2016 (8) TMI 385 - AT - Central Excise

Refund - Rule 5 of Cenvat Credit Rules 2004 read with Notification No. 4&5/2006-CE(NT) dated 14.3.200 - Export of goods partly under claim of rebate/partly under bond or UT-1 - Held that - in view of the clear provision of Rule 5 read with the Notification issued thereunder, the refund is admissible only on the goods exported under bond and to the extent of duty paid on the input which is used in the export goods. In the show cause notice as well as in the adjudication order it is clearly mentioned that 85% to 90% of the exports were made under bond/undertaking and under claim of rebate. However, the adjudicating authority as well as the Commissioner (Appeals) rejected the claim treating the entire export under claim of rebate, which is not correct. As regard the goods exported under bond, the appellant is entitled for the refund, however the refund related to the export made under claim of rebate is not admissible. - Appeal disposed of by way of remand

Summary

Issues:
Claim of refund under Rule 5 of Cenvat Credit Rules 2004 for goods exported partly under claim of rebate/partly under bond or UT-1. Admissibility of refund under Rule 5 based on export conditions. Interpretation of Notification No. 4/2006-CE(NT) and Notification No. 5/2006-CE(NT) for refund eligibility.

Issue 1: Claim of Refund under Rule 5 of Cenvat Credit Rules 2004:
The appellant claimed refund under Rule 5 of Cenvat Credit Rules 2004 for goods exported partly under claim of rebate/partly under bond or UT-1. The Commissioner (Appeals) rejected the appeal on the ground that the goods were not exported either under bond or UT-1, making the refund under Rule 5 inadmissible to the appellant.

Issue 2: Admissibility of Refund under Rule 5 based on Export Conditions:
The appellant argued that under Rule 5, accumulated Cenvat credit is refundable when the final product is exported, citing precedents like the judgment in Commissioner of Central Excise, Pune Vs. Emerson Innovation Center and M/s. Spentex Industries Ltd. Vs. Commissioner of Central Excise & Ors. The appellant contended that despite goods being cleared under rebate, there was an accumulation of credit, making it eligible for refund against the export of goods.

Issue 3: Interpretation of Notification No. 4/2006-CE(NT) and Notification No. 5/2006-CE(NT) for Refund Eligibility:
The Tribunal analyzed Notification No. 4/2006-CE(NT) and Notification No. 5/2006-CE(NT) to determine the eligibility for refund under Rule 5. It was noted that the refund is permissible only when goods are exported under bond or Letter of Undertaking, and the refund can be allowed only for duty paid on input used in export goods. The Tribunal found that while a portion of exports were made under bond, the entire claim was rejected incorrectly as being under rebate. Thus, the matter was remanded for re-quantification of the refund attributed to goods exported under bond.

In conclusion, the Tribunal remanded the matter to the original adjudicating authority for re-quantification of the refund related to goods exported under bond, directing a fresh de novo adjudication order. The appellant was instructed to provide necessary documents for quantification, and the adjudication process was to be completed within three months from the date of the order. The appeal was disposed of by way of remand for further assessment.