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2013 (12) TMI 1187 - AT - Central ExciseRefund of un-utilised cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 Held that - Following Commissioner of Central Excise, Bangalore-III Vs. Motherson Sumi Electric Wires 2009 (5) TMI 498 - CESTAT, BANGALORE - inputs used in goods which were exported under bond/letter of undertaking and the refund of credit having been accumulated from time to time, which the assessee was not able to utilize, is required to be refunded in terms of the Rule 5 of Cenvat Credit Rules. In Commissioner of Central Excise, Ahmedabad Vs. Surya International 2010 (6) TMI 702 - CESTAT AHMEDABAD - an assessee cannot be compelled to make exports under rebates and the exports under bond are entitled to refund of input or input service credit - Rule 5 of the Cenvat Credit Rules, 2002 is a beneficiary piece of legislation and central excise officers has no jurisdiction to curtail it and find reason for non-adjustment or non-utilisation and the refund of un-utilised credit being a substantive right, has to be allowed Decided in faovur of Assessee.
Issues:
Refund of un-utilised cenvat credit under Rule 5 of Cenvat Credit Rules, 2004. Analysis: Issue: Refund of un-utilised cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 The dispute in the appeal pertained to the rejection of the appellant's refund claim of un-utilised cenvat credit by the lower authorities. The rejection was based on the premise that the appellant could have utilized the credit by exporting goods on payment of duty under a claim of rebate. The lower authorities contended that the appellant allowed the cenvat credit to accumulate by not exporting goods on payment of duty, leading to the rejection of the refund claim. However, the Tribunal, after considering the arguments from both sides, referred to various decisions to establish that the issue was settled. Citing cases such as Commissioner of Central Excise, Bangalore-III Vs. Motherson Sumi Electric Wires and Chandra Cotton Fabrics Vs. CCE, Coimbatore, the Tribunal emphasized that when manufacturers export goods under bond and are unable to utilize the credit for duty payment upon clearance for home consumption, they are entitled to receive periodic refunds of input credit. The Tribunal further highlighted that exporters are not obligated to choose the rebate option for exports, as they have the freedom to select from various options provided by the law. Additionally, the Tribunal underscored the protective nature of Rule 5 of the Cenvat Credit Rules, stating that central excise officers do not have the authority to restrict or find reasons for non-utilization of credit, as the refund of un-utilised credit is a substantive right that must be allowed. Consequently, the Tribunal set aside the impugned order and granted the appeals with consequential reliefs to the appellants. This detailed analysis provides a comprehensive understanding of the legal judgment, focusing on the issue of refund of un-utilised cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004. The judgment highlights the Tribunal's interpretation of relevant precedents and the protective nature of the legislation in favor of the appellants seeking refunds.
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