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2009 (8) TMI 170 - AT - Service TaxRefund of unutilized credit - appellants are engaged in the manufacture of Soya Oil exempted under Notification No. 3/2006, and De-Oiled Cake chargeable to nil rate of duty. The appellants has been exporting De-Oiled Cake under Bond. The appellants filed refund claim of unutilized Cenvat credit on input service i.e. GTA service, Insurance, Brokerage service, and Travel Agency service - Bombay High Court in the case of Repro India Ltd. v. UOI & Anrs., allowed the refund of unutilized Cenvat credit even on exempted goods or goods chargeable to nil rate of duty, exported under bond - Tribunal on the identical issue in the case of Punjab Stainless Steel Industries v. CCE, Delhi-I, reported in 2008 - TMI - 4544 - CESTAT, NEW DELHI allowed refund claim, which was upheld by the Hon ble Delhi High Court, as reported in the case of CCE, Delhi-I v. Punjab Stainless Steel 2008 - TMI - 31677 - HIGH COURT DELHI . Held that appellant is eligible for refund of Cenvat credit in exported goods under Rule 5 of Cenvat Credit Rules
Issues: Refund of unutilized Cenvat credit on input services for exported goods under Rule 5 of Cenvat Credit Rules, 2004.
Analysis: 1. Facts of the Case: The appellants, engaged in manufacturing Soya Oil and De-Oiled Cake, filed a refund claim of Cenvat credit on input services for exported De-Oiled Cake. The claim was rejected by the original authority and upheld by the Commissioner (Appeals). 2. Appellant's Argument: The advocate for the appellants argued that since the goods were exported under bond, unutilized credit should be refunded as per Rule 5 of Cenvat Credit Rules, 2004. Cited judgments from the Hon'ble Bombay High Court and Tribunal in support of the refund claim on exempted goods exported under bond. 3. Revenue's Argument: The Revenue contended that Rule 5 of Cenvat Credit Rules, 2004 does not apply as the appellants only manufacture exempted goods, unlike the case cited by the advocate. Mentioned the change in rules restricting refund for inputs used in the manufacture of exempted goods. 4. Judgment Analysis: The Tribunal found that the appellants exported De-Oiled Cake chargeable to nil rate of duty. Referenced the Bombay High Court judgment allowing refund for exported goods regardless of being exempted. Highlighted the change in wording from "exempted goods" to "goods removed without payment of duty" in the rules. 5. Rule Interpretation: The Bombay High Court's observation emphasized the wider scope of Rule 6(6) to include both dutiable and exempted goods exported under bond. The change in terminology aimed to cover situations where dutiable goods are exported without payment of duty, ensuring credit availability for inputs used in such exports. 6. Precedent: Mentioned a similar case where refund was granted for exported stainless steel utensils exempted from duty, supporting the appellants' claim for refund of credit on inputs used in exported goods. 7. Conclusion: The Tribunal held that the appellants are entitled to a refund of Cenvat credit for exported goods under Rule 5 of Cenvat Credit Rules, setting aside the impugned order and allowing the appeal with consequential reliefs. The judgment clarified the applicability of the rule to exported goods, irrespective of being exempted or chargeable to nil rate of duty.
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