2015 (10) TMI 882 - AT - Central Excise

Denial of refund claim - Accumulated CENVAT Credit - Held that - If the refund can be granted to the appellant s when they have debited the amount not on the date of filing refund claim but on a later date - Held that - It is seen that the conditions prescribed in the notification having met although on a later date. The failure to debit on the date of filing the refund claim is not such a lapse that it would debar the appellants from the refund. On the day of debiting the CENVAT account they have fulfilled the conditions of the notification. In that event they become entitled to refund on that date. In view of above the impugned order is set aside, the appeal is allowed with consequential benefit. The matter is remanded for the limited matter of verification of arithmetical accuracy of refund. The same is directed to be completed within a period of 30 days from the receipt of this order and refund issued. - Decided in favour of assessee.

Summary

Issues:
Refund claim under rule 5 of CENVAT credit rules - Debiting amount from CENVAT account at the time of filing claim - Rejection of refund claim due to failure to debit amount at the time of filing - Appeal against Commissioner (Appeals) order denying refund claim - Entitlement to refund when amount debited on a later date.

Analysis:
The appellants, engaged in exports and registered as EOU, filed a refund claim under rule 5 of CENVAT credit rules for accumulated credit, as per conditions under notification 5/2006 CE (NT). Condition (h) of the notification required the claimant to debit the claimed amount from the CENVAT account at the time of making the claim. The appellants filed the claim on 25.04.2013 but did not debit the amount at that time, debiting it on 13.08.2013 instead. The refund claim was rejected solely due to the failure to debit the amount at the time of filing. However, it was confirmed that the amount was debited before the show-cause notice was issued, and the claim was not time-barred from the date of debit. The Commissioner (Appeals) also denied the claim, citing lack of documentary proof for debiting on the later date.

The appellants appealed against the Commissioner (Appeals) order, questioning whether they could be granted the refund despite debiting the amount at a later date than the filing of the claim. The Tribunal noted that although the conditions in the notification were met on a later date, the failure to debit at the time of filing should not bar the refund entitlement. Once the appellants debited the CENVAT account, fulfilling the notification conditions, they became entitled to the refund from that date. Consequently, the Tribunal set aside the impugned order, allowed the appeal with consequential benefit, and remanded the matter for verifying the arithmetical accuracy of the refund within 30 days from the receipt of the order, directing the refund issuance.