Imperial Granites (P) Ltd vs Commissioner of Central Excise, Guntur

Ramesh Ranganathan, J.—This appeal u/s 35G of the Central Excise Act, 1944 (the Act), is against the order of the Customs, Excise, Service Tax Appellate Tribunal (CESTAT), Bangalore, in Appeal No. E/104/08, dated 23-4-2010 [2010 (256) E.L.T. 610 (Tri. - Bang.)], whereby the appeal preferred by the appellant-assessee was dismissed. The appellant, a 100% Export Oriented Unit (EOU), submitted a refund claim of Rs. 89,164/- being duty paid on High Speed Diesel (HSD) oil used by them. The Assistant Commissioner, Tirupati Division, granted refund of Rs. 71,298/- and disallowed refund of Rs. 17,866/-. Aggrieved by the order allowing refund of Rs. 71,298/- the Revenue filed an appeal before the Commissioner (Appeals) who set aside the Order-in-Original granting refund. Aggrieved thereby the appellant herein carried the matter in appeal to the CESTAT.

In the order under challenge before us, the CESTAT examined the question as to whether the appellant was eligible for refund of the amount paid on HSD oil. The CESTAT noted that, under Explanation 1 to Rule 2(k) of the Cenvat Credit Rules, 2004 (the Rules), HSD oil was not to be treated as an input for any purpose whatsoever. Since the period in question was from 1-11-2004 to 21-10-2005 the CESTAT held that the appellant was neither entitled to credit nor for refund. The appeal preferred by the appellant-assessee was rejected.

Sri Raghavan Rambhadran, learned Counsel for the appellant, would submit that, while the appellant may not be entitled to claim credit under Rule 2(k) of the Rules, they were nonetheless entitled for refund u/s 11B of the Act. According to the learned Counsel EOUs were entitled to claim refund on the excise duty of HSD oil purchased by them in terms of Circular dated 23-9-2004. On being asked as to how this question, which was not raised before the Tribunal, could be raised for the first time before us, learned Counsel would rely on Section 35G(6) of the Act. We must express our inability to agree with the construction placed on the said provision by the learned Counsel. u/s 35G(6) of the Act the power of the High Court is to determine an "issue" which had either not been determined by the CESTAT or has been wrongly determined by the CESTAT by reason of a decision on the question of law referred to u/s 35G(1) of the Act. We have perused the grounds of appeal and we find that the contention now urged before us was not even raised before the CESTAT. u/s 35G(6) of the Act it is only on a question being raised before the CESTAT and, thereafter, if the CESTAT does not determine the said issue or wrongly determines the said issue by reason of a decision of such question of law as referred to u/s 35G(1) of the Act, would an appeal lie to the High Court. Ordinarily, the power u/s 35G of the Act ought not to be exercised where such a question has not even been raised before the CESTAT. We see no reason, therefore, to interfere with the order of the CESTAT. The Central Excise Appeal is, therefore, dismissed. No costs.