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2023 (11) TMI 676 - AT - Central Excise100% EOU - Sanction of refund by cash - It is alleged that the appellant is not eligible for the credit availed on the raw materials used for manufacture of finished goods, which were subsequently exported - HELD THAT - The very same issue has been considered by the Department in the Order-in-Original where it was held that the credit of duty paid on the inputs under Notification No.22/2023 CE dated 52/2003 CUS (to the extent of CVD) indigenously procured and imported respectively lying in stock at the time of de-bonding, availed by M/s.Kadri Wovens amounting to Rs.55,64,436/- is allowable under Rule 3 (1) (i), (vii) and (via) of CCR. The appellant is eligible for the credit - since the notice proposing to recover the erroneously sanctioned refund has been dropped by the department nothing survives. The appellant is therefore eligible for the refund claim - Appeal allowed.
Issues involved: Appeal against the rejection of refund claim for duty paid on raw materials used in exported final products.
Summary: The appellant, a 100% EOU engaged in manufacturing, imported goods duty-free under Notification No.52/2003-Cus. Upon exiting EOU status, they paid duty on imported goods and finished products. A refund claim for duty paid on raw materials used in exported final products was partly rejected. The department appealed against the refund sanction by cash, arguing the credit was ineligible. The Commissioner (Appeals) upheld the department's contention. The appellant appealed to the Tribunal, arguing against the department's claim that the credit was ineligible. The Tribunal noted that the department previously dropped a show cause notice proposing to recover the refund. Referring to a previous case, the Tribunal found that the appellant was eligible for the credit. As the department dropped the recovery proposal, the appellant was deemed eligible for the refund claim. The impugned order was set aside, and the appeal was allowed with any consequential relief. Conclusion: The Tribunal ruled in favor of the appellant, allowing the refund claim for duty paid on raw materials used in exported final products, as the department had accepted the appellant's eligibility for the credit.
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