2018 (4) TMI 940 - AT - Central Excise

Whether the appellant have rightly taken Cenvat Credit on input service and whether they are entitled to refund under Rule 5 of CCR read with Notification No. 27/2012? Held that - the learned Commissioner (Appeals) have rightly held that the provisions of Rule 6(6) of CCR, 2004 overruled the provisions of and/or have an overriding effect over sub Rule (1), (2), (3) and (4) of Rule 6 of CCR., 2004 - it is admitted fact that the respondent had cleared the goods from their works/ factory under the bond for export and there is no dispute regarding the factum of export - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellant rightly took Cenvat Credit on input service.
2. Whether the appellant is entitled to a refund under Rule 5 of CCR read with Notification No. 27/2012.

Analysis:

Issue 1: Cenvat Credit on input service
The appellant, engaged in the manufacture of printed products, filed a refund claim for Cenvat Credit duty paid on input services used in the manufacture of excisable goods exported during a specific period. The Revenue contended that the appellant was not entitled to avail Cenvat Credit on inputs used in the manufacture of exempted products that attracted NIL rate of duty, whether sold domestically or exported. The Revenue issued a show cause notice (SCN) questioning the eligibility of the Cenvat Credit claimed by the appellant. The SCN was adjudicated, and the refund was rejected. However, the Commissioner (Appeals) observed that the appellant had exported goods under bond supervised by the Central Excise Authority, and thus, the Cenvat Credit availed by them was admissible. The Commissioner relied on Rule 6(6) of the CCR, which overrides the provisions of Rule 6(1) to Rule 6(4) in case of excisable goods cleared for export under bond. The Tribunal upheld the Commissioner's decision, emphasizing that the appellant's exports under bond were legal, and the benefit could not be denied based on the duty rate of the exported goods.

Issue 2: Refund under Rule 5 of CCR
The appellant had filed a refund claim under Rule 5 of CCR for the period in question. The Revenue disputed the refund claim, leading to the appeal and subsequent adjudication. The Commissioner (Appeals) found in favor of the appellant, highlighting the legality of the exports under bond and the applicability of Rule 6(6) of the CCR. The Tribunal, after considering the arguments, upheld the decision of the Commissioner (Appeals) and dismissed the Revenue's appeal, stating that there was no impropriety in the impugned order. The Tribunal emphasized the appellant's compliance with export procedures and the absence of any specific mistakes in the findings of the Commissioner (Appeals).

In conclusion, the Tribunal ruled in favor of the appellant, allowing the Cenvat Credit on input services and upholding the refund claim under Rule 5 of CCR, based on the legality of the exports under bond and the overriding effect of Rule 6(6) of the CCR. The Tribunal dismissed the Revenue's appeal, affirming the decision of the Commissioner (Appeals) and emphasizing the absence of impropriety in the impugned order.