2017 (5) TMI 501 - AT - Central Excise

Refund claim - denial on the ground that the appellant was required to utilize the accumulated credit and has observed that adjustment clause is mandatory - Held that - refund being substantive right, Central Excise officer has no jurisdiction to curtail it and find reasons for non-adjustment. The refund of accumulated Cenvat Credit cannot be denied to the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 05/2006-CE (NT); Interpretation of conditions for refund eligibility; Applicability of conditions for monthly vs. quarterly refund claims.

Analysis:
The appellant, a manufacturer of Custom Built Switchgear Panels, filed refund claims under Rule 5 of the Cenvat Credit Rules, 2004 due to accumulated Cenvat Credit. The claims were based on the grounds of being unable to utilize the credit despite supplying goods to SEZ, EOU, and DMRC Ltd. The Adjudicating Authority initially sanctioned the claims, but the Department appealed. The Ld. Commissioner (Appeals) set aside the order, leading to the appellant's appeal to the Tribunal.

The appellant argued that the condition of average clearances of final product/output services exceeding 50% applies when claiming monthly refunds, not quarterly, as misinterpreted by the Ld. Commissioner (Appeals). The appellant cited relevant case laws to support their position, emphasizing their right to choose the method of exporting goods. The Ld. AR for the Revenue supported the findings of the Ld. Commissioner (Appeals).

The Tribunal found errors in the Ld. Commissioner (Appeals)'s decision, noting that the appellant's inability to utilize the credit was not properly assessed. The Tribunal emphasized the appellant's right to claim a refund under Rule 5, stating that the Central Excise officer cannot curtail this right. Citing precedents, the Tribunal highlighted that the condition of more than 50% clearance of final products is an exception for monthly claimants, not quarterly ones. Consequently, the Tribunal set aside the Ld. Commissioner (Appeals)'s order, ruling in favor of the appellant.

In conclusion, the Tribunal found the Ld. Commissioner (Appeals)'s order lacking merit and allowed the appellant's appeal, affirming their right to the refund of accumulated Cenvat Credit.