2019 (1) TMI 1658 - AT - Central Excise

Refund of accumulated unutilized CENVAT Credit - supply to 100% EOU - Since supply of goods to EOU is not qualifying the requirements provided under the said amended Clause inserted with effect from 01.03.2015 the refund benefit was denied by the learned Commissioner (Appeals). Whether the supply made to 100% EOU should be considered as export and can the assessee be entitled for refund of accumulated CENVAT Credit under Rule 5 of the Rules? HELD THAT - Clause (1A) was inserted in the Explanation 1 appended to Rule 5 of the Rules vide Notification No. 6/2015-CE (N.T.) dated 01.03.2015. The said amended Rule has clarified that export of goods means any goods which are to be taken out of India to a place outside India . In these cases since the appellant had cleared the goods to 100% EOUs located within the country the requirement of taking out the goods to a place outside India is not satisfied. In view of the fact that the refund applications were filed after amendment of Rule 5 of the Rules for claiming refund benefit requirements contained in the statute are strictly to be adhered to - Since the goods in question were not physically exported outside country benefit of refund provided under the said Rules shall not be applicable to the appellant. In identical case this Tribunal in the case of THE COMMISSIONER OF CENTRAL EXCISE PUNE-III VERSUS TRIMURTI PLAST CONTAINERS PVT LTD 2018 (3) TMI 325 - CESTAT MUMBAI has allowed the appeal of Revenue on the ground that refund benefit should not be available to the assessee. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Failure of the appellant to appear for the hearing despite notice.
2. Denial of refund of accumulated CENVAT Credit to the appellant by the Commissioner (Appeals).
3. Whether supply made to 100% EOU should be considered as export for the purpose of refund under Rule 5 of the Rules.

Analysis:
1. The appellant failed to appear for the hearing despite multiple adjournments, indicating a lack of seriousness in pursuing its statutory right of appeal. The Tribunal, with the assistance of the learned A.R. for Revenue, proceeded with the disposal of the appeals based on available records.

2. The appellant, engaged in the manufacture of excisable goods, had cleared goods to 100% EOUs against CT-3 bond without paying excise duty during the disputed period. The appellant filed refund applications under Rule 5 of the Cenvat Credit Rules, 2004, claiming refund of accumulated unutilized CENVAT Credit balance. The Commissioner (Appeals) denied the refund benefit due to the insertion of Clause (1A) in the Explanation appended to Rule 5 of the Rules, which excluded supply to EOUs from qualifying for the refund benefit.

3. The key issue for consideration by the Tribunal was whether the supply made to 100% EOU should be treated as an export, thus entitling the appellant to a refund of accumulated CENVAT Credit. The Tribunal noted that the amended Rule clarified that "export of goods means any goods which are to be taken out of India to a place outside India." Since the goods were cleared to EOUs within the country, they did not meet the requirement of being taken outside India. Refund benefits under the Rules were applicable only if goods were physically exported outside the country. Citing a similar case, the Tribunal highlighted a previous order where the appeal of Revenue was allowed on the grounds that refund benefits should not be available in such cases.

In conclusion, the Tribunal found no merit in the appeals filed by the appellant and dismissed them accordingly.