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2022 (6) TMI 429 - AT - Central Excise100% EOU - Partial rejection of claim for refund preferred under rule 5 of CENVAT Credit Rules, 2004 - inclusion of credit that had been restored consequent upon rejection of claims for previous periods in the computation of entitlement in subsequent claims - April 2016 to June 2016, July 2016 to September 2016 and October 2016 - HELD THAT:- Rule 5 of CENVAT Credit Rules, 2004 has been specially formulated for neutralizing tax/duty paid on input service/input used for generating exports. The disposal of claims for refund under this provision is, as already premised, is limited to ascertainment of quantum of exports and the application of the formula prescribed for ascertainment of attribution of such input service/input to exports. Any amount not sanctioned is to be recredited in the CENVAT credit account on the presumption of credit having been correctly availed under rule 3 of CENVAT Credit Rules, 2004 and, in the absence of proceedings initiated under the authority of rule 14 of CENVAT Credit Rules, 2004, availment of credit is not to be revisited. Therefore, the denial of refund on the presumption of ab initio ineligibility will not stand and refund procedure cannot be claimed to be a substitute for recovery. The denial on these grounds is without authority of law. Denial owing to ‘padding up’ of eligible CENVAT credit of earlier periods that had to be re-credited following rejection of refund claim to that extent - HELD THAT:- An assessee such as the appellant, manufacturing primarily for the international market, has little scope for utilization of CENVAT credit in the normal course of discharge of duty liability. It is not the case of Revenue that the appellant had cleared goods domestically on payment of duty and was, through the refund route, attempting to recover the same; there is a certain lack of logic too in that. Any remnant by application of formula, and its precise intendment, can trace its origin to input lying unutilized or input service yet to be utilized for manufacture. Its utilization in some subsequent period can be reflected only by restoration of the rejected portion of a claim for refund. The restoration is permitted by law and the availment suffices to entitle inclusion for apportionment towards export of a subsequent quarter. The claim of the appellant has been wrongly discarded by the lower authorities - Appeal allowed - decided in favor of appellant.
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