2010 (11) TMI 657 - Commissioner - Central Excise

Refund Claim - Under Rule 5 of the Cenvat Credit Rules, 2004 read with Section 11-B of the Central Excise Act, 1944 - The refund was denied to the appellant by lower authority on the ground that the duty paying documents do not mention the Plot No. B-24 & 25, but merely mention - M/s. Benzo Chem Industries P. Ltd. Unit-II Dasarkhed, Malkapur, Distt. Buldana - Find that the goods in captioned invoice are reportedly received and used by the Appellant s unit at plot No B-24 & 24 - Thus mere non-mentioning of Plot No B-24 & 25 has been taken as the basis for disallowance of Cenvat Credit and further denial of the refund claim - The Appellant has produced the copies of input excise invoices, extracts of Inward gate register, GRR & Issue slips for satisfying the conditions of actual use of captioned inputs in manufacture and export of finished goods from their factory - The appellant also submitted a declaration from the unit located at Plot No. B-26 & 27 to the extent of non-availment of credit for the said invoice - Thus, the rejection of the refund claim to the extent of ₹ 67238 by the lower authority is thus liable to be set aside - Decided in favour of assessee.

Summary

Issues Involved:
1. Rejection of refund claim without issuing a show cause notice.
2. Denial of refund claim based on proportionate Cenvat credit calculation.
3. Denial of refund claim due to procedural lapses in the input excise invoices.

Detailed Analysis:

1. Rejection of Refund Claim Without Issuing a Show Cause Notice:
The appellants contended that the impugned order was not sustainable as no show cause notice was issued, and no personal hearing was granted before rejecting a portion of their refund claim. This contention was found valid as the lower authority rejected part of the refund claim without observing the principles of natural justice. Thus, the order was liable to be set aside on this ground alone.

2. Denial of Refund Claim Based on Proportionate Cenvat Credit Calculation:
The appellants argued that Rule 5 of the Cenvat Credit Rules, 2004, and Notification No. 5/2006-C.E. (N.T.) dated 14-3-2006, do not prescribe calculating the proportionate Cenvat credit on inputs used in making exported final goods. The lower authority had incorrectly applied this non-existent condition by considering the lowest rate for determining the assessable value of inputs used in exported goods. The appellant's claim was based on actual use of inputs, supported by stock registers and verified by the jurisdictional Superintendent of Central Excise. Therefore, the rejection of Rs. 103240 was found unsustainable.

3. Denial of Refund Claim Due to Procedural Lapses in the Input Excise Invoices:
The lower authority denied the refund of Rs. 67238 on the grounds that the input excise invoices did not mention the specific plot numbers of the factory address. The appellants provided evidence, including input excise invoices, gate registers, and issue slips, to show actual use of inputs in the manufacture and export of finished goods. The jurisdictional Range Superintendent confirmed that no Cenvat credit was availed by the unit at the disputed address. The denial of the refund claim based on minor procedural lapses was found untenable, and the appellants were entitled to the refund.

Conclusion:
The appeal was allowed with consequential relief. The impugned order was set aside to the extent of the rejection of the refund claim amounting to Rs. 103240 and Rs. 67238.