2016 (6) TMI 353 - AT - Central Excise

Claim for refund of Cenvat credit of Additional Duties of Excise Textiles and Textile Articles - AED T&TA rejected - eligibility of the appellant for refund of AED T&TA lying in their Cenvat account from the date of exemption notification - applicability of time limit for the claim under Rule 5 - Held that - The amount of ₹ 22,54,910/- taken credit in November 2010 the books resulting in their eligibility to claim for which the claim is filed on 18/5/2011 cannot be considered as hit by time bar. The said claim is within one year, which is a general time limit, from the date of credit. The consideration that the claim should have been filed within one year of export is not applicable to the present case as the amount was claimed as rebate initially well within time. Regarding the remaining amount of the claim for which also the present refund claim relates, it is seen that the claim filed on 18/5/2011 cannot be extended to cover a credit available in the books of appellant on 09/7/2004. Even if it is considered that no specific time limit is prescribed for refund claim under Rule 5 in terms of Section 11B, the present claim for this amount after a period of more than six years cannot be covered even applying the provisions of General Clauses Act, 1897. We find that the appellant is, in principle, eligible for refund of AED T&TA under Rule 5 of Cenvat Credit Rules, 2004. However, considering the facts of the case and the applicability of time limit for such claim, as discussed above, the claim shall be restricted to the AED T&TA re-entered in the Cenvat credit account by the appellant in November 2010 and falling under the eligibility under Rule 5. As such the matter has to go back to the Original Authority to examine and quantify the eligible amount of refund in terms of above finding

Summary

Issues involved:
1. Refund claim of Cenvat credit of Additional Duties of Excise [Textiles and Textile Articles] - AED [T&TA].
2. Eligibility for refund under Rule 5 of Cenvat Credit Rules 2004.
3. Applicability of time limit for the claim under Rule 5.

Analysis:

Issue 1: Refund claim of Cenvat credit of AED [T&TA]
The appeal challenged the rejection of a refund claim for Cenvat credit of Additional Duties of Excise [Textiles and Textile Articles] - AED [T&TA]. The appellants were engaged in manufacturing MM Yarn and had availed credit of duty paid on inputs. Both inputs and final products were chargeable to AED [T&TA] until exempted on 09/7/2004. The appellants sought a refund for the unutilized credit balance of AED [T&TA] after exemption. The issue was whether the appellants were entitled to the refund claim.

Issue 2: Eligibility for refund under Rule 5 of Cenvat Credit Rules 2004
The appellants contended their eligibility for the refund under Rule 5 of Cenvat Credit Rules 2004 based on the Board's clarification and previous tribunal decisions. They argued that the unutilized accumulated credit of AED [T&TA] could be claimed as a refund on export of goods. The Revenue disputed the claim, stating that the export should have occurred under bond for Rule 5 to apply. The Tribunal found the Assessee's eligibility for the refund under Rule 5 and considered the accumulated credit that could not be utilized due to exports.

Issue 3: Applicability of time limit for the claim under Rule 5
Both the appellants and the Revenue debated the applicability of the time limit prescribed under Section 11B for the claim made under Rule 5. The Tribunal examined the facts of the case, including the re-credit taken by the appellants in November 2010, which made them eligible for the refund claim. The Tribunal concluded that the claim within one year of the credit was not time-barred, but the remaining amount claimed after more than six years was not eligible for refund due to the time limit.

In the judgment, the Tribunal determined that the appellants were eligible for a refund of AED [T&TA] under Rule 5 but restricted the claim to the re-entered credit in November 2010. The matter was referred back to the Original Authority for quantification of the eligible refund amount based on the findings. The appellants were instructed to provide all necessary details and documents to support the claim. The appeal was disposed of accordingly.