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Refund of CENVAT credit to units in specified areas - Cenvat Credit - Ready Reckoner - Cenvat Credit

Refund of CENVAT credit to units in specified areas
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Chapter 11A

Refund of CENVAT credit to units in specified areas

Statutory Provisions:

Rule 5A of the Cenvat Credit Rules, 2004

5A - Refund of CENVAT credit to units in specified areas-

Notwithstanding anything contrary contained in these rules, where a manufacturer has cleared final products in terms of notification of the Government of India in the Ministry of Finance (Department of Revenue) No.20/2007-Central Excise, dated the 25th April, 2007 and is unable to utilize the CENVAT credit of duty taken on inputs required for manufacture of final products specified in the said notification, other than final products which are exempt or subject to nil rate of duty, for payment of duties of excise on said final products, then the Central Government may allow the refund of such credit subject to such procedure, conditions and limitations, as may be specified by notification.  

Explanation: For the purposes of this rule, duty means the duties specified in sub-rule (1) of rule 3 of these rules.  



For conditions, safeguard and limitation prescribed by the Central Govt - see below


1.   Refund under rule 5A shall be allowed only to units availing exemption under notification no. 20/2007 dated 25-4-2007.

2.   Only Cenvat Credit of duty taken on inputs is eligible for refund.

3.   Refund shall be allowed in case such Cenvat credit could not be utilized for payment of excise duty on other final products.

4.   For the purpose of claiming refund, manufacturer is required to file a declaration with the AC/ DC.

5.   A detailed statement of inputs received, Cenvat Credit taken, inputs used and Cenvat credit utilized etc. shall be submitted.

6.   Refund application shall be filed each month by the 7thday of next month.

7.   Refund shall be granted within 3 months. In case refund is likely to be delayed, 80% amount shall be granted.

8.   Procedure for claiming refund of un-utilised CENVAT credit as per Notification No. 25/2007 subject to  Notification No. 20/2007-Central Excise, dated the 25th April, 2007

·    The manufacturer shall file a declaration with the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the factory of manufacture describing the finished goods proposed to be manufactured along with their rate of duty leviable and manufacturing or processing formula with particular reference to quantity or proportion in which the materials are actually used as well as the quality.

·    The declaration shall also contain the tariff classification, rate of duty paid or payable on the materials so used, both in words and figures, in relation to the finished goods to be manufactured and cleared. 

·    However, if any particulars given in the declaration have undergone any changes, the revised declaration shall be filed by the manufacturer;

·    the manufacturer shall submit a statement containing details namely quantity of opening balance of inputs, quantity of inputs received during the month, value thereof, duty paid or payable thereon, amount of Cenvat Credit taken, quantity of inputs used during the month, quantity of final products manufactured, quantity of inputs lying in stock at the end of the month, amount of Cenvat credit utilised for payment of duty on the final product and amount of Cenvat credit lying in balance to the Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be, by the 7th day of the next month for claiming refund;

·    the Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be, after such verification, as may be deemed necessary, may refund the balance amount of unutilised credit, if any, at the end of the month under consideration to the manufacturer within a period of 3 months from the date of receipt of the statement; and

·    if there is likely to be any delay in the verification, the Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be, shall refund 80% of the amount on provisional basis by the 30th day of the month following the month under consideration.

          9. For more details please refer to notification no. 25/2007 CE(NT) dated 25-4-2007

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