TMI Blog2020 (2) TMI 1574X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944 ) at the instance of Revenue and it is directed against the order dated 3-1-2019 passed by the Customs, Excise Service Tax Appellate Tribunal, West Zone Bench, Ahmedabad (for short the Tribunal) in Appeal No. E/21/2012-DB. 2. The appellant has proposed the following questions of law as substantial questions of law for consideration of this Court :- (I) Whether, in the context of the facts and in the circumstances of the case, the CESTAT was justified in holding that exemption under Notification No. 30/2004-C.E. is not absolute but conditional one, therefore, the provision of Rule 11(3) of the Cenvat Credit Rules, 2004, which provides for lapsing of credit lying unutilised shall not apply? (II) Whether, in the context of the facts and in the circumstances of the case, the CESTAT was justified in holding that the lapsing of Cenvat credit provided under Rule 11(3) related to goods already exported shall not apply? (III) Whether, in the context of the facts and in the circumstances of the case, the CESTAT was justified in holding that as per Clause (ii) of Rule 11(3) of Cenvat Credit Rules, 2004, credit related to capital goods and input services shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Notification No. 5/2006-C.E. (N.T.), dated 14-3-2006. The said order of refund issued in favour of the respondent-assessee has attained the finality, as the same is not challenged in the appeal by the Department. 4. It appears that the Audit party of the Central Excise undertook the Central Excise audit of the respondent-assessee and raised objection regarding non-eligibility of Cenvat credit lying unutilized and carried forward for the financial year 2008-09. Such Audit objection has resulted into the issuance of show cause notice dated 6-5-2009 proposing reversal of credit demanding interest and penalty. 5. The adjudicating authority, vide order dated 28-9-2011, confirmed the demand of Cenvat credit of ₹ 9,27,04,652/- under Rule 14 of the Rule read with Section 11A of the Act alongwith interest and imposed equal amount of penalty. The adjudicating authority also confirmed reversal of credit on capital goods and input service. Being aggrieved by the said order, the respondent-assessee went in Appeal before the Tribunal. 6. The Tribunal, considered the fact that the refund claim of the respondent-assessee has achieved finality, and therefore, question of applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 8,57,60,788/- was related to the inputs used in the manufacture of exported goods. The appellant claimed refund in the manufacture of exported goods. The appellant claimed refund under Rule 5 of the said amount and the department has sanctioned that refund, the issue of refund has attained finality. Therefore, as regard this amount of ₹ 8,57,60,788/- which included in overall demand amount has been allowed by the department as refund. In the such case demand for this particular amount cannot be raised otherwise it will amount to review of refund sanction order. Moreover, Rule 6(6) of Cenvat Credit Rules, 2004 provides for allowing the Cenvat credit in respect of inputs used in the goods exported. The said Rule is reproduced below :- (6) The provisions of sub-rules (1), (2), (3) and (4) shall not be applicable in case the excisable goods removed without payment of duty are either - (i) cleared to a unit in a special economic zone; or to a developer of a special economic zone for their authorized operations; or (ii) cleared to a hundred per cent. export-oriented undertaking; or (iii) cleared to a unit in an Electronic Hardware Technology Park or Software ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s attributed to the inputs used in the goods already exported before 1-4-2008, the refund was already accrued and admittedly sanctioned to the appellant. Rule 5 also does not provide exception with reference to Rule 11 of Cenvat Credit Rules, 2004, for this reason also the objective of Rule cannot be defeated by invoking Rule 11 of the Cenvat Credit Rules, 2004. It has been held in various judgments cited by the Ld. Counsel i.e. Drish Shoes Ltd. and Rero India Ltd. (supra), even though the export goods is non-dutiable against the export Cenvat credit on inputs used in such export goods is admissible and refund of the same is also admissible under Rule 5 of the Cenvat Credit Rules, 2004. Therefore, the adjudicating authority ignoring all the provision of Rule 6(6), demanded Cenvat credit lying in balance as on 1-4-2008 invoking Rule 11(3) in isolation which is absolutely illegal and incorrect. As regard unutilized Cenvat credit as on 1-4-2008 amounting to ₹ 69,43,864/-, it is related to input service credit and capital goods. From the plain reading of Rule 11(3), it is clear that the provision of reversal of the credit is provided only in respect of inputs and not on input ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate appearing for the respondent-assessee submitted that the Tribunal has rightly arrived at finding of fact that once the respondent-assessee has already exported the goods and the refund is granted to the respondent-assessee under Rule 5 of the Cenvat Credit Rules, 2004 which has achieved finality then provision of Section 11(3) of the Cenvat Credit Rules, 2004 could not have been invoked against the respondent-assessee. It was submitted that Clause (V) of sub-rule 6 of Rule 6 of Cenvat Credit Rules, 2004 provides that, if the goods are cleared for the export under bond and terms of provision of Central Excise Rules, 2002, the provision of sub-rule (1), (2), (3) and (4) would not apply. In the circumstances, if the final product is exempted, the Cenvat credit of inputs used in the manufacture of export goods is available. It was therefore submitted that in view of Rule 6(6), the lapsing of Cenvat credit provided under Rule 11(3) related to goods already exported shall not apply, otherwise Rule 6(6) will become redundant. 9. Having heard Learned Advocates for the respective parties and having gone through the reasonings given by the Tribunal, we are in agreement with the findin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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