2024 (5) TMI 124 - AT - Central Excise

Refund of unutilized input credit - inputs and/or input services used in the export of goods or services as provided under Rule 5 of CENVAT Credit Rules, 2004 read that Notification No. 5/2006-C.E. (N.T) dated 14.03.2006 - period January, 2009 to March, 2009 - HELD THAT - In view of the detailed examination of the all five conditions of Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 5/2006-C.E. (N.T) dated 14.03.2006, in the context of factual matrix of the case, it is found that the appellant is eligible for refund of Cenvat credit of inputs availed during the quarter January, 2009 to March, 2009 after adjusting/deducting for the Cenvat credit utilized, thereby arriving at the correct amount of Cenvat credit on inputs which could not be utilized for payment of tax or duty as Rs.3,44,804/- (Rs.23,32,780/- minus Rs.49,87,976/-). Further, the amount of Cenvat credit of input services which could not be utilized and by restricting the same to the extent of ratio of export turnover to the total turnover as per the prescribed formula, the eligible Cenvat credit for refund is arrived at Rs.77,754/-. Thus, the total eligible amount of Cenvat credit refundable to the appellants is worked out as Rs.4,22,558/-, out of the total refund claim filed for an amount of Rs.13,37,072/-. There are no merits in the impugned order dated 21.08.2018, insofar as the adjudged demands were confirmed on the appellant by the learned Commissioner (Appeals), upholding the order of the original authority and by rejecting the appeal filed by the appellant. The adjudged demands confirmed on the appellants being ineligible refund of Cenvat credit and rejection of eligible refunds, in the impugned order dated 21.08.2018 is liable to be set aside. The eligible refund of Cenvat Credit in terms of Rule 5 of CENVAT Credit Rules, 2004 read with Notification No. 5/2006-C.E. (N.T) dated 14.03.2006 is re-determined as Rs.4,22,558/- - the impugned order is set aside - appeal allowed.

Summary

Issues Involved:
1. Eligibility for Refund of CENVAT Credit
2. Mis-declaration and Suppression of Facts
3. Compliance with Rule 5 of CENVAT Credit Rules, 2004 and Notification No. 5/2006-CE(NT)

Summary:

1. Eligibility for Refund of CENVAT Credit:
The appellant, M/s Monomer Chemical Industries Private Limited, engaged in the manufacture of Organic Chemicals, filed a refund claim dated 29.12.2009 for unutilized input credit of Rs.13,37,072/- for the period January to March 2009. The jurisdictional Assistant Commissioner sanctioned Rs.4,22,558/- out of the total claim. The Department appealed, arguing that the original authority did not address all conditions under Rule 5 of CENVAT Credit Rules, 2004. The Commissioner (Appeals) rejected the refund claim, leading to the appellant's appeal before the Tribunal. The Tribunal remanded the case for re-adjudication, and the Deputy Commissioner sanctioned Rs.77,754/- and demanded Rs.3,44,804/- erroneously refunded. The Commissioner (Appeals) upheld this order, prompting the appellant's current appeal.

2. Mis-declaration and Suppression of Facts:
The original adjudicating authority found that the appellant mis-declared that no separate claim for rebate or drawback was made. The appellant exported goods under UT-1 and claimed drawback, which was suppressed while filing the refund claim. The appellant failed to provide details of inputs utilized and credit involved, leading to the rejection of the refund claim.

3. Compliance with Rule 5 of CENVAT Credit Rules, 2004 and Notification No. 5/2006-CE(NT):
The Tribunal examined the conditions under Rule 5 and Notification No. 5/2006-CE(NT). The appellant exported goods without payment of duty under bond/LUT, fulfilling the condition for refund eligibility. The formula prescribed in the rule was applied correctly, and the refund was restricted to the extent of export turnover. The appellant provided the required documents, and the original authority's calculation of eligible CENVAT credit was found to be correct.

Conclusion:
The Tribunal found the appellant eligible for a refund of Rs.4,22,558/-, setting aside the impugned order dated 21.08.2018, which had confirmed the adjudged demands and rejected the appeal. The appeal was allowed in favor of the appellant.

Order Pronounced:
(Order pronounced in open court on 22.04.2024)