2015 (12) TMI 1204 - AT - Central Excise

Denial of refund claim - Unutilized CENVAT Credit - Notification No. 6/2002 - Held that - Appellants were eligible to avail deemed credit on the inputs procured by them for manufacture of textile and textile articles, during the period Sept, 2002 to Jan, 2003. It is also undisputed that during the relevant period, the appellant had manufactured and exported the goods on payment of duty. - there is no doubt that unutilized CENVAT Credit lying in the balance of the Books of the respondent is liable to be refund to him. No provisions were brought to our notice which indicate that such deemed credit would lapse after rescinding of Notification No. 6/2002 - concurrent findings of both the lower authorities that the appellant are eligible to avail CENVAT Credit has not been controverted by the Revenue in the grounds of appeal. The grievance of the Revenue seems to be that the respondent had filed the refund claim before the expiry of the quarter ending 31.3.2003 is a non-starter and the assessee can plan his business and can file the refund claim even before the quarter comes to an end. The other grievance of the Revenue that non-filing the return correctly is a procedural lapse as also and non-starter as when there is no dispute as to the fact that the assessee respondent in this case has utilized the inputs in manufacturing and exported the goods, the denial of credit will not be in consonance of the law. - impugned order is correct and legal and does not suffer from any infirmity - Decided against Revenue.

Summary

Issues involved:
1. Refund claim arising from unutilized CENVAT Credit under deemed credit provisions.
2. Timeliness and correctness of the refund claim filing.
3. Interpretation of exemption notification and procedural compliance.
4. Eligibility of the appellant to avail CENVAT Credit and refund.

Detailed Analysis:
1. The appeal concerned a refund claim filed by the respondent assessee for unutilized CENVAT Credit when exporting goods. The Revenue challenged the order sanctioning the refund claim, arguing that it was based on deemed credit provisions that ceased to exist after a notification rescission. The Revenue contended that the claim should have been filed quarterly and not for two quarters at a time. The lower authorities upheld the refund claim, citing the timely filing and utilization of inputs for manufacturing and export.

2. The respondent's counsel referenced similar cases where courts ruled in favor of the assessee based on identical worded notifications. The High Court decisions supported the assessee's position. The Tribunal analyzed the records and found the appellant eligible for deemed credit during a specific period. The Tribunal noted that the unutilized CENVAT Credit was refundable to the appellant, and no provisions indicated that the deemed credit would lapse post-notification rescission.

3. The Tribunal upheld the findings of the lower authorities, emphasizing that the appellant's eligibility for CENVAT Credit was not disputed by the Revenue. The Revenue's objections regarding the timing and correctness of the refund claim filing were deemed procedural matters that did not negate the substantive benefit of the refund. The Tribunal highlighted that the appellant's actions were within the period of limitation, and any procedural lapses did not warrant denial of credit.

4. Ultimately, the Tribunal concluded that the impugned order was legally sound and free from defects. The appeal by the Revenue was rejected, affirming the correctness of the lower authorities' decisions regarding the refund claim and the appellant's eligibility for CENVAT Credit. The judgment highlighted the importance of substantive benefits over procedural technicalities in such cases, ensuring compliance with the law while considering the practical aspects of business operations.