2009 (12) TMI 746 - AT - Central Excise

Summary

Issues:
1. Denial of Cenvat credit amounting to Rs. 1,42,365 in respect of export consignments due to wrong declaration on ARE-1 forms.
2. Adjudication by Asstt. Commissioner confirming Cenvat credit demand, imposing interest, and penalty under Rule 13 of Cenvat Credit Rules, 2002.
3. Dismissal of appeal by Commissioner (Appeals) categorizing the wrong declaration as misdeclaration and invoking the extended period for recovery of Cenvat credit.
4. Interpretation of Rule 6(5)(vi) of Cenvat Credit Rules, 2002 regarding availability of Cenvat credit for goods cleared for export under bond.
5. Application of Rule 5 of Cenvat Credit Rules, 2002 for refund of accumulated Cenvat credit due to export without drawback claim or input duty rebate.

Analysis:
The case involved the appellant, a manufacturer of extended Aluminium Collabsable Tubes, who exported extruded aluminium printed tubes under a bond under Rule 19 of Central Excise Rules 2002 through a merchant-exporter under DEPB Scheme. The issue arose when the appellant availed input duty Cenvat credit but declared on ARE-1 forms that no Cenvat credit had been availed, leading to a show cause notice for denying Cenvat credit amounting to Rs. 1,42,365 for five export consignments. The Asstt. Commissioner confirmed the Cenvat credit demand, imposed interest, and penalty under Rule 13 of Cenvat Credit Rules, 2002. The Commissioner (Appeals) dismissed the appeal, considering the wrong declaration as a misdeclaration warranting the recovery of Cenvat credit within the extended period.

During the hearing, the appellant's counsel argued that Rule 6(5)(vi) of Cenvat Credit Rules, 2002 exempts goods cleared for export under bond from certain provisions, making Cenvat credit available even for duty-free exports. Referring to Rule 5 of the Cenvat Credit Rules, 2002, the counsel contended that refund of accumulated Cenvat credit is permissible for exports not under drawback claim or input duty rebate, which was the case for the appellant. Citing relevant Tribunal judgments, the counsel emphasized that denial of Cenvat credit was unwarranted in this scenario.

The respondent's representative defended the impugned order, supporting the findings of the Commissioner (Appeals). Upon careful consideration, the judge observed that despite the wrong declaration on ARE-1 forms, the goods were exported under bond without duty payment, and no input duty rebate or drawback claim was made. Relying on Rule 6(5)(vi) and Rule 5 of the Cenvat Credit Rules, 2002, the judge concluded that Cenvat credit could not be denied to the appellant as the conditions for refund were met. Referring to precedent cases, the judge highlighted that denial of accumulated Cenvat credit refund was only applicable when exports were under drawback claim or input duty rebate, which did not apply in the appellant's case. Consequently, the impugned order was set aside, and the appeal was allowed.