2018 (1) TMI 520 - AT - Central Excise

100% EOU - Refund of CENVAT credit - Rejection on the ground that they have filed one common application for refund for the six-month period October 2010 to March 2011 instead of application for each calendar month in view of Clause 2(b) of N/N. 5/2006-CE-(NT)? - Held that - the word may in Clause 2(b) of the said notification is by way of giving an option to assessee to file refund claims on monthly basis. Being an EOU by way of facilitation it does not put any embargo debarring the assessee for making a quarterly/half yearly/annually refund claim - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Claim of refund of CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No.5/2006-CE (NT) being rejected for filing one common application for a six-month period instead of monthly applications.

Analysis:
The appellant, a 100% EOU, filed a refund claim for a six-month period instead of monthly applications as required by Notification No.5/2006-CE (NT). The Revenue contended that the appellant violated the notification by not submitting claims for each calendar month. The Commissioner (Appeals) upheld the Revenue's appeal, stating that the notification mandates monthly submission of refund claims by EOUs. However, the appellant argued that the word 'may' in the notification provides an option to file claims monthly, quarterly, half-yearly, or annually. The appellant cited a Division Bench ruling in the case of Western Cans Pvt. Ltd. v. CCE, Mumbai-I, which clarified that the intent of the legislature was to avoid multiple refund claims and that claims need not be submitted monthly or quarterly. The Tribunal found in favor of the appellant, emphasizing that the word 'may' in the notification allows flexibility in filing refund claims, and the appellant is entitled to make quarterly, half-yearly, or annual claims.

The Tribunal held that the word 'may' in the notification gives the assessee the option to file refund claims on a monthly basis but does not restrict them from making quarterly, half-yearly, or annual claims. The ruling in Western Can Pvt. Ltd. v. CCE, Mumbai-I supported this interpretation, emphasizing that the intent was to prevent multiple refund claims and that claims need not be submitted monthly or quarterly. As a result, the Tribunal allowed the appeal, setting aside the Commissioner (Appeals) decision and granting the appellant consequential benefits in accordance with the law.