2008 (12) TMI 184 - AT - Central Excise

Refund of Cenvat Credit Cenvat Credit accumulated supply against CT-3 to EOU - The appellants had claimed refund of Rs. 1,00,817.31 being the accumulated input credit on account of their clearing the final goods without payment of duty to an EOU Held that - Clearances to an EOU have to be treated as export and refund of Un-utilized credit allowed to the assessee - documents evidencing clearances of final products to the EOU should be accepted as proof of export envisaged in clause (6) of the Appendix to the Notification No. 11/02-C.E. (N.T.) appeal allowed by way of remand to re-examine the objections.

Summary

Issues:
Claim for refund of Cenvat credit accumulated on account of clearances to an EOU in 2003. Rejection of refund claim due to failure to provide proof of export as per prescribed conditions under Notification No. 11/2002-C.E. (N.T.). Appellants' argument against the requirement of furnishing proof of export. Applicability of legal provisions under Rule 5 of CCR and Notification No. 11/02-C.E. (N.T.). Claim filed in 2005 for clearances made in 2003 and the issue of limitation under Section 11B of the Act.

Analysis:
The case involved M/s. Manoj Handlooms, Chennai, seeking a refund of Cenvat credit accumulated on clearances to an EOU in 2003. The Commissioner denied the refund, citing non-compliance with conditions specified in Notification No. 11/2002-C.E. (N.T.), particularly related to proof of export as per clauses (4) & (6) of the Appendix. The appellants argued that proof of export was not required, as they had submitted documents like ARE-3s showing clearances to the EOU. The Tribunal noted relevant case laws supporting refund claims for clearances to EOUs treated as exports.

The Tribunal considered the requirement of proof of export for refund eligibility. The appellants' claim for refund of accumulated input credit on clearances to an EOU was upheld, emphasizing that clearances to an EOU should be treated as exports. The Tribunal referenced case laws like Shilpa Copper Wire Industries, Gulshan Prints P. Ltd., and Himachal Wire Industries (P) Ltd. to support the decision. The Commissioner's rejection was based on the lack of proof of export of final goods, which the Tribunal found satisfied through documents evidencing clearances to the EOU.

The Tribunal remanded the case to the original authority for re-examination, emphasizing that documents showing clearances to the EOU should be accepted as proof of export as required by the Notification. The Tribunal highlighted that the appellants should be given an opportunity for an effective hearing. The appeal was disposed of based on the above terms, addressing the issues raised regarding the refund claim, proof of export, and the applicability of legal provisions and time limitation under Section 11B of the Act.