2010 (1) TMI 637 - AT - Central Excise

Refund claim - Accumulated Cenvat credit - Deemed exports - Appellants filed claim for refund of Rs. 4,17,531/- for accumulated Cenvat credit on the inputs used in the manufacture of excisable goods cleared to a 100% EOU - As per the decision in the case of Sanghi Textiles Limited and the decision in the case of S.V. Business Pvt. Ltd., Tribunal came to the conclusion that even in the case of deemed exports, refund is admissible. Limitation - In the absence of specific provisions related to refund of accumulated credit in Section 11B of Central Excise Act, 1944, the claim of the appellant that time limit is not applicable has to be upheld - Hence, the appeal filed by the Revenue is rejected and appeal filed by the appellant is allowed.

Summary

Issues:
Claim for refund of accumulated Cenvat credit on inputs used in manufacturing excisable goods for a 100% EOU, rejection of refund claim by Original Adjudicating Authority on grounds of limitation and admissibility, eligibility for refund by Commissioner (Appeals) with a portion held as time-barred, appeals by both Revenue and appellants against the Commissioner's order, interpretation of Rule 5 of Cenvat Credit Rules for refund eligibility in case of deemed exports, consideration of limitation aspect under Section 11B for refund claims.

Analysis:

The case involved a claim for refund of accumulated Cenvat credit by M/s. Rangdhara Polymers for inputs used in manufacturing excisable goods for a 100% EOU. The Original Adjudicating Authority rejected the refund claim citing limitation and admissibility issues. However, the Commissioner (Appeals) found the appellants eligible for a partial refund but held a portion of the claim as time-barred due to the delay in filing. This decision led to both Revenue and the appellants filing appeals against the Commissioner's order.

The main contention revolved around the interpretation of Rule 5 of Cenvat Credit Rules concerning the eligibility for refund in the case of deemed exports. The Revenue argued that deemed exports cannot be equated with actual exports, and therefore, the refund of accumulated credit is not applicable in such cases. They relied on specific Tribunal decisions to support their stance. On the other hand, the appellants, represented by a Chartered Accountant, cited other Tribunal decisions, including Sanghi Textiles Limited, to argue that refund is admissible even in the case of deemed exports. The Tribunal analyzed these precedents and concluded that the appellants are eligible for the refund based on the decisions in Sanghi Textiles and Shilpa Copper Wire Industries.

Regarding the limitation aspect, the Tribunal considered the applicability of Section 11B in the case of refund claims for accumulated credit under Rule 5 of Cenvat Credit Rules, 2004. The learned Chartered Accountant referenced the decision in the case of Anjani Synthetics Limited to support the argument that the time limit does not apply to refund claims of accumulated credit. The Tribunal agreed with this interpretation, setting aside the rejection of the refund claim based on limitation. Consequently, the appeal filed by Revenue was rejected, and the appeal filed by the appellants was allowed. The applications for stay and early hearing were also disposed of in the judgment.