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2006 (7) TMI 491 - AT - Central ExciseCenvat/Modvat - Deemed credit - supplies made to EOUs/Merchant Exporters are not covered by the expression ‘export under bond’ - Grey fabrics - reject the refund claim - limitation - HELD THAT:- In the present case, an amount of Rs. 65 lakhs has already been utilized on payment of duty on the final products cleared for home consumption. As per Notification, Deemed Credit can be taken or the credit is allowed at the time of clearance of the final products. This credit is utilized for payment of duty. The respondents have not directly exported the final products. They had cleared the final products to EOUs/Merchant Exporters. In view of this reason, it would not be possible for them to adjust the credit accumulated. In that case also, the refund is possible. In other words, the entitlement to Deemed Credit is governed by para 2 of the Notification which does not restrict the same to final products cleared directly by the respondent under bond. The interpretation of the Commissioner (Appeals) is correct. We would like to observe that even in Rule 5 of the Cenvat Credit Rules, there is a provision for refund of Cenvat Credit even in cases where the inputs are used in intermediate products cleared for export and the accumulated credit could not be adjusted for payment of Central Excise duty. When this is the general rule, there is no justification for denial of the refund claim when the final products were cleared to other EOUs. As regards the question of time bar, we do not find this question in the Show Cause Notice. Moreover, the Tribunal, in the case of CCE & C, Ahmedabad-I v. Anjani Synthetics Ltd. [2001 (6) TMI 93 - CEGAT, MUMBAI], has held that refund claim in respect of Deemed Credit is not deniable on the ground of limitation as explanation ‘B’ to Section 11B of Central Excise Act, 1944 does not specify anything about refund claim arising under deemed credit. In these circumstances, we do not find any merit in the Revenue’s appeal and the same is dismissed. Thus, we hold that the respondent is entitled for Deemed Credit in respect of the final products which are cleared to EOUs/Merchant Exporters and the deemed credit is not restricted to the products directly exported by them under bond as contended by the respondents. Thus, the Revenue appeal is dismissed.
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