2018 (8) TMI 1386 - AT - Central Excise

Refund of accumulated CENVAT Credit - Deemed Exports - Rule 5 of the Central Excise Rules, 2004 - Held that - In the case of Sirmaxo Chemicals Pvt. Ltd. vs. CCE, Thane-II 2016 (6) TMI 543 - CESTAT MUMBAI wherein it has been held that clearances made to SEZ unit is deemed export - As the clearances made to the SEZ are deemed units, in that circumstances, the facts of that case are applicable to the facts of the present case. Admittedly, due to the clearances made to SEZ unit, the cenvat credit accumulated in their cenvat credit account and remained unutlised. Therefore, under Rule 5 of the Cenvat Credit Rules, 2004 the appellant is entitled to claim refund of cenvat credit remained unutilised in their cenvat credit account. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Refund claim rejection under Rule 5 of Central Excise Rules, 2004.

Analysis:
The appellant, engaged in manufacturing electrical switches and appliances, filed appeals against the rejection of their refund claim under Rule 5 of the Central Excise Rules, 2004. The appellant availed cenvat credit on inputs, clearing goods in DTA, to SEZ units, and to Delhi Metro Rail Corporation (DMRC) without payment of duty. The cenvat credit accumulated in their account remained unutilized due to clearances to SEZ units, leading to the refund claim. Initially, the refund claims were approved but were later rejected by the Commissioner under Rule 5. The Tribunal considered the case of Sirmaxo Chemicals Pvt. Ltd. vs. CCE, Thane-II, where clearances to SEZ units were deemed exports. Applying this precedent, the Tribunal held that the appellant is entitled to claim a refund of the unutilized cenvat credit under Rule 5. The impugned order was found lacking in merit, and the original adjudicating authority's decision was affirmed, allowing the refund claim.

The judgment emphasizes the applicability of Rule 5 of the Cenvat Credit Rules, 2004 in cases where cenvat credit remains unutilized due to clearances to SEZ units, considering them as deemed exports. The Tribunal's decision was based on a previous case law precedent, ensuring consistency in the interpretation and application of the law regarding refund claims under similar circumstances. The ruling provides clarity on the eligibility of taxpayers to claim refunds in situations where cenvat credit accumulates due to duty exemptions on specific types of clearances, reinforcing the principle of equitable treatment and adherence to legal provisions.

Overall, the judgment highlights the importance of legal precedents, such as the Sirmaxo Chemicals case, in guiding decisions related to refund claims under the Central Excise Rules. By upholding the appellant's right to claim a refund of unutilized cenvat credit, the Tribunal ensures fairness and adherence to the legal framework governing such matters. The detailed analysis of the facts, legal provisions, and relevant case law demonstrates a thorough consideration of the issues at hand, resulting in a well-reasoned decision that upholds the appellant's entitlement to the refund in accordance with Rule 5 of the Cenvat Credit Rules, 2004.