Refund of Accumulated Cenvat Credit, Central Excise

[Samir Banerjee]

We have a client (manufacturer of CFL and LED lights) located at Uttarakhand. As per state development policy, the client enjoying exemption from payment of Central Excise. Whereas, while procuring inputs including capital goods from outside Uttarakhand they are liable to pay Excise Duty, which they are unable to utilize with the result it is amounting to cost for them. Is there any prescribed process under any rule whereby they can get the amount of un-utilized Cenvat?

Posts / Replies

[CS SANJAY MALHOTRA]

Dear Samir,

Refund of unutilised credit can be availed under Rule 5 of CCR 2004 provided the physical exports have taken place irrespective of whether the goods are excisable or exempted.

In case of domestic clearances of exempted goods, CENVAT credit on input is not available if the final product is exempted. Hence, when CENVAT is not eligible, no issue of refund of unutilised credit stands.