2015 (1) TMI 1320 - AT - Central Excise

100% EOU - refund claim - appellant could not have filed the claim every month relying upon Paragraph 2 which deals with filing of such refund claims refund claim has been rejected - Held that - A 100% EOU can file refund claim for each calendar month. The quantum of export principle is applicable only for domestic units and if intention was to incorporate such a condition it would have been mentioned in Paragraph 2(b) also. In the absence of such mention the clause cannot be read into paragraph b . When the deemed exports are made it results in accumulation of Cenvat credit also - value of deemed exports cannot be taken into account also cannot be accepted. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Refund claim rejection under Rule 5 of Cenvat Credit Rules for a 100% EOU.

Analysis:
The appellant, a 100% EOU, filed a refund claim under Rule 5 of Cenvat Credit Rules, which was rejected on the grounds that the claim could not be filed every month as per Paragraph 2 of the notification. The consultant argued that Paragraph 2 allows claims for refund to be filed for each calendar month by 100% EOUs, and thus, the rejection was unjustified. On the other hand, the AR contended that the rejection was also based on the fact that deemed export values cannot be considered for calculating the refund percentage. The Tribunal considered the submissions and analyzed the relevant clause of the notification, which clearly stated that a 100% EOU can file refund claims for each calendar month. It was noted that the export principle quantum applies only to domestic units, and since there was no mention of such a condition for EOUs in Paragraph 2(b), it cannot be imposed. Additionally, regarding deemed exports, it was clarified that Cenvat credit cannot be utilized for them, but under Rule 5, accumulated Cenvat credit is refunded, including for deemed exports. Therefore, the argument that deemed export values cannot be considered for the refund claim was also dismissed. Consequently, the Tribunal allowed the appeal, set aside the impugned order, and granted consequential relief to the appellant.

Conclusion:
The judgment by the Appellate Tribunal CESTAT Bangalore clarified the eligibility of a 100% EOU to file refund claims for each calendar month under Rule 5 of Cenvat Credit Rules, rejecting the notion that such claims could not be made every month. The decision emphasized the specific conditions outlined in the notification and distinguished between domestic units and EOUs in terms of refund claim frequency and the treatment of deemed exports. By overturning the rejection of the refund claim, the Tribunal upheld the appellant's right to seek refunds in accordance with the provisions applicable to EOUs, providing a significant ruling on the interpretation and application of relevant rules in such cases.