2011 (4) TMI 421 - AT - Central Excise

Refund - Rule 5 of Cenvat Credit Rules, 2004 - Notification No.5/2006-CE(NT) dated 14.03.06 - Held that the average export clearance of the final products (or the output services) during the given period is less than 50% of the total clearance of the final products - the appellants knew that no more than one application can be filed per quarter - appellants have not disputed the fact that the said condition No.2(a) of the said notification has specifically stipulated the frequency and the appellants have themselves interpreted the said condition as referring to frequency; however, the two refund claims as above filed for the same quarter Jan 07 to Mar 07 are in violation of the condition 2(a) of the Appendix to the Notification No.5/2006-CE(NT) dated 14.03.06 - Decided against the assessee

Summary

Issues:
1. Refund claim rejection based on violation of conditions under Notification No.5/2006-CE(NT).
2. Applicability of condition 2(a) of the Appendix to the Notification.
3. Interpretation of the frequency of filing refund applications per quarter.
4. Admissibility of the refund claim under Rule 5 of Cenvat Credit Rules, 2004.

Analysis:
1. The appellant, a stationery exporter, filed a refund claim amounting to Rs.69,024/- for the quarter January 2007 to March 2007. The claim was rejected on the grounds of violating the conditions of 2A of the Notification No.5/2006-CE(NT). The Commissioner (Appeals) upheld the rejection stating that filing two applications for the same quarter is not permissible under the said condition. The appellants argued that the rejection was beyond the scope of the show cause notice, but the Commissioner's decision was based on the violation of the condition.

2. The Commissioner noted that the appellants had indeed filed two applications for the same quarter, which was in violation of the condition 2(a) of the Notification. The appellants' consultant claimed that the applications were for different quarters, but the Commissioner found this claim to be incorrect. The Commissioner emphasized that the condition clearly stipulated the frequency of filing refund claims, and filing two applications for the same quarter constituted a violation. Therefore, the rejection of the refund claim amounting to Rs.69,024/- was deemed appropriate under the said condition.

3. The Commissioner's decision was supported by the fact that the average export clearance of the final products during the period was less than 50% of the total clearance. The appellants did not dispute this fact. The Commissioner found the appellants' plea for the admissibility of the refund claim to be weak and lacking in merit. Consequently, the appeal filed by the appellants was dismissed based on the Commissioner's findings and interpretation of the conditions under the Notification.

4. In conclusion, the Tribunal concurred with the Commissioner's decision to reject the refund claim based on the violation of the conditions specified under Notification No.5/2006-CE(NT). The Tribunal found the appellants' arguments regarding the filing of two applications for the same quarter to be unsubstantiated. The dismissal of the appeal was justified as the plea for the admissibility of the refund claim was deemed feeble and lacking in merit by the Commissioner.