2023 (9) TMI 646 - SCH - Central Excise

Rejection of Refund of excise input credit, after adjustment of the tax liability for the relevant period towards the output liability - N/N. 1/2005-CE - HELD THAT - The findings of the lower authorities in the opinion of this Court are unclear as to what was the relevant period. Although there is a reference to under Section 11 B of the Central Excise Act; the exact period in this case would be determinative. In case, the appellant had indeed sought refund of excess credit or whatever credit was lying to its account as on the date it applied for exemption under Notification No. 1/2005-CE, its arguments before this Court would be justified. In these circumstances, the impugned order and the orders of the lower authorities are hereby set aside. The matter is remitted to the appellate commissioner to decide whether the controversy in respect of which period the appellant had claimed refund of credit and if its contention is valid and justified, to what extent to which it is entitled to any relief. Appeal allowed by way of remand.

Summary

Issues involved:
The correctness of the impugned order of the Gujarat High Court upholding the order of the Commissioner of Customs, Excise and Service Tax Appellate Tribunal regarding the rejection of the appellant's claim for refund of excise input credit under Notification No. 1/2005-CE.

The appellant's claim for refund of excise input credit was rejected by the revenue authorities after adjusting the tax liability for the relevant period towards the output liability. The authorities relied on Notification No. 1/2005-CE, which required every assessee to give up credit of duty on inputs or capital goods. The appellant had surrendered its central excise registration to avail the exemption under the notification and sought a refund of excess credit lying in its account for the previous period before seeking the benefit of the exemption.

The excise authorities also relied on Rule 5 of the CENVAT Credit Rules, which allows for the refund of CENVAT credit in certain circumstances where inputs or input services are used in manufacturing final products cleared for export or providing exported output services. The appellant's argument was that it was seeking a refund of excess credit lying in its account before availing the benefit of the exemption under Notification No. 1/2005-CE.

The Court found that the lower authorities' findings were unclear regarding the relevant period for the refund claim. The matter was remitted to the appellate commissioner to determine the period for which the appellant had claimed the refund of credit and decide the extent to which the appellant is entitled to any relief. The decision was to be rendered within six months, and the appeal was allowed accordingly.

Separate Judgement:
No separate judgment was delivered by the judges in this case.