2013 (11) TMI 1122 - AT - Central Excise

Refund claim on Inputs Peanut butter manufactured Claim u/s 11B of Central Excise Act, 1944 r.w. Rule 5 of the Cenvat Credit Rules, 2004 Held that - Cenvat credit Rules are not applicable to the appellant s case and no refund under Rule 5 of Cenvat Credit Rules, 2004 is admissible because no credit accumulation is possible in view of the provisions of Rule 6(1) of the Cenvat Credit Rules - exporters should be given a zero rated export environment as per Central Government Export Policies and for every situation there is a procedure prescribed. There is procedure in place for claiming refund of duty paid on inputs which are used in the manufacture of fully exempted export products subject to certain prescribed procedures of fixing input-output norms - appellant has not followed the procedures thus, he cannot claim the benefit of Rule 5 of the Cenvat Credit Rule - the appellant is claiming refund of duty paid on inputs which are not manufactured by them - Appellant has got no locus standi to seek refund of duty paid on input under Section 11B of the Central Excise Rules, 1944, when he has not paid such a duty Decided against Assessee.

Summary

Issues involved:
- Claim for refund of duty paid on inputs used in the manufacture of Peanut Butter subsequently exported under Section 11B of the Central Excise Act, 1944 read with Rule 5 of the Cenvat Credit Rules, 2004.

Analysis:
The appellant, engaged in manufacturing Peanut Butter fully exempted from Central Excise duty, filed refund claims for duty paid on inputs used in the exported product. The Original Adjudicating Authority rejected the claims, leading to the current appeals. The appellant contended that duty on inputs for exported goods should be refunded for zero-rated exports, citing a previous CESTAT judgment. The Respondent argued against refund, stating that no credit is admissible for fully exempted products under Rule 6(1) of the Cenvat Credit Rules. They also highlighted the need for periodic filing of Rule-5 Cenvat Credit refunds, which the appellant failed to comply with.

Upon thorough consideration, the Tribunal observed that as per Rule 6(1) of the Cenvat Credit Rules, no credit is allowed for inputs used in manufacturing exempted goods like Peanut Butter. The appellant's product fell under this category, and since the exempted goods were not exported under bond or a letter of undertaking, Rule 5 of the Cenvat Credit Rules did not apply, thus rendering the refund inadmissible. The Tribunal differentiated the current case from the appellant's previous successful refund claim, emphasizing the specific circumstances and categories under which refunds are granted.

Regarding the applicability of Section 11B of the Central Excise Act, it was noted that the appellant sought a refund for duty paid on inputs not manufactured by them, making them ineligible to claim under Section 11B. The Tribunal concluded that the appellant lacked standing to seek such a refund under the mentioned section, ultimately rejecting the appeals based on the legal provisions and the appellant's failure to adhere to the prescribed procedures for claiming refunds on duty-paid inputs used in the manufacture of fully exempted export products.

In the operative portion of the order pronounced in Court, the appeals filed by the appellant were rejected based on the detailed analysis and legal interpretations provided by the Tribunal.