2016 (11) TMI 912 - AT - Central Excise

Refund claim - unutilised input credit - duty drawback - As per the provision of Rule 5 read with Notification No. 5/2006-CE(NT) if the drawback or rebate is claimed on the exported goods, refund under Rule 5 shall not be allowed - Held that - the appellant under Rule 5 is only in respect of goods exported under UT-1. Under the provision of Rule 5 and Notification issued there under, there is no restriction that entire export should be made under a particular scheme either under Rule 5 of drawback or rebate. Therefore, the part of the consignment can be cleared under rebate, drawback or claim of refund under UT-1, therefore when the goods have been exported under UT-1 irrespective of the fact that other consignments were cleared under rebate or drawback, refund under Rule 5 in respect of goods cleared UT-1 cannot be denied. I find that the adjudicating authority has not correctly quantified the amount of refund on the input used in the goods exported under UT-1. Therefore the matter needs to be remanded to the adjudicating authority for correct quantification of the refund amount - appeal disposed off - matter on remand.

Summary

Issues:
Refund claim under Rule 5 of Cenvat Credit Rule 2004 denied due to availing drawback and rebate claim.

Analysis:
The appellant, engaged in manufacturing Organic Chemicals, filed a refund claim for unutilized input credit under Rule 5 of Cenvat Credit Rule 2004 for the period January 2009 to March 2009. The adjudicating authority sanctioned only a portion of the claim, leading to an appeal by the appellant against the Commissioner's decision allowing the Revenue's appeal and setting aside the original order. The Commissioner based the decision on the appellant availing drawback and rebate claims, which, according to Rule 5, would disallow the refund if claimed on exported goods simultaneously. The appellant contested this decision, stating that the refund was claimed only on goods exported under UT-1, without simultaneous claims on rebate or drawback for those specific consignments.

The Tribunal carefully reviewed the submissions and records. It found that the original order correctly quantified the service tax refund but erred in calculating the input credit for the exported goods. The Tribunal disagreed with the Commissioner's decision to reject the refund based on the appellant's availing of drawback and rebate claims. It clarified that under Rule 5 and related notifications, there is no restriction on exporting goods under a specific scheme, allowing for different consignments to be cleared under rebate, drawback, or refund under UT-1. Therefore, the Tribunal ruled that the refund under Rule 5 for goods cleared under UT-1 should not be denied, even if other consignments were cleared under different schemes. The Tribunal remanded the matter to the adjudicating authority for correct quantification of the refund amount, allowing the appellant to provide necessary documents for accurate calculation. The adjudication was instructed to be completed within two months from the date of the order, disposing of the appeal through remand.