2017 (3) TMI 849 - AT - Central Excise

Refund claim - Rule 5 of CCR, 2004 - N/N. 27/2012-CE (NT) dt.18.6.2012 - CENVAT credit lying unutilised due to closure of factory - Held that - unutilized credit lying in the books of account on account of closure of factory should not be denied only on account of that they did not meet other procedural requirements of Rule 5 of the Rules read with N/N. 27/2012 - matter remanded back to the original authority only for the limited purpose of ascertaining the correct amount of eligible accumulated credit that remained unutilized on account of such closure - appeal allowed by way of remand.

Summary

Issues:
Denial of refund claim under Rule 5 of Cenvat Credit Rules, 2004 and Notification No.27/2012-CE (NT) on the ground of late filing after goods export, maintainability of writ petition, eligibility of refund for accumulated credit due to factory closure.

Analysis:
The appeal pertains to the denial of a refund claim filed for an amount under Rule 5 of Cenvat Credit Rules, 2004 and Notification No.27/2012-CE (NT) due to unutilized credit. The original authority and Commissioner (Appeals) disallowed the claim citing late filing after goods export. The matter was taken to the High Court, which noted the closure of manufacturing activities by the petitioner. The High Court observed that the claim for refund was not adequately presented before the lower authorities. The appellant argued that the claim was solely for accumulated credit due to the closure of the factory, not related to exports. Reference was made to judgments supporting the admissibility of refund for closure-related credit under Rule 5 of the Rules.

During the hearing, the appellant's advocate emphasized that the factory closure led to the filing of the refund claim for unutilized credit. The advocate pointed out that the claim was not about credit from exports and cited relevant legal precedents supporting the admissibility of such claims. The Revenue's representative opposed the appeal, highlighting the late filing concerning the export period. The appellate authority noted the appellant's admission of the claim being related to factory closure, not adequately raised before lower authorities. The authority found merit in the appellant's argument that closure-related credit should not be denied based on procedural requirements, as supported by legal judgments.

The appellate authority allowed the appeal, remanding the matter to ascertain the correct amount of eligible accumulated credit due to factory closure. The decision was based on the understanding that closure-related credit should not be denied solely due to procedural lapses. The authority referenced legal precedents supporting the admissibility of such claims under Rule 5 of the Rules. The judgment emphasized the distinction between claims related to exports and those arising from factory closure, supporting the appellant's position on the eligibility of the refund claim.

In conclusion, the appellate tribunal allowed the appeal, directing a remand to determine the eligible accumulated credit due to the factory closure. The decision was based on the understanding that closure-related credit should not be denied solely due to procedural lapses, as supported by legal precedents. The judgment highlighted the importance of distinguishing between claims related to exports and those arising from factory closure in determining the admissibility of refund claims.