2014 (6) TMI 826 - AT - Central Excise

Denial of refund claim - Surrender of registration - Whether refund claim filed by the appellant under Rule 5 of the Cenvat Credit Rules 2004 after surrender of the registration is admissible or not - Held that - First appellate authority has rejected the refund claim of the appellant on the ground that appellant has not produced any evidence to prove that the goods have been exported under bond and the unutilized credit has accumulated due to export under bond. It is observed from the case records that the facts available on records clearly suggest that the goods were supplied to 100% EOU under CT-3 certificates as a result of which Cenvat Credit got accumulated in the records of the appellant. These facts are not disputed by the adjudicating authority and Commissioner (Appeals) has clearly gone beyond the scope of the show cause notice to raise the issue of export of goods is not under bond. Refund claim can be filed once in a year and it is not obligatory to file periodical refund claims as prescribed under Notification No.5/2006-CE(NT). It is the case of the appellant that refund claim is filed within a period of one year from the relevant date as specified in Explanation (B) of Section 11B of the Central Excise Act 1944 - As there is no clarity from the rival submissions made by either sides whether refund claim was filed by the appellant within one year or not. This verification can only be done by the adjudicating authority. For getting this verification made the matter is required to be remanded back to the adjudicating authority - Decided in favour of assessee.

Summary

Issues:
1. Admissibility of refund claim of unutilized Cenvat Credit under Rule 5 of the Cenvat Credit Rules, 2004 after surrendering service tax registration.
2. Whether clearances to 100% EOU under CT-3 certificates should be considered as exports for refund under Rule 5.
3. Time bar for filing refund claims under Section 11B of the Central Excise Act, 1944.

Analysis:
1. The appellant filed a refund claim of unutilized Cenvat Credit under Rule 5 after surrendering service tax registration. The first appellate authority rejected the claim citing non-fulfillment of conditions specified in Notification No.5/2006-CE(NT) and lack of evidence for goods exported under bond. The claim was also deemed time-barred for being filed after 18 months from registration surrender.

2. The appellant argued that clearances to 100% EOU under CT-3 certificates should be treated as exports for refund under Rule 5. Citing relevant judgments, the appellant contended that such clearances qualify as exports. The High Court of Gujarat's decision supported this view, considering clearances to 100% EOU as deemed exports, favoring the appellant's case.

3. The revenue contended that the refund claims did not meet the time limit specified in Section 11B of the Central Excise Act, 1944. Referring to the judgment in CCE, Coimbatore Vs. GTM Engineering (I) Ltd., it was argued that Section 11B limitations apply to refund claims under Rule 5 when read with Notification No.5/2006-CE(NT). The appellant, however, relied on the CESTAT-Mumbai decision to support the argument that refund claims can be filed annually, not periodically as per the notification.

4. The Tribunal found in favor of the appellant regarding the admissibility of the refund claim, considering clearances to 100% EOU as deemed exports based on the High Court's decision. However, the issue of the refund claim's time bar was remanded to the adjudicating authority for verification. The appellant was granted the opportunity for a personal hearing in the denovo proceedings. The appeal was allowed on merits, subject to the verification of the time limit for filing the refund claim.