2016 (6) TMI 759 - AT - Central Excise

Disentitlment to refund of Unutilised Credit under Rule 5 of the CENVAT Credit Rules, 2004 - intermediate goods were cleared by the appellant to the EOU and such goods having undergone processing by EOU resulting in output that was exported by that EOU - Held that - There is no doubt that Revenue has conceived that the goods cleared by the appellant were intermediate goods and were cleared to EOU. The said EOU after processing that had exported. The finished goods arose out of that. Therefore, the appellant satisfied the condition of Rule 5(1) of CENVAT Credit Rules, 2004 effectuating export of the goods in question through the EOU. However the relief of refund of unutilised credit shall be subject to the working out of the quantum thereof in terms of in the formula prescribed by that Rule. There should be no dispute at all in respect of the calculation of quantum of refund applying the respective formula. Thus matter is remanded to the adjudicating authority to calculate the appropriate amount of refund admissible as per the formula prescribed by Rule 5 of CENVAT Credit Rules, 2004 and grant the same to the appellant as expeditiously as possible. - Decided in favour of assessee

Summary

Issues:
1. Eligibility for refund of Unutilised Credit under Rule 5 of the CENVAT Credit Rules, 2004 when intermediate goods cleared to EOU are processed and exported resulting in finished goods.

Analysis:
The primary issue in this case revolves around the eligibility of the appellant for a refund of Unutilised Credit under Rule 5 of the CENVAT Credit Rules, 2004. The appellant contends that even intermediate goods can be exported without duty payment as per the said Rule, especially after its amendment in 2012. The Revenue agrees that the goods cleared were intermediate and sent to an EOU for processing and subsequent export of finished goods. Consequently, the appellant meets the conditions of Rule 5(1) by effectuating the export through the EOU. However, the exact quantum of refund remains to be determined based on the formula specified in the Rule.

The Tribunal acknowledges the Revenue's position and directs the matter to be remanded to the adjudicating authority for the calculation of the appropriate refund amount according to the prescribed formula in Rule 5 of the CENVAT Credit Rules, 2004. The Tribunal emphasizes the need for a swift resolution in determining the refund quantum and instructs the authority to grant the refund to the appellant promptly.

In conclusion, the Tribunal remands both appeals to the adjudicating authority with a clear directive to calculate and provide the appellant with the rightful refund amount as per the formula outlined in Rule 5 of the CENVAT Credit Rules, 2004. The judgment underscores the importance of adhering to the prescribed procedures for determining the refund and ensuring a timely resolution for the appellant.