2017 (9) TMI 691 - AT - Central Excise

Refund of unutilised CENVAT credit - Rule 5 of CCR, 2004 read with N/N. 4/2006-CE(NT) and 5/2006-CE(NT) dt. 14.3.2006 - denial on the ground that refund u/r 5 of accumulated cenvat credit is admissible only from the final product which are exported under bond without payment of duty - the appellant exported on payment of duty under claim for rebate - Held that - There is a specific condition under notification issued and Rule 5 that refund of accumulated credit shall not be allowed in case the goods are cleared under claim of rebate or drawback - rejection justified - appeal dismissed - decided against appellant.

Summary

Issues:
Refund claim of accumulated Cenvat Credit for exported goods cleared on payment of duty under claim for rebate - Interpretation of Rule 5 of Cenvat Credit Rules, 2004 and relevant notifications.

Analysis:
The case involved the appellants engaged in manufacturing excisable goods seeking a refund of &8377; 37,77,192/- for unutilized Cenvat Credit against export goods cleared on payment of duty under claim for rebate. The adjudicating authority rejected the refund claim citing that under Rule 5, refund of accumulated Cenvat Credit is admissible only for goods exported under bond without payment of duty, not for goods exported on payment of duty under claim for rebate. The Commissioner (Appeals) upheld the rejection, leading to the appeal before the Member (Judicial).

The appellant argued that the accumulation of credit was due to duty differences on inputs and final products, making the accumulated credit refundable under Rule 5. They relied on a previous Tribunal judgment. The Revenue contended that refund under Rule 5 requires the final product to be exported under bond, not on payment of duty, and cannot be claimed if rebate of duty or drawback is sought.

After considering the arguments and records, the Member (Judicial) found that the refund claim was for accumulated credit against goods cleared on payment of duty under claim for rebate, not under bond for export. The Rule and relevant notifications clearly state that refund is not allowed for goods cleared under claim of rebate or drawback. Therefore, the rejection of the refund claim was upheld as per the specific conditions outlined in the Rule and notifications. The appeal was dismissed, affirming the decision of the original authority and Commissioner (Appeals).