2011 (3) TMI 757 - AT - Central Excise

Refund - Rule 5 of Cenvat Credit Rules, 2004 - 100% EOU - Notification 34/2001-C.E., dated 21-6-01 - Scrutiny - To avoid multiplicity of the refund claim this provision was made, therefore, it is suggested that refund claim can be filed on quarterly basis in a calendar year i.e. not more than four times in a calendar year - if the assessee files a refund claim once in a year that will also avoid the multiplicity - Refund claim to be allowed. The refund claim has been denied on the ground that the clearance to 100% EOU does not qualify the provisions of Rule 5 of the CENVAT credit Rules, 2004 as these are not the exports - It is made clear that if it is established that the goods supplied by the appellants have been physically exported by the 100% EOU, the adjudicating authority shall allow the refund claim of the appellants - Appeal is allowed by way of remand

Summary

Issues Involved:
Appeal against denial of rebate claim under Rule 5 of Cenvat Credit Rules, 2004.

Detailed Analysis:

Issue 1: Refund claim denial based on periodic filing
The appellants filed a refund claim for unutilized CENVAT credit accumulated due to clearances to 100% EOU. The department denied the claim on the grounds that clearances to 100% EOU cannot be considered exports and the refund claims were not filed quarterly as per Notification 5/06. The advocate for the appellants cited a case where a similar refund claim was allowed and argued that the quarterly filing requirement does not mean claims must be filed quarterly. The Tribunal found that the intent of the legislature was to avoid multiple claims and not to mandate quarterly filings. Thus, the denial of the rebate claim on this ground was deemed unjustified.

Issue 2: Clearance to 100% EOU as exports
The department contended that clearances to 100% EOU do not qualify as exports, citing a case regarding clearances to SEZ. However, the Tribunal disagreed, emphasizing that the goods supplied to 100% EOU were physically exported by them. The Tribunal highlighted that the legislative intent is to promote goods exports, not tax exports. As the lower authorities did not verify if the goods were physically exported, the matter was remanded to the adjudicating authority for verification. If physical export is proven, the refund claim should be allowed. The impugned order was set aside, and the appeal was allowed for remand, with a directive for the adjudicating authority to decide within 45 days.

This comprehensive analysis of the judgment highlights the key arguments, legal interpretations, and the Tribunal's decision on the issues involved in the appeal against the denial of the rebate claim under the Cenvat Credit Rules, 2004.