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TMI Blog2009 (5) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner (Appeals), which is well reasoned. He had also come to the conclusion based on the figures that the respondent is not in a position to utilize the credit availed on inputs used in the manufacture of goods, which were exported under bond and which are getting accumulated from time to time. He has correctly applied Rule 5 of CCR, which provides for sanction of refunding cash in respect of goods exported under bond/letter of undertaking. Moreover, the issue is settled in terms of the decisions of the Tribunal cited by the learned Counsel for the respondents. The OIO and the Appeal of the Department are also beyond the scope of the Show Cause Notice. X X X X Extracts X X X X X X X X Extracts X X X X ..... ance is not on account of inputs used in the manufacture of export goods. Nevertheless, the only input for the manufacture of re-drawn wire is the wire rods, which is not disputed. It is also not the case of the department that the credit balance in Cenvat account had come be- low the amount of refunds claimed at any point of time during the relevant time. In fact the unutilised credit balance at the beginning of September, 2005 which was at Rs. 74,47,942/- stands accumulated to Rs. 3,96,11,217/- balance as at the end of August, 2006 i.e. during the period for which the five refund claims were filed, month wise closing balance are as under - Month Unutilised Closing balance of Total Credit at the end of the month Total Credit BED Education Cess Sept., 2005 9525068 150201 9675269 Oct., 2005 10770621 175112 10945733 Nov., 2005 12938260 218048 13156308 Dec., 2005 13138139 222049 13360488 Jan., 2006 14721661 253712 14975373 Feb., 2006 17782530 314928 18097458 Mar., 2006 19834360 344208 20178568 Apr., 2006 22889491 382034 23271525 May, 2006 24161390 415863 24577253 Jun., 2006 28343046 498129 28841175 Jul., 2006 35306245 610847 35917092 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escription of the input/input services which has gone into the manufacture of exported goods; (b) the quantity of such inputs/input services; and (c) the amount of credit availed on such inputs/input services, and only such amounts of Credit availed in respect of inputs or input services which is used in the final products which is cleared for ex port is eligible for refund under this Rule. Central Govt. under the powers conferred on them under Rule 5 has issued Notification No. 11/2002 dated l-3-2002/05/2006-C.E (N.T.), dated 14-3-2006, prescribing the safeguards, conditions and limitations for allowing the refund of the credit availed on inputs/input services which are used in the exported goods. One such conditions as enumerated in Para 5 of the Notification is - "The refund is allowed only in those circumstances where a manufacturer is not in a position to utilize the credit of duty on inputs allowed under Rule 3 of the said rules against goods exported during the quarter or month to which the claim relates. Further, even in the "application for refund of Cenvat Credit under Rule 5 of CCR, 2002" in Form "A" prescribed vide Notification No. 11/2002-C.E. (N.T.) dated 1-3-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture against the export goods were used in the manufacture of PVC Insulated Wire and cleared for home consumption and that the credit availed on inputs had also been utilized for payment of duty for such home consumption. For Example, in Invoice No. 70035/16-6-2006, on which the refund of credit was claimed by the assessee, a quantity of 8,902 kgs of 8mm Copper rods, were received and issued for production on 19-6-2006 and PVC insulation wire was got manufactured on the same day and cleared for home consumption/EOU. Like wise under Invoice No. TW/600364 dated 18-7-2006, a quantity of 11,939 kgs. of copper rods were received was issued on 24-7-2006, PVC insulated wire was manufactured and subsequently cleared for home consumption [full details of the 'Daily Production Statement furnished by the assessee is en closed as Annexure-I] When it is clear from the facts that the assessee had claimed the refund under Rule 5 on the inputs which is used in the final products and cleared for home consumption and not the amounts of Credit availed in respect of inputs or input services which is used in the final products which is cleared for export out of India, they will not be eligible for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Cenvat Credit and has ordered for the total refund in as much as it can be seen from Annexure II that; (a) it is clear that for the quarters ending Sept.' 2005 and Sept.' 2006 there was no Export clearances at all; (b) for the quarters ending Dec.' 2005, Mar.' 2006 and Jun.' 2006, the maximum clearances of export is only to the extent of 17.63%, 10.83% and 6.30% respectively. Thus the Order of the Commissioner (Appeals) in setting aside the order of the original adjudicating authority is not proper and legal. (vii) CESTAT, West Zonal Bench, in the case of M/s. Pee Vee Textile Ltd., v. CCE, Nagpur - 2005 (186) E.L.T. 252 (Tri.-Mumbai), while remanding the case for fresh consideration had held that - "Rule 5 of CCR' 2002 states that before sanctioning any refund one has to only examine whether accumulated credit pertains to inputs gone into production of goods which were exported and also whether applicant for refund is in no position to utilize accumulated credit." The adjudicating authority in his Order in Original had clearly examined the issues properly and has held that the accumulated credit does not pertain to inputs gone info production of goods which were exported. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in respondent's favour by the following decisions:- (a) CCE v. Sterlite Industries India Ltd. - 2004 (173) E.L.T. 28 (b) Pee Vee Textiles Ltd. v. CCE - 2005 (186) E.L.T. 252 (c) Navbharat Industries v. CCE, Thane-I - 2006 (199) E.L.T. 148 (Tri. Mumbai) (d) Om Prakash, Jai Prakash and Co. v. CCE - 2004(178) E.L.T. 429 (e) Gillete India Ltd. v. CCE - 2004 (175) E.L.T. 339 (f) Bishen Dyg., Ptg. & Wvg. Mills v. CCE, Thane-I - 2007 (210) E.L.T. 582 (iii) The Show Cause Notices issued in this case sought to reject the re fund claim on the only ground that the amounts claimed as refund have been utilised for payment of duty on domestic clearances. The O-I-O sought to introduce a new ground that the quantity of copper wire rods mentioned in the refund has been used in the manufacture of goods cleared for home consumption. Reliance in this regard was placed on the entries in the Daily - Production Report. The above ground of actual us age was never raised in the Show Cause Notice and, therefore, cannot be raised either in the O-I-O or in the appeal filed by the Department. More over, the conclusion in the O-I-O based on an inference from the daily production statement is without a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on 30-9-2006 as correctly noted in Order-in-Original No. 34/2007 dated 18-6- 2007. (b) The appellant has further contended that for the quarters ending December, 2005; March, 2005 and June, 2006; the export clearances were only to the extent of 17.63%, 10.83% and 6.30% and therefore, refund is not admissible. 9. We have gone through the records of the case carefully. The fact that the appellants used the inputs is not in doubt. It is also not disputed that the appellants had exported the impugned goods and the refund is only in respect of the input credit attributable to the inputs utilized in the exported goods. It is not necessary to prove one-to-one correlation of inputs with that of export goods. We agree with the learned Commissioner (Appeals) that there is no such requirement under the Cenvat Credit Rules, 2004. We have already reproduced the finding of the Commissioner (Appeals), which is well reasoned. He had also come to the conclusion based on the figures that the respondent is not in a position to utilize the credit availed on inputs used in the manufacture of goods, which were exported under bond and which are getting accumulated from time to time. He has correctly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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