IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN THURSDAY, THE 25TH AUGUST 2011 / 3RD BHADRA 1933 C.E.Appeal.No. 21 of 2004() --------------------------- AGAINST THE ORDER NO. 1240/03 DATED 15/09/2003 IN APPEAL NO.E/14/2000 of CUSTOMS,EXCISE&SERVICE TAX APP.TRIBUNAL,BANGALORE .................... APPELLANT/RESPONDENT: ----------------------------- THE COMMISSIONER OF CENTRAL EXCISE, COCHIN. BY ADV. SRI.THOMAS MATHEW NELLIMOOTTIL,SC,CB EX RESPONDENT/APPELLANT: --------------- M/S.BINANI ZINC LTD., EDAYAR BINANIPURAM-683 502. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SMT.PRIYA MAHESH SMT.PRIYA MANJOORAN THIS CENTRAL EXICISE APPEAL HAVING BEEN FINALLY HEARD ON 25/08/2011, ALONG WITH CEA NO.22/2004 & CONN. CASES, THE COURT ON 25/08/2011 DELIVERED THE FOLLOWING: APPENDIX (CEA NO.21/2004) ANNEXURE A1: TRUE COPY OF CIRCULAT NO.591/28/2001 CX DT.16.10.2001 DT.16.10.2001 ISSUED BY THE CENTRAL BOARD OF EXCISE & CUSTOMS. ANNEXURE A2: TRUE COPY OF ORDER IN ORIGINAL NO.54./98 DT.29.9.98 ISSUED BY THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE, ERNAKULAM DIVISION. ANNEXURE A3: TRUE COPY OF ORDER IN APPL. NO.103/2000 TO 106/2000 CE DT.24.8.2000 PASSED BY THE COMMISSIONER OF CENTRAL EXICSE (APPEALS), COCHIN. ANNEXURE A4: TRUE COPY OF ORDER NO.1240 TO 1243/03 IN APPEAL E.NO.14, 34,37&36/2000 DT.15.9.03 PASSED BY THE CUSTOMS, EXICSE & SERVICE TAX APPELLATE TRIBUNAL, CIRCUIT BENCH AT COCHIN. TRUE COPY P.S. TO JUDGE C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... C.E. Appeal Nos.21,22,23 & 24 of 2004, 27,28,29 &30 of 2005 .................................................................... Dated this the 25th day of August, 2011. JUDGMENT Ramachandran Nair, J. The connected 8 appeals, 4 of which filed by the department and 4 by the assessee, pertain to the entitlement of duty credit of the assessee for inputs imported from outside India and purchased locally in the manufacture of products partly exported without payment of duty, partly cleared locally without payment of duty and partly cleared on payment of duty. Rule 57CC provide for reversal of 8% of the value of exempted goods. Controversy arose with regard to the reversal required to be made in regard to Zinc exported as well as Sulphuric Acid which is a by-product sold locally to fertilizer units without payment of duty. So far as input tax credit on the catalyst namely, Vanadium Pentoxide purchased is concerned, the Tribunal held that the assessee need not reverse value of 8% of the Sulphuric Acid sold without payment of duty on condition that entire MODVAT CEA 21/2004 & conn. 2 credit availed on the catalyst is reversed. It is against these orders the department has filed appeals. So far as assessee's appeals are concerned which is for other period, the question that arose is whether assessee is liable to reverse 8% of the value of Sulphuric Acid together with 8% value of the Zinc exported without payment of duty on the ground that MODVAT credit availed on duty paid on Zinc ore imported will require such reversals. Since the Tribunal upheld the department's stand, assessee is in appeal against these orders of the Tribunal. 2. During hearing both sides brought to our notice the provisions of Finance Act, 2010 which is introduced with retrospective effect from 1996 to 2008 whereunder new Rule 57CCC is introduced which provides that reversal of the entire duty credit will be sufficient and payment of the same with interest at 25% is sufficient instead of reversing 8% of the value of exempted goods. Counsel for the assessee specifically informed the court that amended Rule applies from 1.9.1996 to 31.3.2008 (IVth Schedule to VIIIth Schedule of Finance Act, 2010). Standing Counsel Sri.Thomas Nellimoottil submitted that benefit of the Finance Act, 2010 could be availed by the assessee strictly in accordance with the procedure prescribed. CEA 21/2004 & conn. 3 3. After hearing both sides we do not think there is any need for us to decide the case on merits because assessee can avail the benefit of Finance Act, 2010 by approaching the Commissioner through application with supporting documents and audited statement of accounts. The Central Excise Commissioner or the statutory authority concerned should verify the reversals of MODVAT credit and payments made by the assessee and pass appropriate orders based on the amendments introduced by the Finance Act, 2010. If there is any surviving grievance, assessee is free to challenge the same in appropriate forum. The adjudicating authority is directed to pass orders within three months from production of copy of this judgment along with applications, documents and statements from Chartered Accountant or Cost Accountant in terms of the Rules. The C.E. Appeals are disposed of as above. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms