2018 (2) TMI 530 - AT - Central Excise

Refund of unutilized CENVAT credit - denial on the ground of limitation - Held that - It is now well-settled that the claim for each quarter being restricted to one the relevant date should be taken to be the last date of the quarter during which the exports have taken place. It is therefore apparent that the lower authorities have adopted an incorrect relevant date to the detriment of the appellant. The refund application restored to the original authority for deciding afresh on the eligibility to refund - appeal allowed by way of remand.

Summary

Issues:
Challenge to the application of the bar of limitation to the claim for refund under rule 5 of CENVAT Credit Rules, 2004.

Analysis:
In this appeal, M/s Poona Brush Co contested the order-in-appeal by the Commissioner of Service Tax (Appeals) regarding the application of the bar of limitation to the claim for refund under rule 5 of CENVAT Credit Rules, 2004. The issue revolved around the taxes/duties suffered on inputs/input services used for manufacturing "industrial and special purpose brushes" supplied to merchant exporters. The appellant, covered by the exemption for small-scale industries, could not utilize the accumulated CENVAT credit. Two refund claims were filed on 29th April 2014, totaling `8,22,139, which were deemed time-barred by the lower authorities, citing the date of export as the relevant date for admissibility.

The appellate tribunal noted that the claims for refund of CENVAT credit were governed by notification no. 27/2012-CE (NT) dated 18th June 2012. While the procedure referred to section 11B of the Central Excise Act, 1944, it did not specify the application of the "relevant date." It was established that for each quarter, the claim should be limited to one, and the relevant date should be the last date of the quarter in which the exports occurred. The tribunal found that the lower authorities erred in adopting an incorrect "relevant date," which disadvantaged the appellant. Consequently, the impugned order was set aside, and the refund application was remanded to the original authority for reassessment, considering the application to have been filed within the limitation period. The appeal was disposed of accordingly.