2012 (10) TMI 915 - AT - Central Excise

Refund of cenvat credit - Period of limitation - 100% EOU - accumulated CENVAT credit at the time of debonding refund claim was rejected as time barred as the refund related to period from 1.4.2005 to 31.3.2007 and the claim having been received on 9.4.2008 Held that - Claim for refund of CENVAT credit relating to export should be made on a quarter basis is more for administrative convenience and this is to discourage the exporters to prefer too many claims leading to voluminous work at the divisional level. This does not specify any time limit for claiming the refund of credit - refund of CENVAT credit can be allowed only after the export has taken place - refund claimed in any quarter should relate to CENVAT credit on inputs contained in goods exported during that quarter or earlier quarters and not in respect of goods to be exported - refund claim has been rejected is not sustainable - matter is remanded to the original authority

Summary

Issues:
Appeal against order of the Commissioner rejecting refund claim as time-barred under Rule 5 of the CENVAT Credit Rules.

Analysis:
The case involved an appeal against the Commissioner's order rejecting a refund claim as time-barred under Rule 5 of the CENVAT Credit Rules. The appellants, a 100% Export Oriented Unit (EOU), de-bonded their unit with accumulated CENVAT credit due to export of goods. The refund claim was filed for an amount of Rs.7,40,720/- for the period April 2005 to March 2007. A show-cause notice was issued proposing to reject the claim as time-barred, as it was received after the prescribed period. The original authority and the Commissioner (Appeals) upheld the rejection.

The appellant argued, citing the Tribunal's decision in GTN Engineering (I) Ltd. v. CCE, that the time limit under Section 11B does not apply to credit accumulated due to export and claimed as a refund under Rule 5. The Superintendent (AR) contended that the refund was made after de-bonding, and the original authority only held the claim as time-barred without considering other aspects.

The Tribunal, after considering submissions, noted that the refund was of accumulated CENVAT credit claimed under Rule 5, and the time limit under Section 11B was not applicable as per the GTN Engineering case. It highlighted that the claim rejection based on lack of document production and time-bar was erroneous. The Tribunal clarified that Section 11B pertains to refund of duty paid, not CENVAT credit, and cited precedents supporting non-applicability of time limits to credit accumulated from exports.

Consequently, the Tribunal found the rejection ground unsustainable and remanded the matter to the original authority for a fresh consideration of the refund claim, emphasizing the need to verify the correctness of the amount and the credit's relation to exports. The appeal was disposed of accordingly, setting aside the time-barred rejection and directing a reevaluation of the refund claim by the original authority.