2020 (8) TMI 109 - AT - Central Excise

Refund of duty accumulated on account of export - Export of goods - Rule 5 of Cenvat Credit Rules, 2004 - Rebate of duty u/r 18 of CER claimed - HELD THAT - As per Rule 5 of the Cenvat credit Rules, 2004, a manufacturer who has cleared his final product for export without payment of duty under bond or letter of undertaking can file refund claim under Rule 5 of Cenvat Credit Rules, 2004 - Admittedly, none of these conditions has been satisfied by the appellant as they have neither cleared the goods under bond without payment of duty or through letter of undertaking. therefore, fundamentally, the appellant has not complied with the condition of Rule 5 of Cenvat Credit Rules, 2004. Further, as per the proviso of the said rule, no refund of Cenvat credit shall be allowed if manufacturer avails drawbacks allowed under customs duty or Central Excise and service tax drawbacks Rules 1995 or claim rebate of duty under Sections of Central Excise Rules, 2002 which means that the assessee shall not claim rebate of duty under Central Excise Rules, 2002 - Admittedly, in this case, the appellant has claimed rebate of duty under Rule 18 of Central Excise Rules, 2002. Under the provision of Rule 5 of Cenvat Credit Rules, 2004, the refund claims are not maintainable - Appeal dismissed - decided against appellant.

Summary

Issues:
Claim of refund of duty accumulated on account of export under Rule 5 of Cenvat Credit Rules, 2004.

Analysis:

1. Claim of Refund Under Rule 5 of Cenvat Credit Rules, 2004:
The appellant, a manufacturer of pharmaceuticals, filed a refund claim under Rule 5 of Cenvat Credit Rules, 2004, for duty accumulated in their Cenvat credit account due to exporting final products. The appellant claimed that as the rate of duty on inputs was higher than finished goods, they were entitled to the refund. The appellant relied on a Supreme Court decision to support their claim. However, the respondent argued that the appellant had already claimed rebate under Rule 18 of Central Excise Rules, 2002, making them ineligible for refund under Rule 5. The Tribunal examined Rule 5, which allows a manufacturer to claim refund if goods are cleared for export without duty payment, and concluded that the appellant did not meet the conditions of the rule as they had not cleared goods under bond or letter of undertaking. Additionally, the rule prohibits refund if the manufacturer avails drawbacks or claims rebate under other specified rules, which the appellant had done. Therefore, the Tribunal held that the refund claims were not maintainable under Rule 5 of Cenvat Credit Rules, 2004, and upheld the rejection of the claims.

2. Interpretation of Rule 5 of Cenvat Credit Rules, 2004:
The Tribunal analyzed the provisions of Rule 5 of Cenvat Credit Rules, 2004, which outline the conditions for claiming refunds on exported goods. The rule specifies that manufacturers can claim refunds if goods are cleared for export without duty payment under certain conditions. It also prohibits refunds if the manufacturer avails drawbacks or claims rebate under other rules. The Tribunal emphasized that the appellant did not fulfill the conditions of the rule as they had not cleared goods without duty payment and had already claimed rebate under a different rule. By interpreting the rule strictly, the Tribunal concluded that the appellant's refund claims were not permissible under Rule 5.

3. Precedent and Legal Interpretation:
The appellant heavily relied on a Supreme Court decision regarding rebate of excise duty on exported goods. However, the Tribunal noted that the Supreme Court decision did not address the specific issue of refund claims under Rule 5 of Cenvat Credit Rules, 2004. The Tribunal highlighted that the conditions and provisions of Rule 5 were distinct from those considered in the Supreme Court case. Therefore, the Tribunal concluded that the Supreme Court decision did not support the appellant's claim for refund under Rule 5. The Tribunal's decision was based on a strict interpretation of the relevant rules and conditions governing refund claims for exported goods.

4. Final Decision and Upholding of Impugned Orders:
After considering the arguments from both parties and examining the relevant legal provisions, the Tribunal dismissed the appeals and upheld the impugned orders rejecting the refund claims. The Tribunal emphasized that the appellant's failure to meet the conditions specified in Rule 5 of Cenvat Credit Rules, 2004, rendered their refund claims untenable. By strictly interpreting the rule and considering the appellant's prior rebate claim under a different rule, the Tribunal concluded that the refund claims could not be sanctioned. The decision was based on a thorough analysis of the legal provisions and the specific circumstances of the case, ultimately resulting in the dismissal of the appeals.

This comprehensive analysis of the judgment highlights the key legal issues, interpretations of relevant rules, application of precedent, and the final decision rendered by the Appellate Tribunal CESTAT CHANDIGARH regarding the claim of refund of duty accumulated on account of export under Rule 5 of Cenvat Credit Rules, 2004.