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2013 (11) TMI 1115 - AT - Central ExciseRefund claim rejected Revenue was of the view that non-availability of cenvat credit would not result in refund - the Appellant had claimed that they did not avail the CENVAT Credit on the SAD amount but, they could not substantiate the said claim through evidences Held that - Merely because the Appellant did not claim the CENVAT Credit on the SAD amount and chose to pay the duty by debiting their PLA Account, they would not be entitled to refund of CENVAT Credit on SAD, since refund of credit erroneously paid is a different issue, then claiming refund of the CENVAT Credit not availed, even if eligible during the relevant period - the question of refund would arise only when the duty has been paid - the Appellant are seeking refund of CENVAT Credit of SAD against which no credit was availed by him Decided against assessee.
Issues:
1. Claim for refund of CENVAT Credit on Special Additional Duty (SAD) paid on imported timber logs during 2006-07. 2. Applicability of Rule 5 of CENVAT Credit Rules, 2004 for allowing cash refund of non-availed CENVAT Credit. 3. Interpretation of whether non-availment of CENVAT Credit during a period entitles an assessee to claim refund. Analysis: 1. The appeal was filed against the Order-in-Appeal rejecting the refund claim of Rs.6,14,424 for non-availment of CENVAT Credit on SAD paid on imported timber logs during 2006-07. The Appellant argued that since they did not avail the credit, they should be refunded the amount paid from their PLA account. However, the Department contended that there was no bar on availing the credit, and hence, the claim was not admissible. The Tribunal held that the Appellant's failure to claim the credit does not entitle them to a refund, as refund of erroneously paid duty is distinct from claiming refund of unavailed CENVAT Credit. 2. The Appellant's consultant cited precedents to support the claim for refund, but the Tribunal found them inapplicable as they did not address the specific issue of admissibility of refund for unavailed CENVAT Credit. The Tribunal emphasized that the question of refund arises only when duty has been paid, and in this case, the Appellant sought refund of CENVAT Credit not utilized, which is a different scenario. The Tribunal concluded that the Appellant's claim lacked merit, and therefore, dismissed the appeal. 3. The Revenue argued that without any prohibition from the Department, the Appellant's voluntary non-availment of CENVAT Credit does not qualify for a refund, except under circumstances specified in Rule 5 of CENVAT Credit Rules, 2004. The lower authorities rightly rejected the claim based on this premise. The Tribunal concurred with the Revenue's stance, emphasizing that the absence of any directive preventing the Appellant from availing the credit meant that the claim for refund was not tenable under the prevailing regulations. In summary, the Tribunal upheld the lower authorities' decision to reject the refund claim, ruling that the Appellant's voluntary non-availment of CENVAT Credit on SAD did not warrant a refund. The judgment clarified the distinction between refund of erroneously paid duty and claiming refund for unutilized credit, ultimately dismissing the appeal due to the lack of merit in the Appellant's argument.
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