2010 (9) TMI 1225 - AT - Central Excise

Summary

Issues involved: Appeal against denial of refund claim for unutilised CENVAT credit balance attributable to inputs used in the manufacture of goods cleared for export.

Comprehensive Details:

1. Issue of denial of refund claim: The appellants, job workers for an exporter, opted for exemption under Notification No. 30/2004-CE in 2006, clearing goods without duty payment. The lower authorities rejected their refund claim, citing Rule 11(1) and (2) leading to lapse of unutilised credit balance in the CENVAT Account. Appellants contended that Rule 11(3) applies, effective from 01.03.2007, and relied on precedents like H.M.T. vs. Commissioner of Central Excise and Union of India vs. Slovak India Trading Co. The Advocate argued that the appellants are entitled to claim the refund under the 1st proviso to Section 11B(2)(c) of the Central Excise Act, 1944.

2. Contention of the Revenue: The Revenue argued that the refund claim is non-maintainable under Rule 5 of CENVAT Credit Rules, 2004, citing cases like CCE vs. Nisma Aircon International Ltd. and Hotline Teletubes & Components Ltd.

3. Judgment: After considering both sides, it was observed that the appellants correctly availed CENVAT credit before their goods became exempted. The Tribunal found that the cases cited by the Revenue were not applicable as they dealt with different scenarios. Relying on precedents like Shree Prakash Textiles (Guj.) Ltd., the Tribunal held that the appellants are entitled to claim the refund of unutilised credit in their CENVAT account. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief.