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2014 (11) TMI 577 - AT - Central ExciseDenial of refund claim - accumulation of credit - duty free imports and double benefits - manufacture of Polyester Staple Fibre ( PSF ) - Export and DTA clearance - Held that - Till 01.04.1997 the Export Policy provisions were different and duty free imported materials against Advance Licence were freely transferable after fulfilment of export obligation, where the Modvat/Proforma credit facility or excise relief under Rule 191B of CER 1944, were availed and hence could have lead to possible double benefit. But after 1.4.1997 Foreign Trade Policy (FTP), the position have been changed and going through the provisions relevant for the impugned period it is clear that it would not be possible to get double benefit. Refund under Rule 5 of CENVAT Credit Rules, 2004 on export of the finished goods, the credit is accumulated and the same cannot be utilised otherwise. We also find that as per the provisions of Foreign Trade Policy post 1997, no double benefit is available. Appellant have not availed any double benefit in the light of the decision in 2009 (5) TMI 498 - CESTAT, BANGALORE which has been upheld by Karnataka High Court 2012 (7) TMI 569 - KARNATAKA HIGH COURT and as per the Foreign Trade Policy 2009-14 and are entitled to claim refund of Cenvat credit accumulated unutilised on export of the finished goods which appellant was not able to utilise otherwise under Rule 5 of CENVAT Credit Rules, 2004 - Decided in favour of assessee.
Issues Involved:
1. Refund claim of CENVAT credit. 2. Double benefits allegation. 3. Utilization of duty-free imported inputs. 4. Compliance with Foreign Trade Policy (FTP) 2009-14. 5. Requirement of one-to-one correlation between inputs and exported goods. Detailed Analysis: 1. Refund Claim of CENVAT Credit: The appellants, manufacturers of Polyester Staple Fibre (PSF), filed for a refund of the credit of duty paid on raw materials PTA and MEG used in the manufacture of PSF exported during July 2009 to December 2009 under Rule 5 of CENVAT Credit Rules, 2004. The Adjudicating Authority sanctioned the refund claims, but the Commissioner (Appeals) set aside these orders, leading to the present appeal. 2. Double Benefits Allegation: The Revenue argued that the appellants could not claim a refund as they imported raw materials duty-free under the Advance Authorization Scheme, which would result in double benefits. However, the appellants contended that the duty-free imported inputs were not used in the manufacture of exported PSF and that they had only used duty-paid inputs for the exported products, substantiated by documentary evidence. 3. Utilization of Duty-Free Imported Inputs: The appellants demonstrated that duty-free imported inputs were used for domestic production, and the duty-paid inputs were used for exported goods. The Tribunal noted that the detailed chart/statement produced by the appellants was not rejected by the Revenue with any supporting evidence, making it a reliable document. 4. Compliance with Foreign Trade Policy (FTP) 2009-14: The Tribunal cited the FTP 2009-14, which clarified that it was not possible to get double benefits post-1997. The Tribunal also referred to several judgments, including U.K. Paints (India), Ispat Industries Ltd., and Bhilwara Spinners Ltd., which supported the appellants' claim that the refund of accumulated CENVAT credit was admissible even if exports were made under schemes like DEEC/DEPB/Advance Licence, as long as no double benefit was availed. 5. Requirement of One-to-One Correlation: The Tribunal held that there was no requirement for a one-to-one correlation between inputs and exported goods for claiming a refund of accumulated credit under Rule 5 of CENVAT Credit Rules, 2004. This was supported by judgments such as Motherson Sumi Electric Wire, which was upheld by the Karnataka High Court, and Capiq Engineering Pvt Ltd. Conclusion: The Tribunal concluded that the appellants had not availed any double benefits and were entitled to claim a refund of the accumulated unutilized CENVAT credit on the export of finished goods under Rule 5 of CENVAT Credit Rules, 2004. The impugned orders were set aside, and the appeals were allowed with consequential relief.
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