2011 (11) TMI 803 - AT - Central Excise

Summary

Issues involved: Refund claims under Rule 5 of CENVAT Credit Rules, 2004 rejected on grounds of exemption of finished product from duty, limitation, and utilization of CENVAT Credit for duty payment on domestic clearances.

Refund Claim 1 - &8377; 1,73,322/-:
The appellant, a 100% EOU manufacturing Peanut Butter, sought refund of duty paid at de-bonding, contending inability to utilize CENVAT Credit due to product's total duty exemption. Tribunal noted duty paid pre-DTA status, allowing refund u/s Rule 5 as credit remained unutilized post-DTA conversion. Citing Hindustan Motors Ltd. case, Tribunal held refund admissible from date credit became unusable.

Refund Claim 2 - &8377; 30,652/-:
Appellant's claim for unutilized CENVAT Credit for exports ending September 2008 was rejected on limitation grounds. Commissioner observed non-disputed limitation breach, yet Tribunal found export date post-claim justified, aligning with Hindustan Motors Ltd. precedent on credit utilization timing for refund eligibility.

Refund Claim 3 - &8377; 3,20,498/-:
Another claim for unutilized CENVAT Credit from October to December 2008 was rejected due to appellant's substantial domestic clearances, implying credit utilization. However, Tribunal noted appellant's sole use of credit for duty payments, indicating surplus credit accumulation post-clearances, justifying refund eligibility.

Conclusion:
Tribunal allowed all refund claims, emphasizing duty exemption post-DTA conversion, credit utilization timing, and bond export compliance as key factors in determining refund eligibility. The unique circumstances of the case warranted a favorable decision for the appellant, aligning with legal precedents and statutory provisions.