2008 (3) TMI 577 - AT - Central Excise

Summary

Issues involved: Appeal against refund of accumulated credit for goods exported under bond, criteria for monthly refund, utilization of credit for home clearance, challenge by Revenue.

Refund of accumulated credit for goods exported under bond:
The appeals were filed by the revenue against the Commissioner (Appeals) order allowing the refund of accumulated credit earned by the respondent. The revenue contended that the refund on a monthly basis is allowable only when the average export clearance of dutiable goods in value terms is 70% or more than the goods manufactured in the preceding three months. The export clearance in this case was only 50%, and the revenue argued that cash refund could not have been allowed on a monthly basis.

Criteria for monthly refund:
The Tribunal noted that the lower authorities did not mention that the refund claims were being filed on a monthly basis. The dispute related to a quarterly refund application filed by the respondent. The revenue's challenge was based on the export clearance not meeting the 70% threshold. However, since the credit of which the refund was sought related to the inputs used in the manufacture of export products, the refund claim could not be denied.

Utilization of credit for home clearance:
The revenue failed to establish that the accumulated credit could have been utilized by the respondents for home clearance, as duty on home clearance was paid out of PLA instead of Cenvat credit. Since it was not the revenue's case that the credit did not relate to the inputs used in the manufacture of export products, the Tribunal found no merit in the revenue's appeal and rejected it.