TMI Blog2024 (1) TMI 1118X X X X Extracts X X X X X X X X Extracts X X X X ..... d / or for refund under Rule 5 of Cenvat Credit Rules registration is not mandatory as per Well Known Polyesters Ltd. Vs. Commissioner of C. Ex., Vapi [ 2011 (1) TMI 664 - CESTAT, AHMEDABAD ] - In view of the above judgment it is settled that Cenvat Credit and /or refund thereof cannot be denied merely because the claimant has not taken the registration of Service Tax/ Central Excise. The other issue dealt with by the Commissioner (Appeals) is that the refund of input duty /input service tax when appellant s goods which was exported is exempted from Central Excise Duty and Service Tax and the export of the goods was made without bond /LUT - this issue is also settled in various Judgments like The Commissioner of Central Excise Drish Shoes Limited [ 2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT ] and Well Known Polyesters Ltd. Vs. Commissioner of C. Ex., Vapi [ 2011 (1) TMI 664 - CESTAT, AHMEDABAD ]. In view of the above Judgments given by this Tribunal as well as various High Courts, it is settled legal position that even though manufactured goods/ output services is exempted, refund of Service Tax against export of the same cannot be denied. Therefore, in the present case d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed cenvat credit of input services. 1.3 On 22.12.2014 the appellant again filed the refund claim by curing defects as pointed out by the learned Assistant Commissioner. The appellant placed reliance upon various decisions to show that the appellant was eligible for refund claim of unutilized cenvat credit for export of goods. On 20.02.2014, the Assistant Commissioner returned the refund claim on the ground that the same was not under rules and regulation against which the appellant preferred an appeal before the Commissioner (Appeals), which was rejected vide order dated 20.05.2014. Therefore, the present appeal filed by the appellant. 2. Shri Hardik Modh, Learned Counsel appearing on behalf of the Appellant submits that both the lower authorities have wrongly rejected the refund claim on all the counts. He further submits that even if the registration was taken belatedly , the refund of unutilized cenvat credit is admissible. In this regard he placed reliance on the following judgments:- Well Known Polyesters Ltd vs. Commissioner of Central Excise, VAPI- 2011 (267) ELT 221 (Tri Ahmd) Metric Solution Pvt. Ltd. Vs. CCE, Ahmedabad- 2012(28) STR 460 (Tri. Ahmd.) M po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that availment of Cenvat Credit and / or for refund under Rule 5 of Cenvat Credit Rules registration is not mandatory as per the following judgments : Well Known Polyesters Ltd. Vs. Commissioner of C. Ex., Vapi - 2011 (267) ELT 221 (Tr. Ahmd) 5 . The first issue is whether the appellant was eligible for the cenvat credit when they have not taken registration and the cenvat credit taken by them for the period 1-11-2008 to October 2009 can be allowed. For this purpose, the appellant had relied upon the decision of the Tribunal in the case of J.R. Herbal Care India Limited v. CCE, Noida - 2010 (253) E.L.T. 321 (Tri.- Del.). In this case the appellant had received the capital goods while availing SSI exemption without taking registration. Cenvat credit was taken on the capital goods for the years 2003-04 and 2004-05 but taken in the year 2005-06. This was allowed by the Tribunal. The Tribunal took a view that there is no provision in the rules that credit was not available to unregistered manufacturers. Manufacturers exempted from the registration do not cease to be a manufacturer of excisable goods. This case squarely covers the issue in this case also. Therefore, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 . We may also consider the provisions of Rule 6 of the Cenvat Credit Rules, 2004. The relevant portion of Rule 6(6)(v) reads as under :- (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)....... (ii) ..... (iii) ..... (iv) ..... (v) cleared for export under bond in terms of provisions of the Central Excise Rules, 2002. The petitioners had manufactured both dutiable and exempted final product (packaged software and printed books respectively). The petitioner has taken credit on input used in the manufacture of dutiable as well as exempted final products. If the exempted products are exported outside India the provisions of Rule 6(6)(v) of the Cenvat Credit Rules are applicable. Therefore, the bar provided under Rule 6(1) and the liability created under Rule 6(3)(b) of the Cenvat Credit Rules, 2004 are not attracted. By denying to the petitioner from exporting the printed books under bond what the respondents want to do is in fact to levy 10% on the sale price of the printed books in terms of Rule 6(3)(b) of the Cenvat Credit Rules, 2004. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for export under bond in terms of Central Excise Rules, 2002. Considering the language of Rule 6(6)(v) of the Cenvat Credit Rules, 2004 the petitioners are entitled to avail Cenvat credit in respect of the inputs used in the manufacture of the final products being exported irrespective of the fact that the final products are otherwise exempt. 8 . The Cenvat credit is allowed n (sic) the duty paid on inputs to mitigate the effect of double taxation of levying duty on inputs as also on the final product. If, however, the exempted final product is exported it calls for a special relaxation/dispensation to make the goods of the country internationally competitive. As an illustration suppose a final product like tractor is otherwise exempted from excise duty even for domestic consumption and such tractors are exported. The various inputs like engines, etc., used in the tractor may have suffered excise duty. The intention is not to export taxes but only to export the goods. If the inputs like engine going into the manufacture of export commodity namely tractors are subject to excise duty, the Indian manufacturer of tractors becomes internationally uncompetitive. This appears to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products are exempt from payment of duty. If a final product is not exempted from duty, Rule 6(1) is not attracted at all and hence Rule 6(6) is unnecessary. Rule 6(6) is precisely needed only when the final products are exempt from payment of duty. In this context the Revenue itself has accepted that under the provisions of Cenvat Credit Rules, 2002 there were provisions for removal of exempted goods under bond but the same was not available with effect from 9th September, 2004 under Cenvat Credit Rules, 2004. We may reproduce Rule 6(5) of the Cenvat Credit Rules, 2002 which reads as follows :- (5) The provisions of sub-rule (1), sub-rule (2), sub-rule (3) and sub-rule(4) shall not be applicable in case the exempted goods are either - (i) cleared to a unit in a free trade zone; or (ii) cleared to a unit in a special economic zone; or (iii) cleared to a hundred per cent export oriented undertaking; or (iv) cleared to a unit in an Electronic Hardware Technology Park or Software Technology Park; or (v) supplied to the United Nations or an international organization for their official use or supplied to projects funded by them, on which exemption of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both dutiable and exempted goods exported under bond, Rule 6(6) of Cenvat Credit Rules, 2004 uses the expression excisable goods . As an illustration, if a car which is dutiable is exported under bond without payment of duty there may be doubt as to whether credit on the inputs will be available, since the car is cleared without payment of duty under Rule 6(5) of Cenvat Credit Rules, 2002. It could be argued that it covers only the exempted goods exported and not dutiable goods exported. In order to cover such a situation also, Rule 6(6) of Cenvat Credit Rules, 2004 used the expression excisable goods which is wider to include both dutiable as well as exempted goods. 10 . In our opinion therefore, the petition will have to be allowed. The Petitioners are entitled to remove the goods on furnishing the bond as set out in Annexure 16 in Form B-1 of the Central Excise Manual. Rule made absolute accordingly. There shall be no order as to costs. Well Known Polyesters Ltd. Vs. Commissioner of C. Ex., Vapi - 2011 (267) ELT 221 (Tri. Ahmd) 6 . The second ground taken for rejection of the refund claim is that refund under Rule 5 of Cenvat Credit Rules, 2004 is permi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spute that the respondent is engaged in the manufacture of finished leather and that it had exported manufactured leather as claimed by it. The only question is whether under the CENVAT Credit Rules of 2002 or 2004, it is entitled to the credit/refund of CENVAT paid on inputs, like chemicals etc. purchased by it, to convert raw leather into finished leather. 9 . Rule 3 of the CENVAT Credit Rules, 2004, as also Rule 3 of CENVAT Credit Rules, 2002, which have been repealed by the Rules of 2004, provide for credit of CENVAT paid by a manufacture on any inputs or capital goods received in a factory for use in or in relation to the manufacture of final products. Rule 6(1) of the extant Rules as also the repealed Rules, says that CENVAT credit shall not be allowed on such quantity of inputs which is used in the manufacture of exempted goods. Sub-rule (5) of Rule 6 of the repealed Rules, 2002 and sub-rule (6) of Rule 6 of the extant Rules of 2004 are an exception to Rule 6(1). Sub-rule (5) (vi) of the repealed Rules, provided that sub-rules (1), (2), (3) and (4) shall not be applicable, in case of exempted goods, which are : (i) xxxxxx (ii) xxxxxx (iii) xxxxxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods. 14 . The Commissioner (Appeals), while accepting the appeal and reversing the order of Assistant Commissioner, held that Assistant Commissioner had not taken holistic view of the matter and allowed himself to be misled by reading only a few provisions. He held that the object of exception clause contained in Rule 6, as noticed hereinabove, was to promote the export of goods manufactured in India. He observed that in any case, exception clause of Rule 6 allowed the credit/refund of CENVAT paid on inputs in the manufacture of excisable products, exported under a bond. 15 . The Tribunal has upheld the order of the Commissioner (Appeals). 16 . The Scheme of CENVAT Credit Rules, 2002, as also 2004, reference to the relevant provisions of which has been made hereinabove, shows that CENVAT credit/refund is allowed on the inputs of all manufactured goods which are not exempt from duty, as is clear from a combined reading of Rule 3 and sub-rule (1) of Rule 6 of the CENVAT Credit Rules, 2002, as also the Rules of 2004, so as to avoid indirect double taxation on inputs. However, this rule is not absolute. It is subject to exception clause, contained in Rule 6(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. Union of India reported in 2009 (235) E.L.T. 614 (Bom.) is also relied, wherein it is held that expression excisable goods is wider than the expression exempted goods as it includes both dutiable and also exempted goods. 9. It is also submitted by the learned counsel Mr. Ladda that the judgment of the Himachal Pradesh High Court in case of Commissioner of Central Excise v. Drish Shoes Ltd. (supra) is confirmed by the Apex Court in Appeal No. 2887/2012. The learned counsel submits that the judgment in the case of Commissioner of Central Excise v. Drish Shoes Ltd. (supra) may not assist the assesee as the said judgment does not consider execution of bond for export of exempted goods. 10. Considering the fact that judgment in the case of Commissioner of Central Excise v. Drish Shoes Ltd. (supra) is confirmed by the Apex Court involving similar issue, no substantial question of law arises in the present appeals. As such the appeals are dismissed. No costs. Noble Grain India Pvt. Ltd. Vs. Commissioner of Central Excise - 2010 (17) STR (128) 4 . After hearing both sides and on perusal of the records, I find that the appellants exported De-oiled Cake ..... X X X X Extracts X X X X X X X X Extracts X X X X
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