2017 (9) TMI 1049 - AT - Central Excise

Refund of unutilised CENVAT credit - denial on the ground that the inputs were not used in a particular month, for the manufacture of exported goods, but used in the subsequent months - Held that - undisputedly the inputs were used in the manufacture of finished goods which were ultimately exported resulting into accumulation of the Cenvat Credit on which the appellant claimed cash refund as per Rule 5 of CCR, 2004 - It is not the intentions that there should be one-to-one relationship between the inputs and the finished goods in claiming cash refund of the credit, accumulated due to export - the appellant s are eligible to the cash refund of the accumulated credit, except the amount of credit availed on sugar cess , included in the said refund claim - decided partly in favor of appellant.

Summary

Issues:
1. Appeal against rejection of refund claim of accumulated CENVAT Credit on monthly basis for export of goods.
2. Dispute regarding the usage of inputs in the same month for manufacture and export of goods.
3. Eligibility for cash refund of accumulated CENVAT credit under Rule 5 of CCR 2004.
4. Admissibility of credit on 'sugar cess' for cash refund.

Analysis:
The appeal was filed against the rejection of a refund claim of accumulated CENVAT Credit on a monthly basis for exporting goods. The appellant filed seven monthly refund applications under Rule 5 of CCR 2004 for the period March 2009 to Sept. 2009. The issue arose when the authorities denied the cash refund for a particular month, amounting to &8377; 13,61,459, including credit availed on 'sugar cess', alleging that the inputs were not used in the same month for manufacturing the exported goods but in subsequent months. The appellant contended that the inputs were indeed used in the manufacture of export goods, and hence, the accumulated credit should be allowed. However, they acknowledged that credit on 'sugar cess' was not admissible, and they were not entitled to a cash refund for the same.

The Revenue, represented by the Ld AR, supported the findings of the Ld Commissioner (Appeals) regarding the rejection of the refund claim. The Member (Judicial) analyzed the situation and found that the inputs were utilized in manufacturing finished goods that were eventually exported, leading to the accumulation of CENVAT Credit. The Revenue argued that inputs should have been used in the same month to be eligible for cash refund, which the Member did not agree with. The Member clarified that the objective was to allow cash refund of accumulated CENVAT credit used in manufacturing export goods, even if the inputs were utilized in subsequent months. It was emphasized that a one-to-one relationship between inputs and finished goods was not necessary for claiming cash refund. Consequently, the appellant was deemed eligible for cash refund of the accumulated credit, except for the credit on 'sugar cess'. The impugned order was modified accordingly, and the appeal was disposed of in favor of the appellant.