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2016 (3) TMI 952 - CESTAT MUMBAI

2016 (3) TMI 952 - CESTAT MUMBAI - TMI - Rejection of refund claims for the period 10.09.2004 to 31.03.2005 - Eligible for benefit of Notification No. 05/2006 dated 14.03.2006 - 100% Export Oriented Unit received inputs services on which credit was availed and utilised for manufacturing for goods that were exported - Entitled to avail CENVAT credit on such input services that they are not in a position to utilise the CENVAT credit for discharge of duty liability for the clearance made to home co .....

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by issuance another show-cause notice, which is beyond his jurisdiction. - Both the lower authorities have not followed the judicial discipline while rejecting the refund claim which were already sanctioned by the first appellate authority.Therefore, the impugned order to that extent is unsustainable liable to be set aside. Also, in the three refund claims, the findings that the benefit of Notification dated 14.03.2006 is not applicable for the period prior to Notification dated 14.03.2006 .....

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itioner : Shri E.P. Bharucha, Sr. Advocate with Shri Cyrus E. Bharucha, Advocate, Shri Shailesh Kalambi, Advocate And Shri Anish Karande, Advocate For the Respondent : Ms. P. Vinitha Sekhar, Dy. Commissioner (A.R.) ORDER PER: M.V. RAVINDRAN: This appeal is directed against Order-in-Appeal No. MI/AV/300/2011 dated 06.05.2011 passed by the Commissioner of Central Excise (Appeals), Mumbai-I. 2. The relevant facts arises for consideration are the appellant is engaged in the manufacture and export of .....

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t of Order-in-Appeal No. CPA (122)61/STC/2006 dated 20.12.2006, wherein the Commissioner (Appeals) set aside the Order dated 24.07.2006 passed by the Assistant Commissioner of Service Tax, Division VI, Mumbai and further ordered the original authority to grant refund as per law. The Assistant Commissioner of Service Tax, Division VI, Mumbai returned the appellants claims for refund of unutilized Service Tax credit on the ground that claims cannot be entertained by their office as it is beyond t .....

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the above four refund claims it was noticed that in respect of refund claims amounting to ₹ 38,26,952/- the appellants had misled the Commissioner (Appeals) by submitting that they had availed CENVAT credit in respect of Service Tax paid by them and as there were no clearances for home consumption, they have filed refund claim under Rule 5 of CENVAT Credit Rules, 2004 for the accumulate CENVAT credit. Whereas, it was concluded that for the relevant period September 2004 to March 2006 and a .....

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iginal duty paying invoices/bills raised by the service providers, documents pertaining to the availment of input CENVAT credit of input services, certified copies of Service Tax returns filed, Bank realization Certificates in respect of exports, copies of Bill of lading / Shipping Bills etc. The appellants stated that the original bills, being voluminous, may be verified at their factory premises. The appellants were further requested vide letters dated 22.06.2007 and 11.07.2007 to furnish the .....

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nd claim, rejected all the four refund claims for total amount of ₹ 59,35,217/-. Aggrieved by such an order an appeal was preferred to the first appellate authority. The first appellate authority after following due process of law and upheld the order in respect of the refund claims prior to 14.03.2006 regarding that benefit of Notification is not retrospective, remanded the issue back to the adjudicating authority for reconsideration in respect of the refund claims post 14.03.2006. 4. Lea .....

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n in the said order of the Commissioner (Appeals) dated 20.12.2006. It is his submission that the lower authorities have not followed the judicial discipline. This is in violation of law has settled by the Hon'ble Apex Court in the case of Union of India Vs. Kamlakshi Finance Corporation Ltd. - 1991 (155) ELT 433 (S.C.). As regards the merits of the case, he submits that the benefit of Notification No. 05/2006 dated 14.03.2006 was eligible to them as held by the Tribunal in the case of Fibre .....

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the first appellate authority and submit that the adjudicating authority has correctly held that the refund claims are in consistent in the requirement. She would draw our attention to the order dated 20.12.2006 passed by the Commissioner (Appeals) and submit that the first appellate authority in the order has directed that the original adjudicating authority to grant refund as per law which would mean that the adjudicating authority has to go into the specific of the refund claim. She reiterate .....

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are not in a position to utilise the CENVAT credit for discharge of duty liability for the clearance made to home consumption. The appellant has filed three refund claims for the period 10.09.2004 to 31.03.2006 which was rejected by the adjudicating authority and on an appeal, the first appellate authority vide Order-in-Appeal dated 20.12.2006 held in the favour of the appellant. 7. We consider the issue in appeal filed by the appellant in respect of three refund application. It is seen from the .....

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s filed refund claim under Rule 5 of CENVAT Credit Rules, 2004, which was rejected by the lower authority for reasons enumerated earlier. However, these reasons do not stand the test of law. It is not the case of the lower authority that appellant are not eligible to avail Service Tax credit. The provision of Rule 5 of CENVAT Credit Rules, 2004 are very clear. The rule provides for refund of credit in respect of the input or input service subject to safeguards, condition and limitations as may b .....

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urnover to the total turnover for the given period to which the claim relates. A formula has been prescribed for this purpose. Since the appellants exported 100% of their final products, there can be no scope for utilisation of the credit earned. Therefore, the appellants are eligible for refund under Rule 5 CENVAT Credit Rules, 2004. After passing such a detail order, the first appellate authority in the said order in para 6 recorded as under:- 06. I have carefully gone through the records of t .....

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irected by the first appellate authority to consider the three refund claims as per law. Clear finding by the first appellate authority vide order dated 20.12.2006 as reproduced herein above, is directive in nature and surprisingly is not contested by the Revenue before higher judicial forum. In the absence of any appeal against such a clear directive to refund the amount, we are of the considered view the first appellate authority had sanctioned the refund claims holding categorically in favour .....

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tion. The first appellate authority in the impugned order has also not considered the issue in correct perspective on subject of the law and has also gone into the merits of the case, when it was already decided by the first appellate authority who is equal in rank to her. The first appellate authority who was considering and Order-in-Original passed in this case, should have perused the documents and the case history before going into the merits of the case before upholding the Order-in-Origina .....

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NT) dated 14.03.2006 is not applicable for the period prior to Notification dated 14.03.2006 are not sustainable, as it is now squarely settled in favour of assessee by the Tribunal in the case of Fibres & Fabrics International Pvt. Ltd. (supra). We reproduce the ratio which is in para 9. 9. On a very careful consideration of the matter, in the present appeals, all the refund claim pertains to period prior to 14-3-2006. However, as on 10-9-2004 itself, we have already given the reproduction .....

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