2017 (1) TMI 700 - AT - Central Excise

Refund of CENVAT credit - denial on the ground that the respondent failed to establish that the credit involved on the inputs/input services were used for the final products exported during the said quarter - Held that - the Ld. Commissioner(Appeals) interpreting N/N. 5/2006-CE(NT) dated 14.03.2006, issued under Rule 5 of Cenvat Credit Rules, 2004 and also following the judgement of this Tribunal in Capiq Engineering Pvt. Ltd. 2008 (10) TMI 84 - CESTAT, AHMEDABAD , observed that there is no one to one co-relation required for utilisation of inputs/input services used in or in relation to the manufacture of final product, ultimately exported so as to allow cash refund under Rule 5 of Cenvat Credit Rules, 2004 - refund allowed - appeal rejected - decided against Revenue.

Summary

Issues:
Appeal against denial of cash refund of CENVAT credit under Rule 5 of Cenvat Credit Rules, 2004 for inputs used in exported final products.

Analysis:

1. Issue of denial of cash refund of CENVAT credit:
The appeal was filed by Revenue against the order denying cash refund of CENVAT credit for inputs used in exported final products. The respondents, engaged in manufacturing Plastic Moulded Components, had filed a refund claim which was rejected based on the grounds of failure to establish the utilization of credit on inputs for exported final products. The Ld. Commissioner (Appeals) allowed the appeal filed by the respondents, leading to the Revenue's appeal.

2. Argument on utilization of inputs for exported final products:
The Revenue contended that the respondents failed to establish the use of inputs for the exported final products, referencing a Tribunal judgment. On the other hand, the Respondent's Advocate argued that there was no dispute regarding the utilization of inputs for the final products exported during the quarter. The Advocate highlighted that a one-to-one correlation was not necessary for claiming cash refund under Rule 5 of Cenvat Credit Rules, 2004, citing relevant judgments to support this argument.

3. Interpretation of relevant laws and judgments:
The Ld. Commissioner (Appeals) interpreted Notification No. 5/2006-CE(NT) and relevant judgments to determine that a strict one-to-one correlation was not required for the utilization of inputs in the manufacture of exported final products to claim cash refund under Rule 5 of Cenvat Credit Rules, 2004. The Tribunal found no discrepancy in this interpretation, considering the precedents cited, and upheld the impugned order, rejecting the Revenue's appeal as lacking merit.

4. Final Decision:
After hearing both sides and examining the records, the Tribunal upheld the Ld. Commissioner (Appeals)'s decision, emphasizing that a one-to-one correlation was not mandatory for claiming cash refund under Rule 5 of Cenvat Credit Rules, 2004. As a result, the Revenue's appeal was deemed devoid of merit and rejected.

In conclusion, the judgment clarified the requirements for claiming cash refund of CENVAT credit under Rule 5 of Cenvat Credit Rules, 2004, emphasizing that a strict one-to-one correlation between inputs and exported final products was not necessary, based on the interpretation of relevant laws and precedents.