2015 (8) TMI 1411 - AT - Central Excise

Refund of unutilized CENVAT credit - deemed export - whether the appellant is eligible for refund u/r 5 of CCR, 2004 read with N/N. 11/2002-CE on account of unutilized credit lying in balance for clearance of excisable goods to 100% EOU (deemed export) in Form AR-3A? - Held that - Appendix to N/N. 11/2002 wherein clause (4) provides that manufacturer (appellant) is required to submit refund application along with Bill of Lading or shipping bill or export proof duly certified by any office of Customs, to the effect that the goods have in fact been exported. There is no ambiguity in the requirement as the documents referred to under clause (4) are only available in case of actual export and not deemed export. The appellant herein have admittedly failed to furnish the evidence of actual export in spite of opportunity in the second round of litigation. Thus, the rejection of claim by the learned Commissioner (Appeals) is correct and in accordance with law - refund not allowed - appeal dismissed - decided against appellant.

Summary

Issues:
1. Eligibility for refund under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.11/2002-CE for unutilized credit.

Analysis:
The appellant appealed against the rejection of a refund claim under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.11/2002-CE concerning unutilized credit for the clearance of excisable goods to a 100% EOU (deemed export) in Form AR-3A. The appellant, a fabric manufacturer, had cleared fabrics for export under Bond during a specific period and availed duty credit amounting to Rs. 81,875. The dispute arose from the failure to provide evidence of actual export, leading to the rejection of the refund claim by the Commissioner of Central Excise (Appeals), Mumbai-I. This case involved a second round of litigation due to discrepancies in proving the export of goods to the 100% EOU (M/s Haria Export Ltd.). The Tribunal had previously remanded the matter for verification of actual exports, which was not satisfactorily done, resulting in the rejection of the refund claim.

The Commissioner (Appeals) concluded that for CENVAT Credit refund eligibility, actual export of finished goods is imperative. The appellant's clearance of goods to EOU did not constitute actual export without proof of export. The definition of export under the Central Excise Act and relevant circulars was considered, emphasizing that clearance to EOU, though deemed export, does not equate to actual export for all purposes. Legal precedents were cited to support the distinction between clearance to EOU and actual exports, reinforcing the necessity of evidencing export for refund claims under Rule 5 of the Cenvat Credit Rules.

The appellant contended that the adjudicating authority exceeded the remand's scope by delving into the export versus deemed export issue instead of verifying actual exports from the 100% EOU. Reference was made to legal precedents where clearance to EOU was treated as export for refund purposes. However, the Tribunal upheld the rejection of the claim, emphasizing the requirement of evidence of actual export as specified in Appendix to Notification No.11/2002. The failure to provide such evidence led to the dismissal of the appeal, affirming the correctness of the Commissioner (Appeals)' decision.

The Tribunal's decision was based on the clear requirement in the notification for evidence of actual export, which the appellant failed to provide despite opportunities during the proceedings. The rejection of the claim was deemed appropriate and lawful. The appellant was directed to comply with the refund repayment and report to the Commissioner of Central Excise within a specified timeframe. The ruling highlighted the significance of fulfilling documentary evidence requirements for refund claims under the Cenvat Credit Rules, ultimately resulting in the dismissal of the appeal.