2011 (1) TMI 664 - AT - Central Excise

Refund - Notification No. 30/04-C.E., dated 9-7-2004 - Rule 5 of Cenvat Credit Rules, 2004 - whether the appellant was eligible for the cenvat credit when they have not taken registration and the cenvat credit taken by them for the period 1-11-2008 to October 2009 can be allowed - Cenvat credit was taken on the capital goods for the years 2003-04 and 2004-05 but taken in the year 2005-06 - in the case of clandestine removals, even if the duty is paid subsequently, cenvat credit on inputs used will be available to the assessee/manufacturer subject to the conditions that proper documents showing the payment of duty are available - in this case also the action of the appellants in taking credit on 9-10-2009 has to be upheld Since the appellant is availing full exemption and not even registered and the exempted goods were not exported under bond, refund has been denied - In fact, it is the appellants who have suffered the loss because of the delay in obtaining registration and not exporting the goods under bond, even though appellant had taken a decision to avail cenvat credit and indicated the same at the time of removal. It is strange to note that Central Excise Officers have certified the availment of cenvat credit even though the appellant was not registered and they had not made any verification whatsoever with regard to availment of cenvat credit - Appeal is allowed

Summary

Issues involved:
1. Eligibility of Cenvat credit without Central Excise registration
2. Permissibility of refund under Rule 5 of Cenvat Credit Rules, 2004

Issue 1: Eligibility of Cenvat credit without Central Excise registration:
The case involved the appellant commencing production of Texturised Polyester Filament Yarn without Central Excise registration. The appellant filed a refund claim for Cenvat Credit of inputs used in the manufacture of exported goods. The Assistant Commissioner rejected the claim, stating that refund under Rule 6 is only permissible if dutiable goods are exported under bond or LUT. The appellant argued that registration is not necessary for availing Cenvat credit, citing a Tribunal case allowing credit for unregistered manufacturers. The Tribunal upheld the appellant's action of taking credit subsequently. The issue was analyzed in light of judicial precedents supporting credit availability for unregistered manufacturers.

Issue 2: Permissibility of refund under Rule 5 of Cenvat Credit Rules, 2004:
The second ground for rejection was that refund under Rule 5 is only permissible if dutiable goods are exported under bond or LUT. The appellant's exemption status and lack of registration were cited as reasons for denial. However, judicial decisions from the Hon'ble High Courts of Himachal Pradesh and Bombay supported refund of input credit for exported exempted goods without bond execution. The Tribunal emphasized that procedural lapses should not disentitle the appellant from claiming refund. Verification showed the appellant cleared goods under Central Excise seal for export, intending to avail Cenvat credit. The Tribunal noted contributory mistakes by Central Excise officers and set aside the impugned order, remanding the matter for further verification and determination of eligible refund amount.

In conclusion, the Tribunal allowed the appeal, stating that the impugned order rejecting the claim cannot be sustained. The original adjudicating authority was directed to verify documentary evidence of Cenvat credit availability and export proof for determining the eligible refund amount.