2011 (4) TMI 898 - AT - Central Excise

Refund of Cenvat credit - Notification No. 05/2006 - Held that - There is no restriction in the notification that claim for such refund has to be made every quarter. Further, if the purpose was to refer to the quarter or month during which claim was filed there was no need to use the expression given period to which the claim relates. There is no clear provision in law defining what is the the given period to which the claim relates in the facts and circumstances of the case. Considering this position it is ordered that the period starting from one year prior to 1998 till 9.7.2004, the date of abolition of ADE(T&TA) may be taken as the period in respect of amount of Rs.1,80,853/-. This is because the general principle for applying for refund is to submit application within one year from relevant date. The credit in question available in 1998 could have related to exports one year prior to that date. By the same logic, in the case of Rs. Rs.80,567/- it is reasonable to take the period as one year preceding 9.7.2004, the date of abolition of AED (T &TA) - matter remitted to the adjudicating authority to verify the records produce to satisfy assessee s eligiblity for the refund under Rule 5 of the Cenvat Credit Rules read with Notification 05/2006-CE (NT) - in favour of assessee by way of remand.

Issues Involved:
1. Eligibility for cash refund of Cenvat credit after abolition of ADE (T&TA).
2. Procedural compliance regarding the filing of refund claims.
3. Determination of the period to which the refund claim relates.
4. The validity of the grounds for rejection of the refund claim by the Commissioner (Appeals).

Detailed Analysis:

1. Eligibility for Cash Refund of Cenvat Credit After Abolition of ADE (T&TA):
The Appellant filed a refund claim on 17.11.08 for cash refund of Cenvat credit under the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (ADE (T&TA)), which was abolished effective 9.7.04. The claim was based on the inability to utilize the credited amount for domestic duty payments post-abolition. The Assistant Commissioner verified and sanctioned the refund under Rule 5 of the Cenvat Credit Rules, 2002, considering the unutilized credit as eligible for cash refund.

2. Procedural Compliance Regarding the Filing of Refund Claims:
The Department's appeal raised objections regarding the non-filing of the refund claim in the prescribed application form as per Notification No. 05/2006 (NT). However, the Appellant contended that the application was accepted without objection, and any procedural lapse should be treated as a minor error. The Commissioner (Appeals) did not address this procedural issue directly but instead rejected the refund on a different ground related to the finality of the order-in-original.

3. Determination of the Period to Which the Refund Claim Relates:
The core dispute revolved around the interpretation of the "given period" for which the refund claim relates, as stipulated in Notification 05/2006-CE (NT). The Tribunal noted that there was no clear provision defining the "given period" in the context of this case. The Tribunal decided that the period from one year prior to 1998 until the abolition of ADE (T&TA) on 9.7.2004 should be considered for the refund claim of Rs.1,80,853/-. For the remaining Rs.80,567/-, the period was taken as one year preceding 9.7.2004.

4. Validity of the Grounds for Rejection of the Refund Claim by the Commissioner (Appeals):
The Commissioner (Appeals) rejected the refund claim on the ground that the order-in-original granting refund by credit into Cenvat account was not challenged and had reached finality. The Tribunal disagreed with this reasoning, emphasizing that the Appellant was not given an opportunity to rebut this point and that the conditions for claiming refund of Cenvat credit due to export were not examined in the initial adjudication. The Tribunal also recognized the CBEC's clarification allowing cash refund of accumulated credit under Rule 5 of the Cenvat Credit Rules, 2004.

Conclusion:
The Tribunal remitted the matter to the adjudicating authority to verify the Appellant's records and ensure compliance with the conditions under Rule 5 of the Cenvat Credit Rules and Notification 05/2006-CE (NT). The adjudicating authority was directed to consider the period from one year prior to 1998 until 9.7.2004 for the refund claim of Rs.1,80,853/- and one year preceding 9.7.2004 for Rs.80,567/-. The Tribunal emphasized that the objective of the indirect taxation system is to avoid exporting taxes levied in India.

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