2016 (5) TMI 1314 - AT - Central Excise

100% EOU - Refund claim - the appellants have filed a B-17 bond and not B-1 bond/letter of undertaking - rejection on the ground that the appellants have not followed the following conditions prescribed in the N/N. 05/2006-C.E. (N.T.) dated 14-3-2006 - Held that - B-17 bond is a multi purpose bond which covered not only the Customs requirements but also Central Excise requirements. Circular No. 76/99 dated 17-11-1999 has been issued to extend a facility to 100% EOU. The body of the B-17 bond includes the conditions required to safe guard the Central Excise duty. Matter remanded to the original adjudicating authority to decide the issue afresh only with respect to the allegations regarding non-submissions of documents and unjust enrichment - appeal pertly allowed by way of remand.

Summary

Issues:
Refund claim under Rule 5 of the Cenvat Credit Rules, 2004 for an EOU exporting goods under bond; Allegations of not following prescribed conditions in Notification No. 5/2006-C.E. (N.T.); Non-submission of necessary original documents with the claim; Allegation of refund leading to unjust enrichment.

Analysis:
The appellants, an EOU, filed a refund claim under Rule 5 of the Cenvat Credit Rules, 2004, for exporting goods under bond. A show-cause notice was issued alleging non-compliance with conditions in Notification No. 5/2006-C.E. (N.T.), specifically regarding export procedures under Central Excise Rules, 2002. The notice also raised concerns about the non-submission of necessary original documents and the possibility of unjust enrichment due to the refund claim.

The original adjudicating authority rejected the refund claim, emphasizing the failure to export under a B-1 bond/letter of undertaking as required by Notification No. 42/2001-C.E. (N.T.). The authority did not address the other two grounds raised in the show-cause notice, despite the appellants producing original documents during the hearing. Dissatisfied with the rejection, the appellants appealed to the Tribunal.

The appellants argued that the B-17 bond, under which they exported, encompasses Central Excise Rules' conditions, citing Circular No. 76/99-Cus., dated 17-11-1999, which extends this facility to 100% EOUs. They contended that the provisions of unjust enrichment do not apply to refunds under Rule 5 of the Cenvat Credit Rules, citing relevant tribunal decisions.

Upon review, the Tribunal found that the rejection was primarily based on the appellants not following conditions in Notification No. 05/2006-C.E. (N.T.). However, it noted that the B-17 bond covers both Customs and Central Excise requirements, as highlighted by the appellants. The Tribunal set aside the impugned order, remanding the matter to the original adjudicating authority to reassess the non-submission of documents and unjust enrichment allegations, as these issues were not examined previously. The appeal was partly allowed through remand.