured goods, they are eligible for refund of duty under Notification No. 108/95-CE dated 28.8.95 as amended and Notification No. 6/2002 dated 1.3.2002 (Sl. No. 301) as amended. He also drew the attention of the Bench the Project Authority Certificate dated 1.11.2004 in support of their claim for exemption notification. He further submits that it is clearly evident from the invoice that the excise duty was not claimed from the customer. He relied upon the decision of the Tribunal in the case of Sonic Band International Vs. CCE, Vadodara 1999 (109) ELT 524.
3. On the other hand, the learned AR on behalf of Revenue reiterates the findings of the Commissioner (Appeals). She submits that the goods were cleared under Advance Release Order (ARO) issued by Jt. DGFT. She submits that the ARO would show that the appellant supplied indigenously produced goods. It is contended that the goods are not trading goods and therefore both the authorities rightly rejected the refund claim. She further submits that the appellant had not claimed exemption benefit before the lower authorities.
4. After hearing both sides and on perusal of the records, I find that the appellant claimed that the goods in dispute were imported by them. But the authorities below have observed that the impugned goods were indigenous goods manufactured by them from their premises and cleared under ARO. On perusal of the ARO, it is seen that the appellant was directed to supply indigenously produced goods against advance licence. So the contention of the learned counsel that the impugned goods are trading goods cannot be accepted. However, it is seen that the adjudicating authority observed that the goods supplied are not entitled for any exemption and hence payment of duty on the said clearance was correct in law. It is also observed that the concept of supply against AROs is not germane to excise. Supplies made against the ARO is considered as deemed export in para 8 of EXIM Policy 2004 09 and the DGFT has to be approached for any relief on that account. The learned counsel fairly submits that they have produced the Project Import Certificate which was not properly dealt by the adjudicating authority. In my considered view, if the Department is treating the impugned goods as manufactured goods, the claim of exemption should be examined by the lower authority in the light of the exemption notifications.
5. The Tribunal in the case of Sonic Band International (supra) held that benefit of exemption notification should be extended if eligible irrespective of the stage at which the claim is made. Since both the authorities have held that the impugned goods are manufactured goods, it is appropriate that the matter should be remanded to the adjudicating authority to examine the eligibility of exemption notifications. Accordingly, the matter is remanded to the adjudicating authority to examine the eligibility of the refund claim in view of the exemption notifications including the unjust enrichment, if any. Needless to say that the appellant shall be given a reasonable opportunity of hearing before passing the order. The appeal is disposed of in the above terms.