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2020 (12) TMI 431 - AT - Central ExciseRefund of CENVAT Credit - Restoration / re-Credit if amount is not refunded - export goods or not - goods were cleared by the appellant, not for physical exports, but were cleared by them to their sister concern, who is an 100% Export Oriented Unit - Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No 27/2012-CE (NT) dated 18.06.2012 - HELD THAT - Tribunal in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE-III VERSUS TRIMURTI PLAST CONTAINERS PVT LTD 2018 (3) TMI 325 - CESTAT MUMBAI has after taking the note of Explanation (1A) inserted in Rule 5 of CENVAT Credit Rules, 2004 vide notification No 06/2015-CE(NT) dated 01.03.2015, have held that refund in terms of the Rule 5 of CENVAT Credit Rules, 2004 is admissible only in respect of the goods cleared for physical exports by the applicant, and is not admissible in respect of the goods that are cleared as deemed exports. In the present case admittedly the goods were cleared by the appellant, not for physical exports, but were cleared by them to their sister concern, who is an 100% Export Oriented Unit. Since these goods were not cleared for physical exports by the applicant, in view of the definition of export goods , as per explanation (1A) inserted in Rule 5 of CENVAT Credit Rules, 2004, they do not qualify to be included in the export turnover of the appellant for the purpose of computing the refund under rule 5. It is requirement in law for claiming the refund under Rule 5, the claimant has to make a debit of the amount claimed as refund from the CENVAT Account. In case the refund is allowed in his favour the amount of debited from the CENVAT Account gets adjusted against the refund paid in cash, and in case the refund is rejected or even rejected in part, then the amount of refund which is rejected either in toto or in part, which was earlier debited from the CENVAT Account gets restored in the CENVAT Account of the claimant. Appeal disposed off.
Issues:
Challenge to rejection of refund claim by Commissioner (Appeals) against Order-in-Original, Interpretation of Rule 5 of CENVAT Credit Rules, 2004, Applicability of Explanation (1A) inserted in Rule 5, Consideration of goods cleared for physical exports vs. deemed exports, Restoration of debited amount from CENVAT Account upon rejection of refund claim. Analysis: Issue 1: Challenge to rejection of refund claim The appeal was filed challenging the Commissioner (Appeals) order rejecting the appellant's refund claim against the Order-in-Original. The Commissioner rejected the appeal concerning refund claims for specific quarters, citing the rejection of refund claims for amounts filed by the appellant. Issue 2: Interpretation of Rule 5 of CENVAT Credit Rules, 2004 The Assistant Commissioner rejected the refund claims based on the Explanation (1A) inserted in Rule 5 by a specific notification. The Tribunal referred to previous decisions, emphasizing that refunds under Rule 5 are only admissible for goods cleared for physical exports, not deemed exports. In this case, the goods were not cleared for physical exports but to a sister concern, rendering them ineligible for refund under the rule. Issue 3: Applicability of Explanation (1A) in Rule 5 The Tribunal highlighted that goods cleared by the appellant to their sister concern, not for physical exports, do not qualify as "export goods" under the defined terms, as per the Explanation (1A) in Rule 5. The decisions cited affirmed that refunds are only applicable to goods cleared for physical exports by the applicant. Issue 4: Restoration of debited amount from CENVAT Account The appellant requested restoration of the debited amount from their CENVAT Account upon rejection of the refund claim. The Authorized Representative opposed this, citing legal precedents. However, the Tribunal ruled that restoration of the debited amount is a direct consequence of refund rejection, not a new ground, as it is a requirement under Rule 5. The restoration is not considered a new plea and is distinct from the arguments presented by the Authorized Representative. Conclusion: The appeal was disposed of based on the interpretation of Rule 5 and the inapplicability of the refund for goods not cleared for physical exports. The restoration of the debited amount from the CENVAT Account upon rejection of the refund claim was deemed necessary and not a new ground. The Tribunal upheld the rejection of the refund claim based on established legal principles and precedents. (Order pronounced in the open court)
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