2016 (6) TMI 993 - CGOVT - Central Excise

Refund of un-utilized cenvat credit - rejection of refund to the extent transferred from other unit - Condonation of delay - export of Indian Mouth Freshner falling under chapter Sub-Heading No.21069020 - The Commissioner (Appeals) decided the case in favour of respondent assessee as there was no confirmed demand of ₹ 1,44,16,817/- against the respondent for violation of Rule 10 of the Cenvat Credit Rules. Now the Department has filed this Revision Application under Section 35EE of the Central Excise Act, 1944 before the Central Government on grounds mentioned in para 4 above. Held that - the present application has been filed within a period of three months from the relevant date even though it was sent to the wrong address due to the misdirection of the Appellate Commissioner and Committee of Commissioners. If the application had not been wrongly addressed, it would have reached the Revision Application Unit at the correct address well within time as it reached the address to which it was sent as per the postal authorities. - Government holds that the revision application has been filed within time under Section 35EE of the Central Excise Act, 1944 and question of being hit by limitation does not arise. Government observes that under Section 35 EE of the Central Excise Act, 1944, a Revision Application against the Order of Commissioner (Appeals) passed under Section 35 A ibid lies with Government only if such orders relate to cases as mentioned in the proviso to sub-section (1) of Section 35(B) of the Act. As the issue covered in this Revision Application relates to refund of unutilized credit under Rule 5 of Cenvat Credit Rules 2004, the subject matter is not covered in the first proviso to sub-section (1) of Section 35 B of the Central Excise Act 1944. Therefore, Revision Application on this issue does not lie before Central Government under Section 35 EE of the Central Excise Act, 1944. Further, Government observes that the Department as in the authorization to file Revision Application under Section 35EE (2) has erred in considering the issue as a case of rebate of duty. - Revision application dismissed - Decided against the revenue.

Issues Involved:
1. Admissibility of refund of accumulated Cenvat Credit under Rule 5 of the Cenvat Credit Rules, 2004.
2. Compliance with Rule 10 of the Cenvat Credit Rules, 2004 regarding the transfer of Cenvat Credit.
3. Limitation period for filing the Revision Application under Section 35EE of the Central Excise Act, 1944.
4. Jurisdiction of the Central Government under Section 35EE of the Central Excise Act, 1944.

Detailed Analysis:

1. Admissibility of Refund of Accumulated Cenvat Credit:
The respondents, manufacturers of Indian Mouth Freshner, filed a refund claim of ?2,57,77,440/- under Rule 5 of the Cenvat Credit Rules, 2004, for the accumulated Cenvat Credit attributable to inputs used in the manufacture of exported goods. The lower authorities observed that this amount included ?1,44,10,817/- transferred from their old unit at Vasai to the present unit at Guntur under Rule 10 of the Cenvat Credit Rules. A Show Cause Notice was issued to disallow the refund to the extent of ?1,44,10,817/- as it was considered irregularly availed credit due to the transfer. The adjudicating authority rejected the refund claim of ?1,44,16,817/- on these grounds. The Commissioner (Appeals) decided in favor of the respondent, noting the absence of a confirmed demand for the amount in question.

2. Compliance with Rule 10 of the Cenvat Credit Rules, 2004:
The Department argued that the respondents did not comply with Rule 10 of the Cenvat Credit Rules, 2004, which governs the transfer of Cenvat Credit when a factory is shifted. The respondents did not obtain necessary clearance certificates or fact statements from the jurisdictional Central Excise authorities of Vasai Division, Maharashtra, regarding their Central Excise credits/liabilities/plant and machinery/raw materials/semi-finished goods/finished goods. The respondents availed the credit suo moto, contravening the provisions of Rule 10 (3) of the Cenvat Credit Rules, which requires documentary evidence and approval from the jurisdictional authorities.

3. Limitation Period for Filing the Revision Application:
The respondents contended that the Revision Application was time-barred. The Hon'ble High Court of Telangana and Andhra Pradesh directed the Revisionary Authority to decide the pending Revision Application uninfluenced by observations regarding limitation. The Government examined the facts and noted that the Revision Application was dispatched within the prescribed period but sent to the wrong address due to misdirection. The Government held that the Revision Application was filed within time under Section 35EE of the Central Excise Act, 1944, considering it reached the address to which it was sent within the prescribed period.

4. Jurisdiction of the Central Government under Section 35EE:
The Government observed that under Section 35EE of the Central Excise Act, 1944, a Revision Application against the Order of Commissioner (Appeals) lies only if such orders relate to cases mentioned in the proviso to sub-section (1) of Section 35B of the Act. The issue of refund of unutilized credit under Rule 5 of the Cenvat Credit Rules, 2004, is not covered under Section 35B (1). Therefore, the Revision Application on this issue does not lie before the Central Government under Section 35EE. The Government consistently held in previous decisions that refund of unutilized credit under Rule 5 is not maintainable under Section 35EE.

Conclusion:
The Revision Application was held to be filed within time under Section 35EE (2) of the Central Excise Act, 1944. However, it was deemed beyond jurisdiction under Section 35EE read with Section 35B (1) and thus not maintainable before this authority. The applicant was advised to approach the appropriate authority under Section 35B of the Central Excise Act, 1944, for a decision on merits. The Revision Application was disposed of accordingly.

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