2012 (9) TMI 638 - AT - Central Excise

Eligibility of availment of Cenvat credit during the period 01.11.2008 to 07.10.2009 when the appellant was un-registered and exported the final goods manufactured by them rejection of refund claim - Held that - Tribunal in the appellant s own case in respect of very same amount has clearly held that the appellant is eligible for refund of the amount of CENVAT Credit paid on the inputs which are consumed in the manufacture of finished goods which are exported on observation that appellants did have an intention to avail cenvat credit and it was only a clerical lapse due to which failure to obtain registration and make proper claims has arisen. Further also noted that refunds were made only after obtaining registration. Matter was sent back only for limited question of verifying the documents and also finalizing the quantum of refund due to the appellant in the said refund claim. Therefore impugned order dwelling on the eligibility of CENVAT Credit of the duty paid on the inputs is clearly beyond our order. In view of the foregoing order rejecting refund is unsustainable and liable to be set aside Decided in favor of assesse.

Summary

Issues:
1. Denial of CENVAT Credit on duty paid on inputs and imposition of penalty.
2. Rejection of refund claim under Rule 5 of CENVAT Credit Rules, 2004.
3. Dispute regarding eligibility for CENVAT Credit during a specific period.

Issue 1: Denial of CENVAT Credit and Penalty:
The Stay Petition challenged the duty demand, interest, and penalty imposed on the appellant. The appellant had availed credit of duty paid on inputs and filed a refund claim for CENVAT Credit on inputs used in manufacturing polyester yarn for export. The Assistant Commissioner rejected the refund claim, citing that it is only permissible when dutiable goods are exported under bond or letter of undertaking. The appellant's appeal against this rejection was also dismissed. Another Show Cause Notice was issued for reversal of CENVAT Credit, leading to the confirmation of the demand, interest, and penalty by the adjudicating authority.

Issue 2: Rejection of Refund Claim:
The rejection of the refund claim was based on the appellant not being registered with Central Excise, thus not exporting fully exempted goods under bond or letter of undertaking. The appellant's contentions, including reliance on previous Tribunal decisions, were not accepted by the authorities. The Tribunal had previously remanded the case for verification of documentary evidence and determination of the eligible refund amount.

Issue 3: Eligibility for CENVAT Credit:
The primary issue revolved around whether the appellant correctly availed CENVAT Credit during a specific period based on the refund claim filed by them. The Tribunal's previous order in the appellant's case supported the appellant's eligibility for the credit, even when unregistered, as long as proper documents showing payment of duty were available. Verification revealed that the appellant had intended to avail the credit but faced a clerical lapse due to delayed registration. Central Excise officers' oversight also contributed to the situation.

The Tribunal analyzed the submissions made by both parties and reviewed the records extensively. Referring to its previous order in the appellant's case, the Tribunal found that the denial of CENVAT Credit was incorrect. The Tribunal emphasized that the appellant was eligible for the refund of the CENVAT Credit paid on inputs used in manufacturing goods for export. The impugned order was deemed unsustainable and set aside, allowing the appeal with consequential relief, if any.