2017 (5) TMI 513 - AT - Central Excise

Refund claim of CENVAT credit - denial on the ground that the claim was filed under Rule 5 of CENVAT Credit Rules, 2004 as existed prior to CENVAT Credit (Third Amendment) Rules, 2012 - Held that - as per CBEC Circular No.83/2000 dated 16.10.2000 which is cited supra, the Board has clarified that even if the assessee has claimed drawback even then he is entitled to claim refund under Rule 5 of CCR - reliance was placed in the case of Commissioner of Central Excise, Khanpur vs. Meghdoot Pistons (P) Ltd. 2006 (4) TMI 21 - CESTAT, NEW DELHI wherein it has been held that The refund of Cenvat/Modvat credit has no relation to grant of drawback relatable to customs duties - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Claim of refund under Rule 5 of CENVAT Credit Rules 2004 prior to CENVAT Credit (Third Amendment) Rules, 2012, eligibility for refund under Rule 5 of CCR, 2004 after claiming drawback under Customs and Central Excise Duties Drawback Rules, 1995.

Analysis:
The case involved two appeals by the Revenue against orders passed by the Commissioner (A) regarding the rejection of a refund claim under Rule 5 of CENVAT Credit Rules. The appellant, a manufacturer of batteries, exported products under a Letter of Undertaking and filed a refund application for unutilized CENVAT credit on inputs. The Revenue contended that the refund claim was filed under the old Rule 5 of CENVAT Credit Rules, which was no longer applicable post the CENVAT Credit (Third Amendment) Rules, 2012. The Revenue argued that once the assessee claimed drawback under the Customs and Central Excise Duties Drawback Rules, 1995, refund of excise duty paid on inputs was barred under Rule 5 of CENVAT Credit Rules.

The appellant, on the other hand, defended the impugned orders, stating that the original authority rejected the claim based on grounds not mentioned in the notice. The appellant cited CBEC Circular No.83/2000, which allowed refund of unutilized credit of Central Excise duty paid on inputs used in exported products even if Customs duty drawback was claimed. The appellant also highlighted a successful refund claim for a subsequent quarter, emphasizing the inconsistency in the Revenue's stance.

The Tribunal, after hearing both parties and examining the records, referred to CBEC Circular No.83/2000 and a previous case law to establish that claiming drawback did not preclude the assessee from claiming a refund under Rule 5 of CENVAT Credit Rules. The Tribunal noted that the Commissioner (A) had considered all grounds raised by both parties and found in favor of the appellant. The Commissioner (A) highlighted the eligibility of the appellant for a refund under the erstwhile Rule 5 and directed the Assistant Commissioner to decide on the refund claim based on merit.

Ultimately, the Tribunal upheld the impugned orders passed by the Commissioner (A), dismissing the appeals of the Revenue and disposing of the cross objections filed by the appellant. The judgment emphasized the eligibility of the appellant for a refund under Rule 5 of CENVAT Credit Rules despite claiming drawback under Customs and Central Excise Duties Drawback Rules, 1995.