2017 (12) TMI 1017 - AT - Central Excise

Refund of unutilized CENVAT credit - DTA unit which was subsequently converted to 100% EOU - Board Circular No.77/99-Cus dated 18.11.1999 - Held that - refund claim is against the export of the goods therefore unjust enrichment is not applicable - reliance placed in the case of SAI CREATION Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III 2012 (8) TMI 842 - CESTAT MUMBAI , where it was held that When Section 11B providing for grant of refund of excise duty specifically provides that in certain specified situations, the provisions of unjust enrichment shall not apply, the law has to be interpreted and enforced accordingly - the appellant is entitled for the refund subject to verification of the documents by the sanctioning authority - appeal allowed by way of remand.

Summary

Issues:
Appeal against rejection of refund of Cenvat Credit claim for DTA unit converted to 100% EOU.

Analysis:
The appeals were filed against the rejection of refund of Cenvat Credit claim by the Commissioner (Appeals) on the basis that the appellant, who was initially a DTA unit, was not entitled to the refund after converting to a 100% EOU following a specific Board Circular. The appellant contended that the refund claim was made under Rule 5 of Cenvat Credit Rules 2004 for exports made by the unit. The Counsel for the appellant cited various judgments, including the case of Sandoz Pvt. Ltd. Vs. CCE, to support their argument that on conversion from DTA to 100% EOU, the assessee is entitled to avail Cenvat credit on inputs and capital goods. The Revenue reiterated the findings of the impugned order.

Upon careful consideration, the Member (Judicial) noted that the issue had been previously decided in the appellant's own case by the Tribunal, where it was held that on conversion to 100% EOU, the appellant was entitled to avail Cenvat credit on inputs and capital goods. The Member referred to the decision in Sandoz Pvt. Ltd. case, which was confirmed by the Hon’ble High Court of Bombay. The Member observed that the issue was no longer res integra and set aside the impugned order, allowing the appeal in favor of the appellant. The Member also addressed the issue of unjust enrichment raised by the original authority, stating that as the refund claim was related to exports, unjust enrichment did not apply. The Member further highlighted that the appellant's entitlement to the refund was supported by the judgments cited by the respondent in other cases. Consequently, the impugned orders were set aside, and the appeals were allowed, subject to verification of documents by the sanctioning authority.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the refund claim for Cenvat Credit despite the conversion of the unit from DTA to 100% EOU, based on previous decisions and legal precedents cited during the proceedings.