2022 (10) TMI 139 - AT - Central Excise

Refund of accumulated credit - assessee has claimed drawback in terms of Customs and Central Excise Duties and Service Tax Drawback Rules, 1995 - rejection of refund claim also on the ground of time limitation - HELD THAT - The issue with regard to the admissibility of refund, in case where drawback of only customs portion have been availed by the assessee, has already been decided in favour of assessee by the Tribunal in the case of COMMISSIONER OF CENTRAL TAX, GUNTUR-GST VERSUS M/S CHOLAYIL PVT LTD. 2019 (9) TMI 1106 - CESTAT HYDERABAD and COMMISSIONER OF CENTRAL EXCISE, KANPUR VERSUS M/S SABHARWALS MEDICALS PVT. LTD. 2017 (8) TMI 697 - CESTAT ALLAHABAD as relied by the Ld. Advocate and the issue is no longer res integra. It was held that In this case, since the drawback scheme itself has provided for a single rate of drawback, which, according to the clarification in the Notification 110/2015-CUS dated 16.11.2015, means only customs duty drawback, it is impossible that the respondents could have availed drawback of central excise duty. Therefore, there is no prohibition in refund of Cenvat credit on inputs or input services in respect of the goods which are exported. In view thereof, there is no reason to deny the refund when the Appellant has availed drawback of only the customs duty portion and not of excise duty which facts are not in dispute. Time limitation - HELD THAT - Since no observation has been made by the Ld. Commissioner (Appeals), it would be fit to remand the matter to the Ld. Commissioner (Appeals) to decide the issue as to whether the refund claimed by the Appellant is within time. He would also examine other issues with regard to the correctness of the discrepancies as observed by Lower Authority on the documentation part. The Ld. Commissioner (Appeals) is therefore directed to examine the aforesaid issues and decide the entitlement of refund except the issue of drawback which stands decided in favour of the Appellant as discussed above. Appeal allowed by way of remand.

Summary

Issues:
Appeal against denial of refund claim under Rule 5 of CENVAT Credit Rules, 2004 for exports made during a specific period. Discrepancies in refund claim, time limitation, entitlement to refund due to availing drawback of customs duty only.

Analysis:
The appeal before the Appellate Tribunal CESTAT Kolkata was filed by M/s. Corporate Ispat Alloys Limited challenging the rejection of their refund claim under Rule 5 of the CENVAT Credit Rules, 2004 for exports made between July 2012 to September 2012. The lower authorities had denied the refund claim, citing discrepancies and time limitation issues. The Order-in-Appeal dated 19.03.2015 upheld the denial of the refund claim as per the Order-in-Original dated 14.08.2014 by the Assistant Commissioner, Central Excise, Durgapur.

During the hearing, the Appellant's Advocate argued that the rejection of the refund claim was solely based on the Appellant availing drawback of customs duty, not excise duty. Citing precedents, the Advocate contended that the Appellant was legally eligible to claim the refund under Rule 5. The Authorized Representative for the Revenue supported the lower authorities' findings and requested the appeal's dismissal.

The Tribunal noted that the lower authorities did not address the time limitation aspect in their decision. It was observed that the issue of admissibility of refund when only customs duty drawback was claimed had been previously decided in favor of the assessee in relevant cases. Therefore, the Tribunal found no reason to deny the refund in this case, especially when the excise duty drawback was not availed by the Appellant.

Regarding the time bar issue, since the lower authority did not provide any observation, the matter was remanded back to the Commissioner (Appeals) to determine the timeliness of the refund claim and review other discrepancies observed in the documentation. The Commissioner was directed to decide the entitlement to refund, excluding the drawback issue, which had been resolved in favor of the Appellant based on previous judgments.

Given that the matter pertained to the past period of 2012, the Commissioner was instructed to expedite the decision-making process. The Appellant was urged to cooperate and not unnecessarily delay proceedings. The Tribunal allowed the appeal by remanding the case for further examination by the Commissioner (Appeals).