2009 (11) TMI 274 - AT - Central Excise

Refund of unutilized Cenvat/Modvat Credit- the appellants have filed a claim for refund of cenvat credit of Rs. 14, 77, 508/- on the ground that they have unutilized cenvat credit on inputs used in the manufacture of electric cars cleared for export under bond during the period from 13-1-2005 to 16-9-2005 under Rule 5 of Cenvat Credit Rules 2004 read with Notification No. 11/2002-C.E. (N.T.) dated 1-3-2002 as amended. The claim was rejected by Adjudicating Authority by an Order-in-Original as the same was not found in accordance with the provisions of rule 5 of Cenvat Credit Rules 2004 read with Notification No. 11/2002-C.E. (N.T.) dated 1-3-2002 as amended. Aggrieved by such order of the Adjudicating Authority appellant preferred an appeal to the Commissioner (Appeals). The learned Commissioner (Appeals) held that the Order-in-Original was correct and coming to such a conclusion he upheld the said order. Hence this appeal. Held that- since there was no duty of additional excise duty payable on the final products the refund could not have been claimed on the inputs as the final product does not suffer additional duty of excise. The facts of the case before me are totally different then the issue which was before the Tribunal in the case of CCE Rohtak v. Indo Dane Textile Industries. The argument sought to be made by the learned Consultant will not carry his case further. Accordingly I find that the impugned order is correct and legal and does not suffer from any infirmity. The appeal filed by the appellant is rejected.

Summary

Issues:
Claim for refund of unutilized cenvat credit on inputs for electric cars cleared for export under bond - Rejection of claim by Adjudicating Authority - Appeal to Commissioner (Appeals) - Interpretation of Rule 5 of Cenvat Credit Rules, 2004 - Provisions of Rule 5 regarding refund of Cenvat credit - Applicability of Rule 5 to the refund claim - Claim of rebate of Central Excise duty on exported final products - Interpretation of proviso to Rule 5 - Comparison with precedent case law - Final decision on the appeal.

Analysis:
The case involved a claim for refund of cenvat credit on inputs used in manufacturing electric cars cleared for export under bond. The Adjudicating Authority rejected the claim, leading to an appeal to the Commissioner (Appeals). The appellant argued that the rejection was contrary to the law and lacked merit, citing the provisions of Rule 5 of Cenvat Credit Rules, 2004. The appellant contended that the rule allows utilizing cenvat credit on inputs used in final products cleared for export or used in intermediate products cleared for export. The appellant highlighted the accumulation of credit due to duty differentials and the necessity of the refund claim.

The Respondent, however, argued that Rule 5 clearly states that the refund of cenvat credit is only allowed if no drawback or rebate of duty has been claimed under the Central Excise Rules, 2002. In this case, the appellant had claimed rebate on the Central Excise duty paid on exported final products. The Tribunal considered both arguments and reviewed the provisions of Rule 5. It noted that the appellant had cleared goods for export on payment of duty without a bond or letter of undertaking. The Tribunal analyzed the rule's language and the proviso, emphasizing the conditions for refund eligibility.

Upon detailed examination, the Tribunal concluded that the appellant was not eligible for the refund of unutilized cenvat credit as the credit had already been utilized for duty payments on final products cleared for export, for which rebate claims were made and sanctioned. The Tribunal differentiated the case from a precedent cited by the appellant, emphasizing the specific circumstances and legal interpretations involved. Ultimately, the Tribunal upheld the impugned order, finding it legally sound and free from defects, and rejected the appeal filed by the appellant.

In the final judgment pronounced on 13-11-2009, the Tribunal provided a comprehensive analysis of the issues raised, the interpretations of Rule 5, and the applicability of the proviso regarding refund eligibility. The decision was based on a thorough review of the facts, legal arguments, and relevant precedents, ensuring a detailed and reasoned outcome.