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2017 (11) TMI 770 - AT - Central Excise100% EOU - refund of unutilized CENVAT credit - Held that - the certificate issued by the CA as well as the CENVAT credit register clearly shows that the figure shown in the ER returns is wrong and the appellant has filed the refund claim of ₹ 33,79,759/- and he has already reversed the credit of ₹ 34,43,095/- - the appellant has given proper explanation of this discrepancy - the impugned order is not sustainable in law and the same is set aside by allowing the appeal of the appellant - decided in favor of appellant.
Issues:
Refund of unutilized CENVAT credit on input services under Rule 5 of CENVAT Credit Rules. Analysis: The appellant, a 100% EOU engaged in manufacturing and exporting readymade garments, sought a refund of unutilized CENVAT credit amounting to &8377; 33,79,759/- for the period July 2014 to September 2014. The Deputy Commissioner sanctioned a partial refund of &8377; 22,25,656/- and rejected &8377; 11,54,103/-, citing discrepancies in the availed credit. The rejection was based on the ER-2 return figures, which did not align with the appellant's maintained CENVAT credit account. The appellant argued that the ER-2 figures were not definitive, and the actual credit availed was higher, supported by a CA certificate and credit account register. The Commissioner (A) upheld the rejection, emphasizing the discrepancy between the ER-2 returns and refund application. The appellant contended that the reversed credit of &8377; 34,43,095/- entitled them to the refund claimed. The Tribunal noted the appellant's reversal of credit and the discrepancy in ER-2 figures, concluding that the refund claim was valid. The Tribunal found the impugned order unsustainable, setting it aside and allowing the appellant's appeal. The main contention revolved around the discrepancy in the availed CENVAT credit as per the ER-2 returns and the refund application. The appellant maintained that the ER-2 figures did not accurately reflect the actual credit availed, supported by a CA certificate and credit account register showing a higher reversed credit amount. The Tribunal accepted this argument, emphasizing that the appellant had reversed a higher credit amount than claimed for a refund, rendering the rejection based on ER-2 figures unjustified. The appellant's argument centered on the proper maintenance of CENVAT credit accounts as per Rule 9 of the CENVAT Credit Rules 2004. They asserted that the authorities should have considered the actual credit account rather than solely relying on ER-2 returns. The Tribunal agreed, highlighting that the appellant's maintained credit account, supported by evidence, demonstrated the higher reversed credit amount, justifying the refund claim. The Tribunal found that the authorities had failed to appreciate this critical aspect and had erroneously rejected the refund claim based on ER-2 discrepancies. In conclusion, the Tribunal held that the impugned order was legally unsustainable as the appellant had adequately explained the discrepancy between the ER-2 figures and the actual reversed credit amount. By considering the evidence presented, including the CA certificate and credit account register, the Tribunal deemed the refund claim valid and set aside the Commissioner (A)'s decision, allowing the appellant's appeal for the refund of unutilized CENVAT credit.
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