2017 (11) TMI 1455 - AT - Central Excise

Refund claim - whether the appellant is entitled for refund of accumulated credit on the ground that the appellant was not in a position to utilize the credit on duty paid inputs in respect of final products exported under bond? Held that - As per the facts of the case though the credit was accumulated when initially the appellant filed refund claim but after the aforesaid Tribunal order when the Assistant Commissioner considered the sanction of refund claim he noticed that the appellants have already utilized the claimed amount of ₹ 1,98,82,260/- and they have not maintained the balance of accumulated credit at least the amount of claim made by them in their RG-23A Part-II account and the balance was nil - since there was no accumulated Cenvat Credit available in the books of the appellant, there is no question of refund - appeal dismissed - decided against appellant.

Summary

Issues involved:
Refund of accumulated credit on duty paid inputs for final products exported under bond.

Analysis:
The appellant sought a refund of accumulated credit on duty paid inputs for final products exported under bond. The refund claim was initially rejected by the adjudicating authority and upheld by the Commissioner (Appeals). However, the Tribunal, in a previous order, allowed the appeal, stating that the appellant was eligible for the refund. The appellant's claim was based on the fact that they were unable to utilize the credit during the period of export. The adjudicating authority, upon reevaluation, found that the appellant had utilized the accumulated credit during the litigation period, leading to the rejection of the refund claim. The appellant contended that the lower authorities had no jurisdiction to reject the claim after the Tribunal's decision. The Revenue argued that the utilized amount was not eligible for refund under Rule 5 of the Cenvat Credit Rules, 2004.

Upon review, it was found that the appellant did not dispute the utilization of the accumulated credit, resulting in a nil balance in the Cenvat account. The Tribunal's previous order explicitly allowed the refund of accumulated Cenvat Credit on duty paid inputs against exports made. Despite the initial accumulation of credit, the appellant had already utilized the claimed amount, leaving no balance for refund. As there was no accumulated credit available in the appellant's books, the refund was deemed ineligible. The Tribunal upheld the lower authorities' decision, stating that the refund could not be granted as the appellant had utilized the accumulated credit, even though the Tribunal had previously allowed the refund. Therefore, the appeal was dismissed, affirming the rejection of the refund claim.

In conclusion, the judgment emphasized the importance of maintaining an accumulated credit balance for refund eligibility, even if initially allowed by the Tribunal. The utilization of accumulated credit during the litigation period led to the denial of the refund claim, highlighting the significance of compliance with Cenvat Credit Rules for refund entitlement.