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TMI Blog2024 (5) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... in the export of goods during the period January to March, 2009. The said refund application was examined by the jurisdictional Assistant Commissioner being the original authority and in exercise of the powers vested with him under Section 11B of the Central Excise Act, 1944, he had sanctioned refund of Rs.4,22,558/- out of the total refund claim filed for Rs.13,37,072/- by passing an Order-in-Original dated 19.03.2010. The gist of the findings by the said Original authority is extracted and given below: "14. I find that the cenvat credit availed in respect of input, as verified and certified by Range Superintendent, Range - III, Kalyan IV Division, vide verification report dated 10.03.2010, on verification of the records maintained by the claimant for the quarter January, 2009 to March, 2009, is as under:- (A) Input Credit: Cenvat Credit availed during the quarter January, 2009 to March, 2009: Rs.23,32,780/- Less Credit utilized during the quarter January, 2009 to March, 2009: Rs.19,87,976/- Total Cenvat Credit in balance at the end of 31st March, 2009: Rs.3,44,804/- (B) Input Service Credit: Cenvat Credit availed during the quarter January, 2009 to Marc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provision of Rule 5 and Notification issued thereunder, there is no restriction that entire export should be made under a particular scheme either under Rule 5 of drawback or rebate. Therefore, the part of the consignment can be cleared under rebate, drawback or claim of refund under UT-1, therefore when the goods have been exported under UT-1 irrespective of the fact that other consignment were cleared under rebate or drawback, refund under Rule 5 in respect of goods cleared under UT-1 cannot be denied. I find that the adjudicating authority had not correctly quantified the amount of refund on the input used in the goods exported under UT-1. Therefore the matter needs to be remanded to the adjudicating authority for correct quantification of the refund amount. I, therefore, set aside the impugned order and remand the matter to the original adjudicating authority..." 2.3 In accordance with the remand order of the Tribunal, the Deputy Commissioner, Central Excise, Kalyan-IV Division, adjudicated the case vide Order-in-Original dated 07.06.2017 by ordering sanction of refund ofRs.77,754/-under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No.5/2006-C.E. (N.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Rules, 2002 and the CENVAT Credit Rules. The assessee are claiming refund of the accumulated credit in respect of utilized inputs in relation to the goods exported and it is for them to establish the nexus and to provide the relevant data so as to arrive at quantification of refund. In the absence of the relevant information, I hold that the assessee is not eligible for any refund of accumulated credit in respect of utilized inputs in relation to the goods exported. 10. The assessee was requested to furnish the requisite documents initially vide letter dated 20.10.2016 and subsequently their request for some more time for submitting the documents during the course of personal hearing on 01.12.2016 was also acceded to. However, despite continuous persuasion by the jurisdictional Range Superintendent in writing and orally on telephone the assessee has not submitted any proper reasoning with documentary evidence in respect of the conditions laid down under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification no. 05/2006-C.E. (N.T.) dated 14.03.2006 for quantification of credit on inputs utilized in the export of goods under UT-1 procedure." 2.4 The appellant being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of goods or services as provided under Rule 5 of CENVAT Credit Rules, 2004 read that Notification No. 5/2006-C.E. (N.T) dated 14.03.2006, which is refundable to the appellant. The period of dispute in the present case is January, 2009 to March, 2009. The relevant legal provisions of the said Rules and notification are extracted and provided as follows: "Refund of CENVAT Credit. 5. (1) A manufacturer who clears a final product or an intermediate product for export without payment of duty under bond or letter of undertaking, or a service provider who provides an output service which is exported without payment of service tax, shall be allowed refund of CENVAT credit as determined by the following formula subject to procedure, safeguards, conditions and limitations, as may be specified by the Board by notification in the Official Gazette: Refund amount = (Export turnover of goods+ Export turnover of services) Total turnover x Net CENVAT credit Where,- (A) "Refund amount" means the maximum refund that is admissible; (B) "Net CENVAT credit" means total CENVAT credit availed on inputs and input services by the manufacturer or the output service provider reduced by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value for the purposes of sub-rules (3) and (3A) of rule 6 is determined.] 5/2006-C.E. (N.T.) Refund of Cenvat credit - Procedure In exercise of the powers conferred by rule 5 of the CENVAT Credit Rules, 2004 (hereinafter referred to as the 'said rules'), and in supercession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 11/2002-Central Excise (N.T.), dated 1st March, 2002, published in the Gazette of India Extraordinary, vide number G.S.R. 150(E), dated 1st March, 2002, the Central Government hereby directs that refund of CENVAT credit shall be allowed in respect of : (a) input or input service used in the manufacture of final product which is cleared for export under bond or letter of undertaking; (b) input or input service used in providing output service which has been exported without payment of service tax, subject to safeguards, conditions and limitations, set out in the Appendix to this notification. Appendix 1. The final product or the output service is exported in accordance with the procedure laid down in the Central Excise Rules, 2002, or the Export of Services Rules, 2005, as the case may be. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. "Total turnover" means the sum total of the value of, - (a) all output services and exempted services provided, including value of services exported; (b) all excisable and non excisable goods cleared, including the value of goods exported; (c) The value of bought out goods sold, during the given period. 6. The application in Form A, along with the prescribed enclosures and the relevant extracts of the records maintained under the Central Excise Rules, 2002, CENVAT Credit Rules, 2004, or the Service Tax Rules, 1994, in original, are filed with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, before the expiry of the period specified in section 11B of the Central Excise Act, 1944 (1 of 1944). 7. The refund of excise duty or service tax is allowed by the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be. Annexure FORM 'A' (See paragraph 3 of the Appendix) Application for refund of CENVAT credit under rule 5 of the CENVAT Credit Rules, 2004 (Refund relating to the given period i.e. quarter or month ________) To The Deputy Commissioner/Assist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under the Central Excise Rules, 2002, the CENVAT Credit Rules, 2004, or the Service Tax Rules, 1994, as the case may be, evidencing taking of CENVAT credit, utilization of such credit in payment of excise duty or service tax and the balance unutilized credit during the given period. (E) AMOUNT OF REFUND CLAIMED :- Rs. (in figures and in words)_____________________________ I/we opt for/do not opt for the facility of the refund amount being credited directly in my/our bank account details as furnished below (1) Account Number (2) Name of the Bank (3) Branch (with address) I/We certify that the aforesaid particulars are correct and I/we am/are the rightful claimant(s) to the refund of excise duty or service tax, as the case may be, due thereon which may be allowed in my/our favour. I/We declare that no separate claim for rebate of duties or service tax in respect of excisable materials used in the manufacture of the goods or output service covered by this application has been or will be made under the Customs and the Central Excise Duties Drawback Rules, 1971 or under claim for rebate under the Central Excise Rules, 2002 or the Export of Services Rules, 2005. I/We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions and limitations, as provided by Notification No.5/2006-C.E. (N.T) dated 14.03.2006 (a) Claim for refund of Cenvat credit shall be submitted in prescribed form 'A' for any quarter, only once; (b) Average export clearances in the previous quarter shall be 50% of more of the total clearances of final products or output services; (c) Details of exports shall be provided along with copies of shipping bills duly certified by Customs officer and copies of invoices indicating realization of export proceeds duly certified by the bank. (iv) Cenvat credit refund shall be allowed where the manufacturer or service provider is unable to utilize such credit for payment of any duty or tax; (v) Amount of refund of unutilized input service shall be restricted to the ratio of export turnover to the total turnover as prescribed by a formula. Once the above specified conditions are satisfied then the refund of Cenvat credit on inputs and input services shall be separately calculated as per prescribed formula. 8.1 I find that on the basis of factual matrix, the merits of the present case need to be examined to see whether it would fulfill all the conditions to enable become eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for refund as specified in the said notification and the same have been verified by the concerned Range Superintendent and recommended for its favourable consideration." 8.4 Further, in respect of condition at 7(iv), it is found that the original authority vide Order-in-Original dated 19.03.2010 had considered the eligible Cenvat credit of inputs and input services in the present case, and had deducted the amount of Cenvat credit of inputs utilized before arriving at the amount of eligible refund of Cenvat credit that could be considered as credit that is unable to be utilized for payment of any tax or duty. As there was no utilization of input services credit by the appellant, no deduction on this account was shown in such calculation in aforesaid Order dated 19.03.2010. 8.5 As regards, the condition at 7(v), it is found that the refund of unutilized input services credit has been restricted to the extent of ratio of export turnover to the total turnover by applying the prescribed formula. The extract of such examination and calculation in the Order-in-Original dated 19.03.2010, is extracted and given below: "7. As per the provisions of Rule 5 of the Cenvat Credit Rules, 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,503 X 2,93,37,153 =------------------------------------------------------------------------------------- 5,64,08,820 =77,753.66 rounded off to Rs. 77,754/-" 9. In view of the detailed examination of the all five conditions of Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 5/2006-C.E. (N.T) dated 14.03.2006, in the context of factual matrix of the case, I find that the appellant is eligible for refund of Cenvat credit of inputs availed during the quarter January, 2009 to March, 2009 after adjusting/deducting for the Cenvat credit utilized, thereby arriving at the correct amount of Cenvat credit on inputs which could not be utilized for payment of tax or duty as Rs.3,44,804/- (Rs.23,32,780/- minus Rs.49,87,976/-). Further, the amount of Cenvat credit of input services which could not be utilized and by restricting the same to the extent of ratio of export turnover to the total turnover as per the prescribed formula, the eligible Cenvat credit for refund is arrived at Rs.77,754/-. Thus, the total eligible amount of Cenvat credit refundable to the appellants is worked out as Rs.4,22,558/-, out of the total refund claim filed for an amount of Rs.13,37,072/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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