2016 (1) TMI 290 - AT - Central Excise

Denial of refund claim - Rule 5 of the Cenvat Credit Rules - statement shows lot wise utilization of inputs for export of goods - Held that - It is not possible for the appellant to utilise the credit of duty available on the goods cleared in the domestic market. Moreover, after 2004, alternate schemes are available and goods being cleared in domestic market are duty free. We, therefore, direct that under the circumstances, the appellant will be entitled to get the refund of the unutilized credit of duty as inputs used in the goods exported under bond. As far as the second point is concerned, the learned Counsel for the appellant submitted that it is possible for them to give ARE-1 wise details of the input used and their corresponding invoices. It will therefore, be possible to compute the credit of duty on inputs. However, the said exercise cannot be done at Tribunal stage and in view of this position, the matter is remanded to the original authority - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Refund claim under Rule 5 of the Cenvat Credit Rules for multiple months - Rejection of claim based on lot wise utilization of inputs - Appeal dismissed by Commissioner (Appeal) - Utilization of credit on inputs for goods exported - Possibility of utilizing accumulated Cenvat Credit for goods cleared in the domestic market.

Analysis:
The appellant filed a refund claim under Rule 5 of the Cenvat Credit Rules for several months, initially based on the average credit on inputs used for manufacturing goods. However, upon departmental pointing out, the claim was revised to reflect actual credit on inputs utilized for goods exported. The Assistant Commissioner rejected the claim citing lot wise utilization of inputs and discrepancies in the claim calculation based on an average rate. Additionally, it was noted that goods were also cleared in the domestic market, raising concerns about the utilization of accumulated Cenvat Credit.

The appellant argued that the duty credit on inputs exceeded the duty leviable on final products, making it impractical to utilize the credit due to exports. They provided detailed ARE-1 wise information on lot numbers, input credits, and invoices to support precise credit calculation. The appellate authority reiterated its findings, leading to the matter being brought before the Tribunal for resolution.

Upon evaluating the submissions, the Tribunal found that the appellant had not paid any duty in PLA as the credit on inputs surpassed the duty payable on goods cleared domestically. Considering this, the Tribunal directed the refund of unutilized duty credit on inputs used for goods exported under bond. Regarding the detailed input credit calculation, the Tribunal acknowledged the appellant's ability to provide ARE-1 wise information but deemed this task unsuitable for the Tribunal stage. Consequently, the matter was remanded to the original authority for further scrutiny and additional information submission if necessary to comply with legal requirements.

In conclusion, the appeal was allowed by way of remand, emphasizing the expeditious disposal of the matter by the original authority, given its 2003 origin. The judgment clarified the entitlement to refund for unutilized duty credit on exported goods and the necessity of detailed input credit documentation for compliance, underscoring the importance of accurate claim submissions and procedural adherence in such cases.