2008 (11) TMI 39 - HC - Central Excise

Tribunal concluded that a manufacturer is entitled for credit in respect of inputs used in exported goods Tribunal also concluded that if the goods were dutiable & exported under bond without payment of duty, the manufacturer would be entitled to refund of duty paid on inputs - hence Tribunal allowed the refund claim - Revenue submitted that respondent could claim DBK but he cannot be permitted to claim refund tribunals order require no interference substantial question not arise

Summary

Issues:
1. Entitlement of manufacturer for credit in respect of inputs used in exported goods.
2. Manufacturer's eligibility for refund of duty paid on inputs for exported goods.
3. Claiming duty drawback vs. claiming refund of credit under CENVAT Credit Rules.
4. Tribunal's conclusion on proof of export and allowing the refund claim.

Analysis:

1. The judgment addresses the issue of the entitlement of a manufacturer for credit in respect of inputs used in exported goods. The Tribunal concluded that a manufacturer is entitled to credit in such cases under the Central Excise Rules and CENVAT rules. The Tribunal also emphasized that whether the exported goods are exempted or dutiable, the manufacturer can claim credit for inputs used in the manufacturing process.

2. The judgment further delves into the eligibility of a manufacturer for a refund of duty paid on inputs for exported goods. The Tribunal examined various documents, including shipping bills, ARE-1 forms, bank realization certificates, and the CENVAT account, to verify the proof of export. It was concluded that the manufacturer had provided sufficient evidence of export, leading to the allowance of the refund claim.

3. The issue of claiming duty drawback versus claiming a refund of credit under the CENVAT Credit Rules was also discussed. The appellant argued that the respondent could claim duty drawback for the exported goods but should not be allowed to claim a refund. However, the Court referred to the proviso to Rule 5 of the CENVAT Credit Rules, which clearly states that a manufacturer cannot claim both drawback and refund. Since the respondent had opted for a refund, the Court held that claiming a drawback was not permissible.

4. Finally, the judgment upheld the Tribunal's decision, stating that no substantial question of law arose for consideration. The Court did not find any infirmity in the Tribunal's order and dismissed the appeal. The Tribunal's conclusion on the proof of export and the subsequent allowance of the refund claim were deemed correct, leading to the dismissal of the appeal.

In conclusion, the judgment clarifies the entitlement of manufacturers for credit in exported goods, the eligibility for a refund of duty paid on inputs, the choice between claiming duty drawback and refund under the CENVAT Credit Rules, and the importance of providing adequate proof of export to support refund claims.