2011 (6) TMI 348 - AT - Central Excise

Refund claim denied - as per dept there was no NCCD leviable on the final product with effect from 17.5.2003 thus refund of said duty paid on raw material cannot be extended to the assessee - Held that - As in terms of Rule 5 of Cenvat Credit Rules, 2004, there are two stipulations i.e. eligibility to take credit under cenvat credit rules and inability on the part of the appellant for use the credit for any reason - further observed that inasmuch the word any reason is wide enough and the meaning cannot be restricted to reduce the scope of the term, the appellants are eligible for refund of NCCD - See Silvasa Industries Pvt. Limited vs. CCE, Vapi 2005 (12) TMI 136 - CESTAT, MUMBAI . Decided in favour of assessee.

Summary

Issues:
1. Denial of refund of NCCD paid on raw material for manufacturing polyester textured yarn under bond.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Ahmedabad involved a dispute regarding the denial of refund of National Calamity Contingent Duty (NCCD) paid on raw material, i.e., partially oriented yarn, used in the manufacture of polyester textured yarn under bond. The original adjudicating authority denied the refund on the grounds that no NCCD was leviable on the final product from a certain date. However, the Commissioner (Appeal) set aside this decision, emphasizing the eligibility of the appellant for refund under Rule 5 of Cenvat Credit Rules, 2004. The Commissioner interpreted the rule to allow refunds for any reason preventing the use of credit, leading to the allowance of the appeal.

The Tribunal noted that the issue was settled in a previous case involving the same appellant, referencing the decision in Silvasa Industries Pvt. Limited vs. CCE, Vapi 2006. The Tribunal's decision in the appellant's subsequent case further supported the eligibility of the appellant for the refund of NCCD on inputs. Citing these precedents, the Tribunal rejected the appeal filed by the Revenue, providing consequential relief to the assessee.

In conclusion, the judgment reaffirmed the appellant's entitlement to a refund of NCCD paid on raw material for manufacturing polyester textured yarn under bond, based on the interpretation of Rule 5 of Cenvat Credit Rules, 2004 and established precedents in the appellant's favor. The decision highlighted the broad scope of eligibility for refunds under the rules, leading to the rejection of the Revenue's appeal and the grant of relief to the assessee.