2016 (1) TMI 106 - AT - Central Excise

Claim of refund of utilized cenvat credit - Export of exempted Battery Operated Cars i.e. Electric vehicles - period from July 2009 to February 2010 - Held that - Commissioner (Appeals) held in favour of the respondents and by following the number of decisions, held that the assessee is entitled to refund claim. He relied upon the following decisions. 1) Repro India Ltd. Vs. Union of India 2007 (12) TMI 209 - BOMBAY HIGH COURT 2) CCE Vs. Drish Shoes Ltd. 2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT - The issue as to whether the unutilized accumulated credit can be refunded to the assessee in case of exports made by them stands fully and finally decided in favour of the assessee by the above referred decisions - Refund allowed.

Summary

Issues involved:
1. Refund of accumulated modvat credit for exported Battery Operated Cars.
2. Entitlement to cenvat credit of duty paid on inputs for exported exempted final products.
3. Applicability of previous decisions on refund claims.

Analysis:
1. The case involved the refund claim of accumulated modvat credit by the appellant, a manufacturer of Battery Operated Cars falling under Chapter 87 of the Central Excise Tariff Act 1985, which became exempt from central excise duty from 01.03.2008. The appellant exported the cars from July 2009 to February 2010 and claimed a refund of accumulated modvat credit as per Rule 5 of Cenvat Credit Rules.

2. The original adjudicating authority rejected the refund claim, stating that since the final product was exempted due to exports, the appellant was not entitled to the cenvat credit of duty paid on inputs. The Commissioner (Appeals), however, ruled in favor of the appellant, citing previous decisions such as Repro India Ltd. Vs. Union of India and CCE Vs. Drish Shoes Ltd., which supported the appellant's entitlement to the refund claim.

3. The Revenue, in their appeal, failed to provide reasons why the decisions of the High Courts were not applicable to the present case. They argued that since the final product was exempted from duty from 01.03.2008, the appellant had paid other duties using the accumulated cenvat credit and thus should not be refunded. However, the Member (J) found no merit in the Revenue's reasoning, stating that the issue of refunding unutilized accumulated credit for exports had been decisively settled in favor of the appellant by previous decisions. The Member (J) upheld the views of the Commissioner (Appeals) and rejected the Revenue's appeals.

In conclusion, the Appellate Tribunal CESTAT BANGALORE upheld the Commissioner (Appeals)' decision in favor of the appellant, allowing the refund claim of accumulated modvat credit for the exported Battery Operated Cars, based on the established legal principles and precedents in similar cases.