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2019 (11) TMI 950 - AT - Central ExciseRefund of accumulated unutilised CENVAT credit - inputs and input services used for goods manufacture and supplied to 100% EOU - deemed exports - Rule 5 of CENVAT credit Rules, 2004 - HELD THAT - The Commissioner (Appeals) had observed that the Assistant Commissioner i.e. refund sanctioning Authority had wrongly interpreted Rule 5 of the CENVAT Credit Rules, 2004 by stating that refund under this rule is permissible only if the goods are exported out of India and in case finished goods are cleared to 100% EOU against CT-3 which is considered as deemed export, refund is not admissible and such observation by wrong interpretation Notification No. 5/2006-CE (NT) dated 14.03.2006 as superseded by Notification No. 27/2012-CE (NT) dated 18.06.2012 is erroneous, since the spirit behind Rule 5 of the CENVAT Credit Rules, 2004 is to allow refund of CENVAT credit against deemed export also. No irregularity and illegality can be attributed to such an observation made by the learned Commissioner (Appeals) so as to invoke appellate jurisdiction of this Tribunal. Further this Tribunal in respondent s own case COMMISSIONER OF CENTRAL EXCISE CUSTOMS, NASIK VERSUS KIRAN ELASTOMERS PVT. LTD. AND (VICE-VERSA) 2017 (12) TMI 269 - CESTAT MUMBAI for the period prior to period under dispute had allowed refund to the respondent by holding that there was no significant difference as regards term export for the purpose of Rule 5 of CENVAT Credit Rules, 2004, during pre and post amendment introduced to Rule 5 in 2012. Appeal dismissed.
Issues:
Grant of refund of unutilised CENVAT credit for goods supplied to 100% Export Oriented Unit (EOU) under Rule 5 of CENVAT Credit Rules, 2004. Analysis: The appeal challenges the grant of refund by the Commissioner (Appeals) to the appellant for unutilised CENVAT credit accumulated against inputs and input services used for goods manufacture supplied to a 100% EOU. The Revenue-Department contests the legality of the order allowing the refunds. The factual background involves the appellant, a manufacturer of Printed Aluminium Foils, supplying goods to a 100% EOU for export between October 2012 and March 2013. Refund claims amounting to ?14,05,908/- and ?10,24,576/- were filed under Rule 5 of CENVAT Credit Rules, 2004. The Deputy Commissioner issued show-cause notices proposing to reject the refund claims, which were subsequently rejected through adjudication orders. However, the Commissioner of Central Excise (Appeals) allowed both refunds, leading to the appeal by the Department of Revenue. The Commissioner (Appeals) observed that the refund sanctioning Authority had misinterpreted Rule 5 of the CENVAT Credit Rules, 2004. The Assistant Commissioner's view that refunds under this rule are only permissible for goods exported out of India, and not for finished goods cleared to 100% EOU against CT-3, was deemed erroneous. The Commissioner held that the spirit behind Rule 5 is to allow refunds of CENVAT credit against deemed exports as well. Several judgments were cited to support this interpretation, including NBM Industries, Elcomponics Sales, and others. The Commissioner also noted the inapplicability of judgments such as M/s Priya Blue Industries Ltd. vs. CC (Prev) and decisions of various High Courts, as they did not involve the issue of using inputs in goods supplied to 100% EOU. The Commissioner's decision was further supported by a previous Tribunal order in the respondent's case, which allowed a refund for a period prior to the one under dispute. In light of the above analysis, the Tribunal dismissed the appeal and confirmed the order passed by the Commissioner of Central Excise & Customs (Appeals), Nashik, allowing the refunds. The order was pronounced in open court on 15.11.2019.
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