2009 (12) TMI 759 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 5 of Cenvat Credit Rules, 2002 regarding refund of unutilized credit.
2. Applicability of previous tribunal and high court decisions in similar cases.
3. Conflict between the decisions of different high courts on the same issue.

Analysis:
1. The appeal involved a dispute regarding the refund of unutilized Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2002. The manufacturer had taken credit for both Basic Excise Duty (BED) and Additional Excise Duty (AED) on inputs used in manufacturing Made Ups falling under Chapter 63. However, due to export of the final products on payment of duty and restrictions on using AED credit, the manufacturer sought a refund of unutilized AED credit. The original authority denied the refund, but the Commissioner (Appeals) allowed it based on the Tribunal's decision in a similar case, emphasizing the eligibility for refund under Rule 5.

2. The Department, in its appeal, relied on a High Court decision from Bombay, arguing against the refund and seeking restoration of the original authority's order. However, the respondent supported the Commissioner's decision, citing the Tribunal's and High Court's decisions in other cases that upheld the refund claims under Rule 5. The Tribunal referred to the precedent set by the decisions in Indo Dane Textile Industries and Mittal International, where refunds were granted in similar export scenarios involving AED credit utilization.

3. The Tribunal distinguished the conflicting decisions by various High Courts, noting that the case at hand aligned with the principles established in previous tribunal decisions and the specific context of Cenvat credit refunds for products not subject to additional excise duty under the Textile & Textile Articles Act. The Tribunal rejected the Department's appeal, emphasizing the consistency with established legal interpretations and the dismissal of the Department's appeal by the Punjab & Haryana High Court in a related case. The judgment highlighted the importance of precedent and the specific application of rules in determining the eligibility for Cenvat credit refunds in export scenarios without AED implications.