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2017 (5) TMI 270 - AT - CustomsRefund claim - SAD - N/N. 102/2007-Cus dated 14.9.2007 - appellant claims that even though initially they have availed the CENVAT credit of the duty paid on the said imported goods, but later the credit had been reversed before clearance/sale and also before filing the refund claims - Held that - Similar issue has been dealt by Hon ble Gujarat High Court in the case of Ashima Dyecot Limited 2008 (9) TMI 87 - HIGH COURT GUJARAT , in the context of eligibility of N/N. 30/2004 CE, where the condition was non-avaiment of Credit on the inputs; the circumstance was similar to the present one, that is, the credit initially taken, but later reversed while claiming the benefit of the exemption notification and it was held that credit availed of and reversal would amount to the effect as if the same was not availed - refund allowed - decided in favor of appellant.
Issues involved:
Appeal against Orders-in-Appeal rejecting refund claims based on availing CENVAT credit of duty paid on imported goods under Exemption Notification No.102/2007-Cus. Detailed Analysis: 1. Issue of Availing CENVAT Credit and Reversal: The appellants availed benefit of Exemption Notification No.102/2007-Cus on imported goods where 4% Additional Duties of Customs were paid. The dispute arose when it was alleged that the appellants failed to fulfill the condition of the Notification by availing and utilizing CENVAT credit of the duty paid on the goods. The appellants argued that although they initially availed the credit, it was later reversed before clearance/sale and before filing the refund claims. This action, according to the appellants, fulfilled the condition of the Notification. The Tribunal noted that the appellants indeed reversed the credit before claiming the refund, which was in line with the condition of the Notification. 2. Legal Precedent and Interpretation: The Tribunal referred to a judgment by the Hon'ble Gujarat High Court in a similar case of Ashima Dyecot Limited where the issue of non-availing credit on inputs for exemption eligibility was discussed. The High Court's decision emphasized the importance of reversing credit entries before removal of exempted final products. The Tribunal also cited a case where the Supreme Court held that reversal of credit entries is permissible under certain circumstances. The principle established in these cases supported the appellants' argument that reversal of credit before claiming exemption is valid. 3. Decision and Conclusion: Based on the legal precedents and the facts of the case, the Tribunal concluded that the appellants had complied with the conditions of the Notification by reversing the credit before claiming the refund. The Tribunal dismissed the appeals filed against the Orders-in-Appeal rejecting the refund claims. The impugned order was set aside, and the appeals were allowed with consequential relief as per law. The Tribunal found no merit in upholding the rejection of the refund claims and ruled in favor of the appellants based on the established legal principles and factual circumstances. In summary, the judgment by the Appellate Tribunal CESTAT Ahmedabad revolved around the issue of availing CENVAT credit on imported goods under an exemption notification. The Tribunal analyzed the actions of the appellants in reversing the credit before claiming the refund, in line with legal precedents and established principles. Ultimately, the Tribunal allowed the appeals, setting aside the rejection of refund claims and providing relief to the appellants in accordance with the law.
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