2017 (9) TMI 693 - AT - Central Excise

100% EOU - refund of unutilised CENVAT credit - whether the first appellate authority is correct in allowing the appeal filed by Dr. Reddy s Laboratories against the Order-in-Original (Refund) No.172/2009-10 dated 18.09.2009 restricted the refund amount of unutilised CENVAT credit or otherwise? Held that - As there is no clarification as to whether Revenue has preferred an appeal against the earlier order, the first appellate authority, in the case in hand was correct in holding that the refund of the CENVAT credit on the inputs and input services cannot be restricted, more so if the assessee is in 100% EOU - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
Whether the first appellate authority correctly allowed the appeal regarding the refund of unutilized CENVAT credit.

Analysis:
The appeal before the Appellate Tribunal CESTAT ALLAHABAD involved a dispute regarding the refund of unutilized CENVAT credit by a 100% EOU engaged in the manufacture of medicaments. The Revenue challenged the Order-in-Appeal that had allowed the appeal filed by the respondent, Dr. Reddy's Laboratories, against the Order-in-Original that restricted the refund amount. The adjudicating authority had limited the refund claim to the extent of utilization of inputs and input services for manufacturing exported goods. The first appellate authority set aside this restriction, citing a previous order in favor of the same assessee on the same issue. The department argued that the adjudicating authority was correct in restricting the refund claims, while the counsel for the respondent pointed out that the department had accepted a previous order in the appellant's favor for an earlier period, and no appeal was filed against it.

The Tribunal noted that the first appellate authority had correctly interpreted the law regarding the refund of unutilized CENVAT credit on inputs and input services used for manufacturing exported final products in a previous case involving the same assessee. As there was no clarity on whether the Revenue had appealed against the earlier order, the Tribunal found that the first appellate authority in the current case was right in holding that the refund could not be restricted, especially for a 100% EOU. The Tribunal concluded that the findings of the first appellate authority were in line with established law and upheld the impugned order as correct and legal, devoid of any infirmity. Consequently, the appeal by the Revenue was rejected, and the order was pronounced in open court on 31/08/2017.