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2021 (8) TMI 701 - AT - Central ExciseRefund of cenvat credit in proportion of export turnover - Additional Excise Duty (Textile Textile Articles) AED (T TA) - Rule 5 of CCR - HELD THAT - There is no restrictions of amount of refund of unutilised credit under Rule 5 of CCR. In view of the clear mandate of law, providing for refund where for any reason, such adjustment is not possible - Further, CBEC has clarified vide their circulars and instructions dated 12.03.2003 and 22.03.2007, which has also been relied upon by this Tribunal in its earlier Final Order dated 2.6.2016, 2016 (6) TMI 353 - CESTAT NEW DELHI in the same very matter, in the earlier round, where it was held that The matter was remanded to the Adjudicating Authority for the only purpose of arithmetic calculation - Appeal allowed by way of remand.
Issues Involved:
1. Whether the refund of Cenvat credit of AED (T&TA) under Rule 5 of CCR was rightly allowed in proportion to export turnover. 2. Whether the refund claim of ?22,54,910/- should be reduced to ?13,17,148/- due to the proportionate calculation based on export turnover. Issue-wise Detailed Analysis: 1. Proportionate Refund of Cenvat Credit of AED (T&TA) under Rule 5 of CCR: The appellant, M/s. RSWM Limited, was availing Cenvat credit on Polyester/Viscose/Acrylic Fibres used in the manufacture of their final products. The inputs and final products were chargeable to Additional Excise Duty (Textile & Textile Articles) until 08.07.2004, after which they were exempted. On the exemption date, the appellant had a balance of AED (T&TA) of ?27,25,433/-. The appellant claimed a refund of the unutilized balance of ?26,03,030/- of AED (T&TA) under Rule 5 of Cenvat Credit Rules, 2004, as they were not in a position to utilize the said credit due to the exemption. The Original Authority initially sanctioned a refund of ?22,54,910/- but this was reviewed and reduced by the Commissioner of Central Excise, Jodhpur, to ?13,70,148/- based on the proportionate calculation of export turnover. 2. Reduction of Refund Claim from ?22,54,910/- to ?13,17,148/-: The Commissioner’s review was based on the fact that the refund should only cover the AED (T&TA) re-entered in the credit account in November 2010 and used in the manufacture of goods exported. The Commissioner found that inputs involving AED of ?8,84,762/- were used in the manufacture of final products cleared domestically and not exported. Therefore, the refund claim was reduced proportionately. The appellant argued that Rule 5 of CCR and CBEC's instructions dated 22.03.2007 and 12.03.2003 clarified that unutilized intermediate credit of AED (T&TA) could be claimed as a refund under Rule 5 of CCR. They contended that there is no restriction on the amount of refund of unutilized credit and that the rule does not provide for proportionate calculation based on export turnover. The Tribunal held that there are no restrictions on the amount of refund of unutilized credit under Rule 5 of CCR. The Tribunal also noted that the issue had attained finality in the earlier round of litigation and that the matter was remanded only for arithmetic calculation. The Tribunal found the impugned order-in-appeal to be bad and restored the original order, allowing the full refund claim of ?22,54,910/-. Conclusion: The Tribunal concluded that the appellant is entitled to the full refund of ?22,54,910/- as there are no restrictions on the amount of refund of unutilized credit under Rule 5 of CCR. The reduction of the refund claim by the Commissioner was set aside, and the original order was restored. The appellant is entitled to consequential benefits in accordance with the law.
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